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The following article was written by Coleman Patterson and appeared in the Business section of the Abilene Reporter-News.

A lesson in diminishing marginal productivity, February 3, 2006, 2D.

If you are a fan of Bugs Bunny, you might remember the “Baseball Bugs” cartoon where Bugs Bunny heckled the Gashouse Gorillas from his rabbit hole in the outfield of a baseball stadium.  After bragging that he could beat the Gorillas all by himself, he was yanked from his hole and made to live up to his words.  Bugs played every position—he pitched, caught, and fielded balls by himself.  He eventually beat the team of behemoths on a glove-tossing catch from the flagpole of the Empire State Building. 

The notion of the episode was absurd (and not because it involved a rabbit playing baseball) because it would be impossible for an individual to defeat a team in a team sport.  A team with fewer than nine players is disadvantaged because positions are left vacant—and that weakness can be exploited.  Would a team with nine players be at a disadvantage to a team with more than nine players?  Probably so.

Ten, eleven, or twelve players would probably provide considerable extra field coverage for a team.  However, fielding 100, 500, or 1,000 defensive players would probably complicate things so much that the extra costs required to recruit, train, compensate, and manage the players would not be worth the benefits that they would add to the team. 

It is natural to imagine that a bigger group of people can accomplish more than a smaller group.   If you have ever moved a piano, you probably appreciated having others aid in the effort.  The more people who add their strength to such a task decreases the average load that each individual has to carry.  However, after a certain point, adding more people to the task actually becomes a hindrance to the performance of the group.  People begin to get in the way of each other and to make the collective work of the group more difficult to coordinate.

Each additional person added to a task will reduce the burden of the workers in the group, but the benefit gained from each new worker will be less than from the previous worker.  For example, a third piano lifter will reduce the burden of each lifter from 50% to 33% of the weight of the piano (a 17% reduction).  Adding a fourth lifter will reduce the burden from 33% down to 25% (a 8% reduction).  Economists refer to this concept as “diminishing marginal productivity.” 

After a certain point, the added benefit of another person will not be worth the cost of adding another person.  Nine eager piano lifters may choose go on and move the piano themselves rather than wasting time waiting on a tenth, extremely late helper.  The point to stop bringing on new workers is when the cost of a new worker exceeds the added benefit of the worker.

Just as with baseball and piano moving, some work in organizations requires collective action.   It is important for managers to identify the optimal sizes of their work groups.  Too big, and the organization will waste human and organizational resources, too small, and the organization will lose out on performance—unless they have a secret rabbit they can call in from the outfield.

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2006, 2007, 2008  Coleman Patterson, All Rights Reserved