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Division of labor is the separation of work into different roles, tasks and steps. This allows for specialization of skills such that individuals learn to become productive in a role. The division of labor also allows an organization to tackle large problems and handle high business volumes by assigning tasks to many participants. The following are illustrative examples of the division of labor.
TradeTrade between nations can be considered a division of labor. If one nation is efficient at producing steel and another efficient at producing wood, it makes sense for these nations to trade steel for wood.The process of procuring goods and services from partners is a type of division of labor. For example, a firm that purchases cloud computing services is essentially assigning work to the provider of such services.
Outsourcing business processes is a division of labor. For example, a fashion brand that outsources manufacturing and logistics to a partner.Dividing an organization into units and teams each with its own mandate.RolesA firm that hires people to perform different roles. This allows the firm to recruit people with different knowledge and abilities who are productive at each role.
ResponsibilitiesAssigning responsibilities is a common way to divide labor and allow individuals to focus on areas of strength. Setting goals and objectives for teams and individual contributors. For example, one marketing manager who has the objective of improving brand recognition while another is given a target to improve customer loyalty.
Assigning different tasks to different people. For example, a project that identifies hundreds of tasks that are assigned to dozens of employees.ProcessesThe steps in a process may be assigned to different people or teams. For example, a production process implemented as a series of workstations. This allows the team at each workstation to become highly productive at their set of process steps.AdvantagesThe division of labor is a fundamental economic principle that is the basis for an efficient economy. Specialization allows individuals to become productive by acquiring knowledge and abilities that are important to a role. This may improve the salary and value of workers. From the perspective of the firm, the division of labor is efficient and allows the firm to scale. DisadvantagesThe division of labor can result in a high level of dependence on an employee or partner. From the perspective of the employee, specialization can be boring, particularly if it results in repetitive work such as a step in a production process. Employees may also risk being overspecialized such that their skills are heavily related to a particular process or technology. This may present a challenge if such technologies or processes become outdated. Generally speaking, generalists have more career flexibility than specialists.Division of Labor vs Division of WorkStrictly speaking, the division of labor is breaking work into different skill sets to allow for specialization. The division of work is the process of breaking work into different tasks to allow for scale. However, these terms are often used interchangeably.|
| Type | | | Definition | The separation of work into different roles, tasks and steps to allow for specialization and scale. | | Also Known As | SpecializationDivision of Work | | Related Concepts | |
Efficiency
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