Meaning of Division of Labour:

When many people combine to produce an article, the work is so arranged that the making of the article is split up into a number of processes.

Each process is then assigned to a separate set of people. This specialization is known in Economics as Division of Labour.

For example, let us see how a chair is made in a big furniture factory.


One group is engaged in making legs, another in making backs, another seats and still another joining them, and, finally, there is a group of workers polishing the chairs. This is division of labour. Adam Smith illustrates this with the example of pin-making which in his time was split up into as many as eighteen distinct processes.

Forms of Division of Labour:

Division of labour takes several forms:

There may be division into callings occupations, division into industries, division into complete processes, and, finally, division into incomplete processes.


The following main forms of division of labour may be mentioned:

Simple Division of Labour:

This means division into occupations or trades. For example, Manu divided the Hindu society into four main groups. Gradually trades or occupations multiplied. We have now shopkeepers, farmers, car­penters, weavers, etc. This is the simple division of labour.

Complex Division of Labour:


This means division into tasks or complete processes. For example, making of cloth is divided into processes of spinning, sizing, weaving, bleaching, finishing, etc. The work may be further split up into incomplete processes. It is said that making a pin, in a modern factory, is divided into 18 processes.

Territorial or Geographical Division of Labour:

This is also known as localization of industries. Certain places or regions come to specialize in the making of certain articles, e.g., hosiery at Ludhiana, cotton textiles in Ahmedabad and Bombay, jute industry in Calcutta, etc.


Economists are very enthusiastic about the advantages that have resulted from division of labour.

The system benefits the worker in the following ways:

Right Man in the Right Place:

Under division of labour, the chances are that each man will get the job for which he is best fitted. There will be no round pegs in square holes. The work will be better done. On the other hand, just imagine an interchange of work between a farmer and his wife—he doing the cooking, and she ploughing the field. You can guess the result.

Improvement in Skill:


Practice makes a man perfect. When a man does a certain work over and over again, he is bound to improve. He will be able to turn out better goods. There is an increase in his skill and dexterity. The worker benefits. He produces better results in less time.

Less Strain:

Division of labour makes it possible for heavy work to be passed on to machinery. Only light work is done by men so that there is less strain on their muscles.

Less Training Required:


As the worker has to do only a part of the job, he need learn only that much. Long and costly training is rendered unnecessary. The shortening of the period of training for a worker is a great gain. Besides these benefits to labour, there are advantages to the industrial system and to society as a whole from the introduction of division of labour.


When a man is doing the same work over and over again, some new ideas are bound to occur. This leads to inventions. These inventions make for economic progress.

Introduction of Machinery:


By division of labour, the work is reduced to a few simple movements. Sooner or later, some machinery is brought in to take over these mechanical movements.

Cheaper Things:

On account of mass production made possible by division of labour and the use of machinery, cheaper things are turned out. Eyen poor persons can enjoy them. This is beneficial to society. Standard of living improves.

Economy of Tools:

It is not necessary to provide each worker with a complete set of tools. He needs a few tools only for the job he has to do. These tools are kept continuously employed. This proves very economical.

Saving in Time:


The worker has no longer to move from one process to another. He is employed on the same process. He, therefore, goes oil working without loss of time. Continuity in work means more production.

Rise of Entrepreneurs:

As work is divided, somebody is needed to co-ordinate the work. This leads to the rise of entrepreneurs who specialise in the work of organisation. This has contributed to the productive efficiency of the community and economic progress.


Division of labour has proved harmful to the individual workers in certain ways:



Doing the same work over and over again without any change produces mental fatigue. Work becomes irksome and monotonous there is no pleasure in the job. The worker cannot be expected to take any interest. The quality of work must suffer.

Kills Creative Instinct:

Since many men contribute to the making of an article, none can claim the credit of making it. Man’s creative instinct is not satisfied. The work gives him no pride and no pleasure, since no worker can claim the product as his own creation.

Loss of Skill:

The worker deteriorates in technical skill: Instead of making the whole article, the worker is required just to repeat a few simple movements. The skill with which the artisan once made the artistic products gradually dies out. He simply becomes a machine tender. The weaver of Dacca muslin fame is gone.

Checks Mobility:


The worker is doing only a part of the job. He knows only that much, and no more. It may not be easy for him to find exactly the same job elsewhere, if he desires a change. In this way, the worker loses mobility.

Risk of Unemployment:

If the worker is dismissed from one factory, he may have to search far and wide before he secures a job in which he has specialized. He may be making only legs of a chair. It is doubtful if he can get the same job elsewhere. On the other hand, if he knew how to make the complete chair, his chance of getting a job elsewhere would be brighter.

Checks Development of Personality:

It is said that if a man has been making an eighteenth part of a pin, he becomes eighteenth part of a man. A man grows in body and mind to the extent that his faculties are exercised in his job. A narrow sphere of work must check proper physical and mental development of the worker. His outlook is cramped and initiative killed, and he is reduced to the level of a machine.

