Division of Labor (Advantages, Disadvantages, and Examples)

The division of labor refers to the segmentation of tasks, with each person focusing on a specific part of the production process. Originally coined in 1776 ... SkiptocontentHomeMicroeconomicsOpportunityCostandtheDivisionofLaborDivisionofLaborDefinitionWhatisDivisionofLaborAdvantagesofDivisionofLaborDisadvantagesofDivisionofLaborDivisionofLaborExamplesDivisionofLaborDefinitionWRITTENBYPAULBOYCE|Updated16October2021WhatisDivisionofLaborThedivisionoflaborreferstothesegmentationoftasks,witheachpersonfocusingonaspecificpartoftheproductionprocess.Originallycoinedin1776byAdamSmithinhisbook‘AWealthofNations’,hefamouslyusedapinfactoryasanexample.Init,henotedhowthereweremanycomplexstagestotheprocess. Firstofall,someonehastodrawthewireout,thenstraightenit,andthencutit.Theythenneedtopointit,andthengrindthetopofthehead.Inwhatisarelativelycomplexsetoftasks,Smithhighlightedthebenefitsofspecialisation.Thisideastemsfromthefactthateachpersonneedstoinvestasetamountoftimetobecomehighlyproficientintheirrole.KeyPointsThedivisionoflaboristheprocessbywhicheachpartofproductionissplitdownintosectorsbywhichanemployeeundertakesaspecifictask.Throughthedivisionoflabor,productionhasbecomemoreefficientandwehaveseensignificanteconomicandmonetarygains.Duringarecession,peoplelosetheirjobs,businessesgobust,stockmarketstumble,andexchangeratestendtodecline.IttakesustimetolearnthenewversionofWindows,anewlanguage,orwhenwewereyounger:toread,write,andtieourshoelaces.Soforeachpartofthepin-makingprocess,ittakestimetomaster.Ifeachworkerfocusedonasingletaskandmasteredit,thentheproductionprocesswouldbemoreefficient.Forinstance,apinmanufacturerhas5separatetaskstomaster,whichmakesthemasteryprocessthatmuchmoretime-consuming.Thatisbeforeweconsiderthedifficultiesintryingtomaster5tasksatthesametime.Byfocusingononetask,eachindividualisabletomasteritmuchquicker.Inturn,bydividingthelabor,itbecomeseasiertofillgapsinemployment.Soifthefirmisshortofastaffmember,itiseasyenoughtotrainthemupastheydon’tneedtobetaught5differenttasks.AdvantagesofDivisionofLaborThedivisionoflaborhasspreadacrossthedevelopedworld.Wecanseethisinmostconsumerproductstoday.Forinstance,theiPhonerequirespartssuchasitscase,battery,screen,andlogicboard.NotallofthesearemanufacturedbyApple,letalonethesameperson.Thefirmrequiresseparatecompanieswithgreaterspecialties.AmongthoseincludefirmsinJapantomanufacturethecamera,Germanfirmstoproducetheaccelerometer,theUSforitsaudiochip,andChinaforthebatteryandtoassembleit.Therearemanyadvantagestothedivisionoflabor,whichiswhyishasbecomecommonplace.Soletuslookatthembelow:1.EfficientMasteryWithoutthedivisionoflabor,masteryofaskilltakesmuchlonger.Thisisbecauseaworkersattentionisspreadacrossmanyareas.Forinstance,itwouldbedifficulttomasteralanguageifyouarealsotryingtolearnthepiano,engineering,CSS,andeconomics.So,thedivisionoflaborallowstheworkertofocusandmasteraspecificpartoftheprocess,whichhelpsthemlearnitfaster.Whenafirmemploysanewworker,itisfarquickertotrainthemiftheycanfocusonaspecifictask.Forinstance,anemployeeatacarmanufacturingplantwillbemoreefficientiftheyfocusedonfittingthewheelson,ratherthanthedoors,thesteeringwheel,etc. 