Analyse the advantages for firms of using division of labour

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What’s it: Division of labor means dividing the work required to produce a product into different and interdependent tasks. The company breaks down a complex production system into several units. They then assign tasks and workers to each unit. Each worker has a unique and routine job but is interrelated with other units.

The division of labor allows the system to be more productive. Workers are getting more proficient and doing tasks faster. Finally, companies can increase output at a significant scale.

We have to make choices in using our limited resources to meet unlimited consumer needs. Therefore, we must use these resources in the most efficient way possible.

Production is said to be efficient if we can produce more output with the same input. In other words, we have to be more productive. One way to increase productivity is by specialization, dividing the workforce according to skills and tasks.

Specialization requires companies to divide business operations into specific tasks. In the car manufacturing business, for example, it involves dividing the production system into multiple stations along an assembly line. At each station, workers have specific tasks. Moreover, they do the same work regularly.

Meanwhile, in the service business, specialization requires companies to divide business operations into several functional areas, such as marketing, finance, human resources, and operations (service provision). Each requires workers with skills and performing different functional tasks.

As each worker performs a specific task, they will become more and more skilled at it over time. And specialization ultimately leads to higher output per worker.

History of the division of labor

Technical advances in production have resulted in goods and services on a large scale. Highly complex production systems are broken down into a series of tasks, and each worker specializes in each one.

In fact, we have divided labor since our time as hunters and gatherers. At that time, tasks were divided by age and gender.

Later, the division of labor became an important part of society after the Agricultural Revolution. At that time, we experienced a food surplus for the first time. When they don’t spend all their time getting food, they can specialize and perform other tasks.

But this concept became popular during the Industrial Revolution. The manufacturer breaks down the production system into specific work units on the assembly line. They assigned different workers to each station. And each station has a specific task. When finished from one station, the product moves to the next station. The process continues until the final output is completed.

This concept emerged after Adam Smith wrote in the late 18th century about why dividing up work in factories was important. He suggests manufacturers divide the production process in a factory into different tasks for higher benefits. Each person performs a specific task. Due to the focus on one area, their productivity can increase. And as a result, the output will also increase.

For example, in a garment factory, each operating division produces one piece of clothing, such as sleeves and buttonholes. Therefore, it makes production faster and cheaper than if one person finished each garment individually.

In addition, workers also become more specialized. As a result, they are faster at doing tasks and do better because they have learned from past mistakes. Thus, specialization leads to increased productivity and quality of finished products.

Advantages and disadvantages of division of labor

Here are the advantages of division of labor:

• Improve the experience and knowledge of workers more quickly because they only focus on one or a few tasks.
• Requires less training as workers only need to master a few skills to become proficient at performing the task.
• Fewer mistakes with faster learning from experience because you don’t have to learn many aspects.
• More optimal time because workers do not need to move to another place or station to do other tasks
• Reduced work overlap because the business has divided the production process into different specific tasks.
• Faster to achieve economies of scale by increasing the existing workers’ productivity.

Although it allows businesses to increase productivity, the application of division of labor has also been criticized. Its extreme application can harm the workers’ intellectual and emotional development. They can become bored with the monotonous nature of work. Other disadvantages of division of labor are:

• Decreased productivity because workers are bored and lack enthusiasm.
• Inflexible because workers can only do one job and cannot do other jobs, for example, to reduce their boredom.
• Structural unemployment because workers cannot switch to another job when their company goes bankrupt or closes.
• Production system failure due to machine breakdown at one stage affects all successive stages.
• Stopped operations if one worker is absent and no one replaces.

Then, some solutions are useful to overcome the above weaknesses. An example is by varying the task. It tends to increase overall efficiency by allowing workers to learn other skills.

Then, wider experience on different tasks also makes for more flexibility. For example, workers can replace each other during absences due to vacation, illness, or emergencies.

In addition, workers can also add skills, making it easier to get a new job if they lose their current job. Thus, it reduces the potential for structural unemployment when the company goes bankrupt or closes.