STUDENTS' CORNER - 4
To continue with the advantages of the division of labour, we can recall what Adam Smith himself has said. He gives the example of pin-production. Suppose a worker is able to produce 20 pins a day. And if making of pins is divided into 18 parts, then, all the workers put together will be able to produce 20,000 pins in a single day. So, the manifold increase in production brings advantage to the producer.
In what way, the increase in production is an advantage, one might ask. Without going deep into the mechanics of marketing and market forces, today, in fact, any day, business is competition. And competition means you have to win in the competition largely to remain in the business; winning means winning over the other producers of the same commodity. They use the word, the rival in business language. Availability of your product is the first essential point in the business. In that sense, increase in production means readiness to supply your product to the users all time. You have to employ more men, no doubt. But the revenue they bring you is generally more than you spend on them.
Winning your rival does not begin and end with the number only. It is much deeper. There is the great permanent price war. You must be able to give your product a little bit less in cost. Here also, increased production gives the business man some flexibility in fixing the price. Thus, we find increase in production has some advantages and the division of labour comes very helpful here.
There are some other advantages also to the employer, that is, to the producer. All employers know for a fact that an inefficient employee will prove more a burden wasting time and money in the form of equipments. Here, selecting a right person will not be a difficult task because in the context of division of labour, a worker will be doing a part of the whole job and it is easy therefore to check him whether he is fit for the small job. In other words, selection of a right man for the right job does not tax the employer. It is not like selecting a manager or finance officer where they have to concern themselves generally with the whole of the organization in respect of their responsibility.
Another advantage for the producer is it saves lot of money. It is enough he gives the worker what tools he requires for his part of the job. Supposing he is the only worker, he must have, say, ten instruments to complete his job. But in the division of labour, each worker need not be given the ten required instruments for the job. In that sense, it saves money for the employer, the producer.
In one more sense also, it saves money for the producer. Generally, the workers must be given training. In big companies and corporate, there is budget allotment for training of the workers. Here, in division of labour, training an employee will not cost much because he is trained only for that small portion of the work allotted to him.
Another great advantage that results from this cost-effective training is the great possibility of producing quality products. Becoming efficient in doing a small part of a big job is far easier than becoming efficient in carrying out a big job by himself all alone.
Having seen the advantages of the division of labour for the producer, we shall next deal with the advantages for the labour.