Labor/Political Factors for International Firms in Developing Regions

Abstract

Productivity, in both developed and developing regions, may be considered one of the most important aspects of cost‐control operations. However, the duration of contracts managed by international firms in developing countries often drastically exceeds the estimate. This is because the organizations fail to recognize the low labor production in these regions. The aim of this paper is to investigate and compare with the United States the labor production of 31 activities in two different developing countries, Ghana and Nepal. The findings show that the production factors and man‐hours per unit, are significantly lower in Ghana indicating that the use of equipment in Ghana is generally more prevalent than in Nepal. Nevertheless, both countries have factors higher than the United States. Overall, the results could be utilized by international designers and constructors to estimate their labor requirements. The effects of labor unions and of governmental instability, which may be especially important in developing regions, are also discussed. In addition, the cost of materials and equipment is taken into consideration.