Specialisation
If people concentrate on things that they can do well, usually everyone benefits. This is called specialisation.
Specialisation occurs when workers are given specific tasks within a production process. Workers will only need to be trained for a specific task in order to be efficient. Therefore this will lead to an increase in labour productivity and firms will be able to benefit from economies of scale (lower average costs with increased output) and increased
efhciency.
In the modern economy many people perform specialist tasks, however because the economy is changing so rapidly it is important for workers to be flexible by learning new tasks.
The difference betwec specialisation and dvision of labour is that with specialisation a worker has
division is trained for a specific task whereas with division of labour the same task may be given to many workers who all do the same thing.
The disadvantages of division of labour
Division of labour has its disadvantages in that it tends to make people narrow in their skills and abilities and also leads to frustration and boredom. People who lose their jobs in one industry sector because the skill is no longer required, may find it
difficult to retrain for work in another sector. If there is a short supply of a skill, workers with the required skill may be able to charge excessive amounts of money. Boredom can lead to worker unrest and dissatisfaction. Some businesses are experimenting with teamwork in which workers become part of a team that engages in the total production of a product. This leads to higher job satisfaction.
Scale of production
In the previous sections we have discussed specialisation and the division of labour. Division of labour is typical of large manufacturing industries such as car manufacturing plants. Not all products are suitable to be manufactured in this manner. Scale of production refers to the size of operation that is best suited to products being manutactured.
We can distinguish between jobbing, batch production and mass production.
Jobbing
Products are made to meet a customer's specific requirements so that the product is unique and not the same as any of the other products made
Mass production
Production is based on the continuous flow of products. It is used for making huge quantities of similar products at speed. There are great economies of scale to be made from using this method of production due to lower production costs per unit, maximum use of machinery, cheaper prices for bulk, maximum output and profits. The cost of setting up this type of production system is high. It is capital intensive. Examples of products made according to this type of system are: electrical goods, motor vehicles, newspapers and books, etc.