This term paper explores the concept of division of labor, specifically how important is the division of labor to a capitalist economy? How does the division of labor lead to more efficient production? What are some examples of division of labor and specialization from your personal experiences?
The Concept of Division of Labor
In recent years, economists have created awareness for investors and managers that labor and workforce can be turned into an important of the organization if well managed. The labor force consists all the numbers of employees and staffs who are willing and able to supply labor in a company or an organization for the daily operations that particular a company. With proper training and equipment, the labor force can be able to increase the productivity of the company. Moreover, the division of labor is another method that a company can use to increase its productivity (Casson, 2012). Division of labor is an idea and concepts that state that the division of the production process into different stages enables the staff to focus on a specific task which in turns increases the overall efficiency of that employee considering that he can concentrate on one task rather than the whole production.\
In economics, there are different types of economic system capitalism being one of them. A capitalist system of economy is characterized by private ownership of means and production techniques and other operations in the attempt to make a profit. Division of labor is important to this type of economy in that:
- Helps to increase the efficiency of an organization – the workforce is made of different individuals who have different abilities, skills, and knowledge. Dividing this labor force into production units and placing the individual in production units in which they best fit, will increase the efficiency of any company. Moreover, the right man for the right job helps to increase the productivity with consistency; the employee becomes an expert in his area thus reducing chances of mistakes in the workplace.
- Helps to improve the quality of output provided by a company – with the division of labor, individual employees are signed up in production units in which they best fit and thus, improves the quality of production. With better and modern machines, the workforce can improve the final product they offer to their customers and thus increases the goodwill of the company(Deng, 2015).
- Inventions and innovations – a worker who is repeating the same task, again and again, every single day, is likely to find and develop new processes or ways of doing the same tasks. Considering that workers have enough time at their disposal to think about their duties and responsibilities, a creative worker may take advantage of this opportunity to introduce new processes of performing his duties.
- Saves time – with specialization, less time is spent in training workers considering that most of them already have the necessary knowledge and skills to perform their duties, and a little sharpening and polishing is a need. This is much cheaper compared to training a new employee in a new role. Division of labor saves time and money when it comes to training of employees.
Efficiency is a state where the company or individuals use minimum inputs regarding labor, money, resources and time to create the greatest amount of output while still maintaining the quality of their product or service. Finding the right man for the job reduces the amount of time that is likely to be spent in performing a particular task. Moreover, through the repetition of tasks, a particular employee becomes an expert in his field of work thus he or she is likely to use the minimum amount of time and money to perform a particular task. On the other hand, equipping individual employees with the right work tools ensures that a task that could be performed by several individuals can be performed by a single employee with the help of machine not forgetting that the machine is not prone to error like a human being (Parpart, 2016). Thus, a division of labor is likely to improve the efficiency of the labor force since the inputs regarding money, resources and time will be minimal but the output will be high.
Division of labor works best for every organization where there is a task at hand, and it is divided up by the area of specialization and expertise of the employees. A good example of how division of labor takes place is the daily running of a restaurant. The restaurant is one of the busiest places during the day because there is inflow and outflow of people as they come to have a meal or tea. To run the restaurant effectively and efficiently there is a need for division of task by skills and knowledge as the following breakdown shows.
- Human resource manager – ensures that there are enough employees to serve the guests satisfactory and to ensure there are always staffs in the standby to be called in case of emergency.
- Waiters – serves the guests with food and refreshments and offering any assistance should the guest need one.
- Accountant – provision of enough funds to finance the operations of the restaurant and to ensure there is a going concern for the business.
- Financial controller – preparation of both food and beverage costs to determine whether the restaurant is running at a loss or profit.