Specialisation & Division of Labour

To specialise in something means that you have detailed knowledge on a particular area of industry and you become good at what it is you specialise in. Whether that be the computing graduate that specialises in hardware or the mechanic that specialises in BMW repairs customers will come to them for their abilities. It has become something of a marketing point or Unique Selling Point (USP) for these firms.

Specialising means that a firm concentrates on a certain area of industry which may mean that their product range is limited. A catering company can't have extensive knowledge about every food in the world so their quality of some foods may be poor. Hence they may specialise in burgers and hot-dogs, so focus their time on researching and manufacturing the perfect recipe for them. The result of this is probably a smaller product portfolio (They sell less variety of product) but as they are concentrating on the burgers they become more efficient due to the repetition of the burger manufacturing process. This leads to less wastage and higher productivity. Hence the price per unit may decrease to the customer and so more people come to you for burgers.

Now that we understand Specialisation, Division of Labour is similar.

This is to divide up a process into individual tasks. For example Henry Ford opened up his River Rouge production line in Detroit to manufacture the Model T motorcar, he was being innovative as there was a production line where each worker would repeat the same process over and over again and the work comes to them. Fast forward a century and the same principles apply - albeit with machines in some industries.

The point is it saves time and money in training if Bob only needs to learn how to fit the dashboard and Julia only needs training to upholster the seats. Therefore due to repetition and practice of the same process. (i.e Bob fits a dashboard to every car that comes past on the conveyor - belt) they become very efficient and very skilled at their job. Hence they become specialists.

However this method can be very boring for staff (monotony) so firms may expect high staff turnover as people are constantly leaving. Therefore although as we established earlier that training for a single process is cheaper, there may well be more people to train. This also limits skills and so workers cannot be flexible. If Julia the upholsterer is on holiday, Bob can't take her place because he doesn't know what to do.


However specialisation relies on there being sufficient demand in the market. This is why mass market products work best because you can't just relentlessly build cars if nobody will buy them. Then storage becomes a problem for the firm. And then if production is stopped there will be redundancies and unemployment.

A final point about Specialisation and Division of labour is that there is a great deal of interdependence. For the production line to work and everyone to be working suppliers have to supply parts on time and every time. You can't fit the wheels to the car if there are no axles. So nobody beyond the axle stage of production can do their specialist task. Production soon grinds to a halt. Nowadays firms like Toyota state in the contract that the suppliers can be fined if Toyota are forced to stop their production lines.