1.1.5 specialisation And Division Of Labour Flashcards
What is specialisation?
Specialisation is the production of a limited range of goods by a company/individual/country which means that trade is essential as it is the only way they are able to access all that they need.
What is division of labour?
Division of labour is when labour becomes specialised in a particular part of the production process. Occurs when workers specialise on very specific tasks.
Advantages of specialisation and the division of labour in organising production:
1) Each worker specialises in tasks for which that worker is best suited.
2)The worker only has to be trained in one task. Therefore, training costs for the firm are likely to be lower.
3) Less time is wasted because a worker no longer has to move from one task to another.
4) In manufacturing, such as approach enables production line methods to be employed and allows an increased use of machinery. In turn, this helps to increase productivity and to reduce average costs of production.
Disadvantages of specialisation and the division of labour in organising production:
1) Monotony and boredom for workers, this could result in a decrease in productivity.
2) Loss of skills, workers trained in one particular task have only limited skills. This could be a problem if they are made redundant.
3) A strike by one group of workers could bring the entire production facility to a standstill.
4) There is a lack of variety because all goods produced on a production line are identical.
Advantages of specialising in the production of goods and services to trade:
If a country specialises in the production of certain goods and services and then trades these in exchange for goods and services that it does not produce, then it can benefit from increased output, greater choice and lower prices.
Disadvantages of specialising in the production of goods and services to trade:
Such specialisation might mean that a country becomes over-dependent on imported goods and services. If its goods and services are uncompetitive then unemployment could result, and the country’s value of imports may persistently exceed the value of its exports.
What are the limits to the division of labour?
1) The size of the market-
If there is only a small market then it is more difficult to specialise.
2) The type of product-
For example designer fashion products are likely to be unique and not suitable for the division of labour.
3) Transport costs-
If there are high then large-scale production and the division of labour may not be possible.
What are the 4 functions of money?
1) Means of exchange:
- Facilitates trade - avoids the ‘double coincidence of wants’ caused by barter.
2) Measure of value:
- Prices of goods and services makes it possible to compare their value.
3) Store of value:
- Can be stored (saved) and used at some point in the future.
4) Method of deferred payment
- Allows credit and debt and a system for the repayment of debt.
Why is a means of exchange (money) necessary for the full benefits of specialisation?
Specialisation increases efficiency and productivity by allowing individuals and businesses to focus on specific tasks.
Means of exchange simplifies transactions eliminating the challenges of bartering, providing a standard measure of value for comparing goods and services .
