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Tuesday, September 7, 2010

Does the law of diminishing returns apply to relationship?

This economic law states that we will get less and less extra output when we add additional doses of an input while holding other inputs fixed.

The answer to this question really depends on the environment that exists. Nothing exists in an environment that doesn't support it. A high-trust environment supports relationships and, therefore, employer-employee relationships do not have diminishing returns in a high-trust environment. Conversely, low-trust environments will have diminishing returns with any relationship.

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