effect on the world economy
Division of labor is a form of specialization in which the production of a product or service is divided into severalseparate tasks, each performed by one person. Inherent within the specialization and division of labor is knowledge of the precise limit of each worker's "sphere of competence," and the authority toperform individual tasks without overlapping others.
Adam Smith (economist) suggested that productivity would increase significantly when the division of labor principle was used. Output per workerwould be increased while costs per unit produced would be reduced. Division of labor was applied, in organizations that used mass production, each worker specialized in completing one specializedtask, and the combined work of several specialized workers produced the final product. For example, the individual parts of cars and televisions are made by many different workers and then put together inan assembly line. Other well-known examples of this specialization and division of labor are seen in the production of computers and electrical appliances. But even kitchens in large restaurants havedifferent chefs for different items, and professional workers such as doctors and dentists have also become more specialized during the past century. The idea that specialization reduces costs, andthereby the price the consumer pays, is integrated in the principle of comparative advantage. Division of labor is the basic principle underlying the assembly line in mass production systems.
Sincethe time of Adam Smith, division of labor has been perceived as a central feature of economic progress. Two aspects of labor exist. First is the division of labor within companies, this concern therange of tasks performed by workers within a particular firm. Second is the division of labor between companies, this concern the range of products or services the firm produces.
In some organizations,...