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BCom 1st Year Division of Labour Notes Study Material

BCom 1st Year Division of Labour Notes Study Material

BCom 1st Year Division of Labour Notes Study Material

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BCom 1st Year Division of Labour Notes Study Material
BCom 1st Year Division of Labour Notes Study Material

BCom 1st Year Division of Labour Notes Study Material


Division of labour is the process whereby labour is allocated to the activity in which it is most productive, that is, in which it can make best use of its skills. In other words, it is the specialisation of workers in particular parts or operations of a production process. As a result of division of labour no one person carries out all the tasks in the production, instead each specialises in that part of the work in which he has a comparative advantage.

When a man working alone undertakes the entire production of a good, there is no division of labour. If, for example, one person rears his own sheep, clips the wool himself, cleans and combs it, spins it into thread, weaves it into cloth and dyes it, the manufacture of cloth involves no division of labour. If, on the other hand, one man tends the sheep, another does the shearing, a third the scouring, a fourth the combing, a fifth the spinning, a sixth the weaving and a seventh the dyeing, there is considerable division of labour.

Adam Smith began his wealth of Nations with a discussion of the division of labour. Some economists are of the opinion that the term “specialisation” is perhaps better than the term “division of labour” because “besides the specialisation of labour into different occupations we have the specialisation of capital into different kinds of machinery and other assets, and specialisation of land into different uses.”

Forms of Division of Labour

Division of labour many take several forms. The following are its main forms:

(a) Simple Division of Labour: This is the division of labour into occupations or trades. Even under the most primitive conditions of human existence, this type of division of labour could be found where the man spent his time fighting and hunting, while the woman looked after the home and children.

With the development of agriculture, man worked on land and served as warrior, while woman tended animal and looked after the home and children. Manu’s division of Hindu society into four main groups is also based on this type of simple division of labour. Occupational division into farmers, carpenters, blacksmiths, potters, weavers, etc. is an example of this type division of labour.

(b) Complex Division of Labour: It is division of labour into tasks or by process. Only a small part of the work is undertaken by one person, each of whom specialises in a single process. This type of division of labour came with the development of the factory system when production was split up into a number of separate processes, each undertaken by a different worker.

(c) Territorial or Geographical Division of Labour: This is also known as localisation of industries. Certain places or regions come to specialise in the making of certain articles, e.g., cotton textiles in Ahmedabad, hosiery at Ludhiana, etc. Thus regions as well as persons specialize; this is territorial division of labour.

Advantages and Disadvantages of Division of Labour

Advantages or Merits

Broad advantages of division of labour have long been understood. They were also clearly documented by Adam Smith. The following are the important merits:

(i) Most Fruitful Employment of Special Natural Aptitudes: Division of labour gives scope for the most fruitful employment of special natural aptitudes. As Marshall says, division of labour keeps “everyone employed at such work as his abilities and training fit him to do well……….” Division of labour offers chances to each man to get the job for which he is best fitted. As it is said, there would be no round pegs in square holes. And as Robertson says, it “promotes the development of natural aptitudes by those who possess them, and the acquisition of special skill by those who do not.”

(ii) Greater Skill of the Workers: Division of labour results in workers acquiring greater skill at their jobs, for “by reducing every man’s business to some simple operation, and by making this operation the sole employment of his life, necessarily increases very much dexterity of the workman.” In other words, “practice makes perfect.” The constant repetition of a task makes its performance almost automatic.

(iii) Continuous Employment of Worker and Saving of Time: Division of labour enables a worker to be continuously employed on a single job. It saves the actual loss of time which is involved in passing from one job to another. By keeping to a single operation, a workman can accomplish a great deal more, since he wastes less time between operations. Less time is also required to learn how to perform a single operation than to learn a complete trade. Thus there is saving of time.

(iv) Continuous Employment of Tool: Division of labour facilitates the continuous employment of not only the man but also of the tool. Even in primitive state of technology, a tool is an expensive thing in which a certas amount of capital is locked up.

If, for example, three persons keep in their home three separate tools of the same type and each of the tools is used only 10 part of the day, there is waste of capital as all the three tools lie idle for the 10 of the day. But if there be such an arrangement in which there is only one and each of the three persons works on it for eight hours a day, the tool is kep employed continuously. Thus there is saving of capital.