Loss of Sense of Responsibility:


None can be held responsible for bad production because none makes the whole article. When the result is bad, everybody tries to shift the responsibility to somebody else. This adds to the difficulties of administration. Besides proving detrimental to the worker, the system of division of labour has produced many social evils.

Evils of Factory System:

Division of labour gives rise to the factory system which is full of evils. It spoils the beauty of the place all round and pollutes the environments. It leads to exploitation of women and children and removes the personal factor in production and management. Industry has become dehumanized.

Problem of Distribution:

When there is no division of labour, a worker makes the whole article independently. He gets its value, and there is no trouble. But under division of labour, many persons contribute to the production of an article. They must receive a due share of the product, and it is not easy to determine this share. Thus, the problem of distribution is made difficult. It has divided the community into two warring camps, viz., labour and capital. The gap between the master and the men is daily growing wider and unbridgeable.


The dependence of one country upon another, which is the necessary consequence of division of labour, proves dangerous in times of war. This dependence is the result of territorial division of labour.


Division of labour is no doubt attended with a number of drawbacks. But the advantages certainly outweigh the disadvantages. The evils can be minimised by shortening the hours of work and providing more leisure to the worker. It is no longer possible, nor is it desirable, to do away with this system.

Limitations of Division of Labour:

There is no doubt that the division of labour is very beneficial to the workers, the entrepreneur and the society in general. But it has serious limitations: Its introduction and operation depends on certain conditions. Unless those conditions are fulfilled, division of labour will be either out of the question or will not be useful.

(a) The most important condition relates to the size of the market. Unless the market is wide enough, division of labour will not be profitable.

(b) Similarly, nature ‘of the product imposes another limitation. If the product is such that its manufacture cannot be split up into distinct process, no division of labour will be possible.

(c) The training and character of the people is another limitation. Only persons trained to work together and having spirit of co-operation can make division of labour successful.

(d) Another limitation arises from the ability of the manager or the entrepreneur. Not only should he have a thorough understanding of the techniques of production, but have also the ability to harness and control the working force.

We fully discuss the various conditions of division of labour below:

Conditions for Division of Labour:

The application of the principle of division of labour depends on certain conditions.

The following are some of these conditions:

Spirit of Co-operation:

Division of labour assumes an advanced stage of civilization. If the people are quarrelsome and cannot work together amicably, division of labour will be out of the question. The people must have developed a spirit of co-operation, a spirit of compromise and a team spirit. Without the spirit of give and take, division of labour cannot be introduced.

Nature of Demand:

For division of labour not only is it necessary to have a wide market, but it is also essential that the demand should be steady. A small and fitful demand will limit the scope of division of labour. A stable demand is essential.

Nature of Industry:

Some industries are such that it is not possible to split up the work into distinct and separate processes. Here also the scope of division of labour is limited. Agriculture is such an industry. Possibility of splitting up production is essential for division of labour.

Laws of Returns:

In industries, where the law of diminishing returns operates, larger output means higher costs. Hence production will be kept down. This means that the scope for division of labour has become restricted. Where the law of increasing returns prevails, the possibilities of division of labour are greater, because production will be on a large scale.

Availability of Labour and Capital:

Division of labour implies production on a large scale. Large numbers of skilled workers are needed. As division of labour and use of machinery go together, large amounts will also have to be spent on machinery. If the required amounts of labour and capital are not forthcoming, division of labour cannot be extended.

Organising Ability:

Division of labour involves the employment of a number of workers in one factory. To handle them properly and to assign to each a suitable job requires judgment of human nature of a high order. Hence entrepreneur must have the necessary ability to organize production on a large scale. In the absence of it, the system of division of labour will break down


Another important condition is the establishment of the exact standards of length, area, weight, volume, etc. Without these specifications large-scale production, and hence division of labour, is not possible.

Extent of the Market:

Another important condition for division of labour is the existence of a wide market. Unless the market is wide enough, division of labour will be out of the question. We discuss it’s below more fully.

Division of labour is limited by the Extent of the Market:

The successful functioning of the system of division of labour depends on the extent of the market for the goods under production. Division of labour is generally to be found in big factories, where commodities are being produced on a large scale. Only then will it be possible to split up the job into different processes and to assign each process to a different set of workers.

Take the case of a tailor in a village:

He perhaps gets an order for the making of one or two shirts in a week. He can manage the job by himself. It will be foolish for him to employ a number of assistants and to assign to each separately the work of cutting, sewing, fixing the buttons, pressing, etc. He has not sufficient customers for the purpose.

His market is confined to his village and this leaves no scope for division of labour. If his fame spreads to nearby villagers, the circle of his clients will become wider. It will then be possible to engage assistants and to introduce division of labour. Hence, division of labour is limited by the extent of the market.

However, the market too, to some extent, depends on the division of labour. The system of division of labour turns out good quality products at cheaper prices. It is easy for them to find a market. The market, therefore, is gradually extended. In this manner, division of labour widens the market. But it is more true to say that the division of labour depends on the market than that the market depends upon division of labour.