Specialisation + Division of Labour Flashcards
What is Specialisation?
A firm, country or region becomes an expert at a specific job or field
What do you gain from specialisation?
Higher Output = Total production of goods and services is raised and quality can be improved.
Variety = Consumers have access to a greater variety of higher quality products.
Lower Prices = Increased competition acts as an incentive to minimise costs and keep prices down.
What is the division of Labour?
Just as an economy can benefit from specialisation, a firm can benefit from allowing its workers to specialise
in one or just a few parts of the business process. As such, a firm may separate its workforce so that many
separate tasks are undertaken by specific individuals.
What are the advantages of the division of labour?
An individual worker becomes more competent at a task that they repeat many times. Their output
should therefore increase.
This increase in productivity per worker reduces the overall production cost per unit.
The employer is more able to afford specific training for individuals as their output will increase and justify
that investment.
Workers can repeatedly use a single tool, making it more cost effective for a firm to purchase that tool.
This may reduce the cost of production or increase productivity for that worker
What are the Disadvantages of the division of labour?
When an individual repeats tasks many times, they may start to become bored with the job they are
doing.
This may lead to lower levels of morale which, in turn can lead to lower levels of output and quality
of production.
If a job becomes more boring, an individual is more likely to look for another job. This can lead to high
levels of staff turnover (the rate at which employees leave a workplace).
An increase in mass-produced standardised goods may reduce choice for consumers.
