Specilisation And The Division Of Labour Flashcards
What is the meaning of division of labour?
When workers specialise on very specific tasks.
What is Adam Smith’s take on the division of labour?
-In The ‘Wealth of Nations’-economic growth could be achieved by increasing the division of labour.
-involved breaking down a task into many small jobs with workers specialising on a particular task without the need to change jobs during the day.
-E.g. pin making-one person doing all the tasks -only one pin a day
-However, if each of the skills that go into pin making were divided-18 different operations with 18 different operators -12 pounds of pins per day.
-save time and enable each worker to become an expert in one specific task so increasing their productivity.
What are the advantages of specialisation a the division of labour in organising production?
-each worker specialises in tasks for which that worker is best suited
-the worker only has to be trained in one task-training costs for the firm are likely to be lower
-less time is waste because a worker no longer has to move from one task to another
—in manufacturing such an approach enables production line methods to be employed and allows an increased use of machinery. In turn, increases productivity and reduces costs of production
What are the disadvantages of specialisation and the division of labour in organising production.
-monotony and boredom for workers - could decrease productivity
-loss of skills-workers trained in one particular task have only limited skills-problem if they are made redundant
-strike by one group of workers could bring the entire production facility to a standstill
-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
A country becomes over-dependent on imported goods and services. If its goods and services are uncompetitive then unemployed 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?
+ The size of the market: if there is only a small market then it is more
difficult to specialise.
+ The type of product: for example, designer fashion products are likely to be
unique and not suitable for the division of labour.
+ Transport costs: if these are high then large-scale production and the
division of labour may not be possible.
What various functions does money help to facilitate specialisation and the division of labour?
-As a medium of exchange enabling people to specialise, exchanging the money earned from doing a specialist job for the goods and services they wish to buy.
+ A store of value enabling people to save in order to buy goods in the future.
+ A measure of value enabling people to assess the value of different goods
and services by comparing prices.
+ A means of deferred payments enabling people to buy goods and pay for
them on credit.