2.QuickerTrainingSomeindustrieshaveahigherturnoverratethanothers.Thedivisionoflaborallowsnewemployeestocomeinandeasilyreplacelostworkers.Insteadoftaking12monthstobecomeefficientinarole,itmaytake3months. Thisreducestheimpactoflosingaworker.Forinstance,aworkerthathaslearnthowtomakeapinfromstarttofinishalsotakesawaytheirskillsandexpertise.Toreplacethatworkerwillrequiremonths,ifnotyearsoftrainingandexperience.Bycontrast,ifaworkerwhomakestheheadofthepinleaves,anincomingemployeehasfarlesstolearnandmaster.Toputitanotherway;itismoreefficienttoreplaceapieceofthepuzzle,thantheentirepuzzle.3.ProductivityWhenworkersfocussolelyonaspecifictask,theycanmasteritquickerandmoreefficiently.Inturn,workersbecomemoreproductive.Byallowingworkerspurefocusononetask,theirattentionsarenotdiverted.IfwegobacktoSmith’spinfactoryexample;thedivisionoflaborincreasedproductivityfromonepinperworkerperday,toover4,800pinsperworkerperday(whendividingtotaloutputbynumberofworkers).Thereasonproductivityincreasesispartiallyduetoagreaterlevelofmastery.However,itisalsoaby-productofseveralotheradvantages.Forinstance,itallowsworkerstoflowtoareaswheretheyarebestsuited.Someemployeesmaybebettersuitedtodealingandmanipulatingdata,whilstothersarebetteratmanagingpeopleandprojects.4.EfficientAllocationofWorkersWhenwesayallocationofworkers,werefertotheirrolewithintheproductionprocess.Forinstance,whatmayjustbeaonestageprocesscouldbecomeafive-stageone.Thiscreatesfiveseparateanduniqueroles,eachwithadifferenttask.Ifwelooktolargecorporations,theyhavedepartmentsforfinance,IT,humanresources,andmarketing,amongothers.Thedivisionoflaborallowsemployeestospecialise.ThisisefficientbecausethosewhoarewellsuitedtoanITrolewillnotbesowellsuitedtoahumanresourcesrole.Therearespecificskillsthatarenotnecessarilywelltransferredtospecifictasks.Soratherthanbeajackofalltradesandmasteronnone;divisionoflaborallowstheemployeetobeamaster.5.CheaperProductsAsdivisionoflaborincreasesproductivity,italsomeansthatit’scheapertoproduceagood.Inturn,thistranslatestocheaperproducts.Iflaborisdividedbetweenfivepeoplewhospecialiseintheirtask,itbecomesquickerandmoreefficient.Inturn,thenumberofgoodsproducedincreases.Forinstance,itisfarmoredifficultforaserveratMcDonaldstoservecustomers,cooktheburgers,andfrythefries,thanpurelyservethecustomer.Sowhentheserverfocusesonthecustomer,itleadstobettercustomerservice,andamoreefficientprocess.6.HigherWagesItmustbesaidthatnotalltheproductivitygainsarenecessarilypassedontotheconsumer.Aproportionmaygotoprofits,whilstsomemaygotohigherpayforemployees.Employeesmayoftenconsiderthisasanoptiontoreducethenegativeimpacts.Forinstance,someworkersmaybecomedemotivatedandboredbysomerepetitiveaspectsofthejob.Highersalariescanhelptoreducetheeffect,althoughmaynoteliminateitcompletely.ThisiswhatHenryForddidwhenhecreatedtheFordassemblylineintheearly20thCentury.Althoughworkersweresetspecificandrepetitivejobs,theywerepaidhigherthantheindustryaverage.Whathappenedwas,theturnoverratedeclined,andworkersbecamehappier.7.InnovationWhenworkersaresetspecifictasks,thatistheirpurefocus.Soitbecomeseasiertoseepitfallsintheexistingprocess.Doingthesametaskeachdaymakesiteasiertoanalyseareasforimprovement.Ittakesupmoreofthebrainsprocessingpower,soitisattheforefrontofaworkersmind.DisadvantagesofDivisionofLaborThedivisionoflaborlargelybringsanumberofsignificantadvantages.However,thereareseveraldisadvantagesthatneedtobeconsidered.Althoughtheadvantagesarestilloverwhelming,itisstillimportanttoidentifythedisadvantagesandhowtomitigatethem.1.BoredomfromRepetitionSpecialisingonaspecifictaskcanincreaseproductivity,butitcanintroducealevelofmonotonyandboredom.Doingthesamethingrepeatedlywithoutanychallengeisnotconductivetothehumancondition.Wenaturallycraveadvancementandmeaning.Certainjobsaremoremonotonousthanothers.Thinkofstandinginthemiddleofafactory,repetitivelyputtinggoodsinabox.Somemayenjoysuchtasks,whilstothersbecomedisengaged.However,onthewhole,productivitymaydeclineandturnoverratesincrease.Yetcomparedtothepre-divisionoflabor,theproductivityratesarestillatadvancedlevels.Oneofthewaysbywhichemployerscounter-actboredomiseitherthroughperformancebasedbonuses,higherpay,orperformancechecks.Thesuccessofwhichdependsonhowandwheretheyareimplemented.2.InterdependenceWhentasksaresplitdownbetweendifferentdepartments/employees,alevelofinterdependenceiscreated.Forinstance,thecreationofasimplepencilissplitdownintoseveralparts.Someonemustminethegranite,anothertocutthewood,anothertoproducetherubber,andanothertoputitalltogether.Nobodyintheprocesstrulyunderstandshowthepencilismade,butallareinvolvedinitscreation.Atthesametime,thefinalproductionisreliantonthetimelydeliveryofmaterials.Shouldonepartoftheprocessbedelayed,eitherbyastrikeornaturaldisaster,thewholechaincanfallapart.3.LackofResponsibilityWheneachpersonisonlyasmallpartofabiggerchain,itcanbecomedifficulttoassignresponsibility.Ifataskfails,itcanbetime-consumingtofindoutwherethingswentwrong.Atthesametime,italsobecomeseasierforcertainindividualstoslack.WhenonepersonproducesXoutput,itiseasilymeasurable.However,whentheyarepartofabiggerprocess,itisdifficulttomeasurethefinaloutput.Asaresult,someemployeesmaynottakesomuchresponsibilityforthefailureoftasks.DivisionofLaborExamplesAssemblyLinePerhapsoneofthemostfamousexamplesofthedivisionoflaborwasthecreationfotheassemblylinebyHenryFordin1913.TheFordModelTwaspreviouslymanufacturedwithpartsoverthefloorwithanemployeeputtingittogether.LikebuildingaflatpackfromIkea!WhatForddidwasdividetheprocessupinto84distinctsteps,traininganemployeeinonespecifictask.Sooneemployeewouldputtheboltsonthewheel,anotherthesteeringwheel,anotherthegearstick,soonandsoforth.Asaresult,theproducttimeofaFordModelTdecreasedfrom12hourstojust90minutes. FordModelTdecreasedfrom12hourstojust90minutes.Inturn,suchefficienciesallowedFordtoreducepricesfrom$850tolessthan$300.In2019prices,thatwouldbeareductionfrom$21,000to$9,000.BigBusinessBigbusinessestendtohaveseveraldifferentdepartmentsthatspecialiseinaspecificarea.Forinstance,therearefinancedepartments,marketingdepartments,HRdepartmentsetc.Withoutthedivisionoflabor,businesseswouldbeunabletoachievethescalabilitytheydotoday.JustimaginetheWalmartCEOstackingshelves,servingcustomersaswellasmakinginvestmentdecisions.HouseBuildingWhenhousesarebuilt,someoneneedstodotheplumbing,plastering,fitting,andelectricalwork.Sowhenanewhouseisbuilt,suchspecialistsfocusonthosespecifictasks.GeneralFAQsonDivisonofLaborWhatareexamplesofdivisionoflabor?Someexamplesofdivisionoflaborcanbefoundeverywhere.Hereareafewexamples1)Theassemblyline–theproductgetstransferreddownanautomatedlinewherepeopleaddcomponentstoassistwithmakingthefinalproduct.2)Apple–ithasadifferentmanufacturerforalmostallofitsdifferentparts,fromtheIDsensortothecamera.3)HouseBuilding–aseparateworkerisrequiredfortheplumbing,landscaping,construction,electricwork,andplastering.Whatistheconceptofdivisionoflabor?Thedivisionoflaborreferstothesegmentationoftasks,soeachpersonfocusesonaspecificpartoftheproductionprocess.Whoinventedthedivisionoflabor?ThetermdivisionoflaborwasoriginallycoinedbyAdamSmithinhis1776publication‘AWealthofNations’.FurtherReadingFiscalPolicyDefinition-Fiscalpolicyreferstogovernmentsspendingandtaxation.Sohowmuchincomeithascominginthroughtaxes,andhow……FiscalPolicyDefinitionReadMore»MixedEconomyDefinition-Amixedeconomyisaneconomicsystemthatcombineselementsofacapitalist,market-basedsystem,withasocialist,commandeconomy……MixedEconomyDefinitionReadMore»StructuralUnemploymentDefinition-Structuralunemploymentiswherethereisunemploymentduetoachangeinthedemandforspecificskillsandjobs.For……StructuralUnemploymentDefinitionReadMore»Postnavigation←PreviousPostNextPost→x