The Disadvantages of Quotas

Written by james stuart
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The Disadvantages of Quotas
Quotas are often used in manufacturing. (Photos.com/Photos.com/Getty Images)

Quotas require companies, organisations and individuals to achieve a quantitative goal by a specified time. This can mean producing a set number of products, hiring a number of people from a specific demographic or supplying a number of products by a deadline. The disadvantages of quotas are numerous, but are often specific to the field to which the quotas apply.

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Production

Although quotas often help keep companies profitable, they also have a number of negative effects on production. When companies set quotas, they often result in poor product quality as employees struggle to produce as many products as possible in a short time. If quotas are set by the government, they often limit the number of products a company can produce. This can result in a smaller supply, which can raise prices for consumers.

Import

Governments often set import quotas in an effort to encourage domestic production. Although this often boosts local economies, it can also have a negative impact. Companies will sometimes seek to circumvent quotas by bribing officials. This results in widespread corruption in which avaricious companies profit, and smaller companies cannot compete. Quotas can also create a black market for products, as consumers turn to illegal methods of obtaining the goods they desire.

Hiring

Quotas are often set when hiring employees to a new company. Many people argue that companies and organisations should hire a set number of people from different population demographics. For example, there should be roughly equal number of men and women. Others argue that this policy privileges people who do not deserve the job. Companies may overlook candidates if they do not fit into one of the demographic quotas. If this occurs, the overall output of a company will be poorer.

Aid

When aid organisations set quotas for the number of people they must help, they might overlook the quality of the help. These organisations seek to help as many people as possible and often set quotas for the number of people they help. However, if an organisation seeks to provide shelter to as many people as possible, the quality of these shelters may not be up to standard. Often, the only way to combat this problem is to spend more money and raise the quotas.

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