(v) Employment of Specialists: Division of labour leads to the splitting a work into many separate tasks, each often requiring its own particular skill.

It leads to specialisation, that is, each worker specialising in the work for which he has the greatest aptitude.

(vi) Greater Use of Machinery: Division of labour has made possible a for use of machinery. Once a piece of work was reduced to mere routine, it ed the way for the employment of a machine to carry out the operation; ut was still further increased. “Division of labour paved the way for the troduction of machinery and mass-production methods.”

(vii) Less Fatigue: It is claimed that the worker, habituated to the netition of simple tasks, becomes less fatigued by his work. Further, division of labour makes it possible for heavy work to be passed on to machinery, while men perform only light work. Consequently there is less strain on workers’ muscles.

(viii) Cheaper Things: On account of the use of methods of mass-production, cheaper products are turned out which even the poor can purchase.

(ix) Expansion of Production: Division of labour has led to the enormous expansion of production. Adam Smith gave an example of pin-making to illustrate this point. Without division of labour, that is, one man performing every operation himself, a workman could produce no more than 20 pins in a day.

In one small workshop which Adam Smith visited ten men were employed, though 18 operations were involved, the total output often reached 48,000 pins per day, giving an average of 4,800 pins per workman, as against twenty each where there was no division of labour. However, it must be noted that the enormous expansion of production today is not the result of division of labour alone but also due to invention of new and better machines, that is, the increasing use of capital.

(x) Invention: When a man does the same work over and over again, some new ideas are certain to occur leading to inventions.

Disadvantages or Demerits

Division of labour is not an unmixed gain; it involves a certain cost. Some of its disadvantages are as given under:

(i) Monotony of the Work: Minute division of labour leads to each workman performing only one small operation a great many times each day. His work, therefore, becomes very monotonous and tends to dull the intelligence. There is no pleasure in doing the job.

(ii) The Decline of Craftsmanship: It is said that the division of labour uces a person to just a workman and he ceases to be a craftsman and becomes a tender of a machine. This is true to a large extent.

(iii) Greater Risk of Unemployment: The division of labour turns workers Specialists to a greater or less degree. Greater the degree of specialisation, ore specific the labour and lesser the chance for the workers in a declining ry to obtain alternative employment. Under modern conditions of largeproduction, goods are produced in anticipation of demand instead of in onse to direct orders. This increases the risk of unemployment as producer’s pectations may go wrong.

(iv) Evils of Factory System: Division of labour has given rise to the factory system. It has created many evils, such as, spoiling the natural beauty and pllution of the environment. Further, workers often work in inhuman conditions resulting in industrial sickness.

(v) Lack of Responsibility: When each worker performs only a minute of an operation, he has no feeling of a sense of responsibility for the product. If the product turns out to be defective, no one accepts the re sibility for it.


In spite of some demerits associated with division of labour, it cannot denied that the advantages far outweigh the disadvantages. Modern welcome states have taken many regulatory measures to minimise the demerits division of labour.

Division of Labour and Extent of the Market

Division of labour has led to the modern exchange economy and specialisa. tion. Consequently, individuals cannot produce all his requirements them. selves, they purchase other requirements from other specialists through the medium of money. Thus division of labour leads to specialisation which implies exchange.

Adam Smith laid down a very important principle. Division of labour, he said, is limited by the extent of the market. In other words, the extent to which division of labour can be carried is determined by the demand for the commodity. Division of labour causes an increase in total output and the further it is taken the greater will be output. The commodity for which there is a wide market is the one in which great specialisation will occur.

The size of the market for the product of a factory is not measured by the geographical area over which the good is sold, nor even by the population of that area. It is measured by the productive unit’s potential volume of sale. London is a much bigger market than the Sahara Desert. Anything which increases the total real income, or the purchasing power, of a country causes an increase in its importance as a market.

The revolution in transport with the coming of railways and steamships expanded the market historically. It opened up large geographical areas for the sale of output of the large factories. Other influences, such as the growth populations, rising real incomes, reductions in import duties and inventiolle such as refrigerations, also played their part in widening the extent of th markets for many products.

“Specialisation is worthwhile only if the market—that is to say, the potential demand for the services of the specialised factors of production is big enough to keep them fairly fully employed…. It is the potential rather than the actual size of the market which matters.”

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