Markets and Division of Labor - Case Study Example

Running Head: Markets & Division of Labor Markets & Division of Labor [Institute’s Markets & Division of Labor Market is one ofthe arenas where the world of commerce and the entire business community comes under one roof with their unique set of ideas, thoughts, and creativity in order to compete for a firm and enduring recognition. In fact, as the world has penetrated into the world of advancements, the marketplace has become a global and a more competitive place. With this competent market, it has become essential for organizations to divide their tasks and responsibilities amongst their labors and workforce on order to achieve their goals and attain the level of global competence (Smith, 2009, pp. 7-10). This splitting up and distributing the labor into smaller tasks and jobs emerged the concept of division of labor, as the production process is a huge and complex process. Adam Smith, one of the well-known economists and capitalists, not only presented this idea of division of labor but also was one of the first people to attempt a theory of it. This means that instead of one person striving to complete the entire job, allocating a group of people to perform a small number of specialized tasks would result in greater productive outputs of intricate jobs with less amount of investment utilization (Smith, 2009, pp. 7-10). In other words, the breaking or splitting the entire (big) job into smaller tasks and duties so that multiple workforce performs the tasks and duties, instead of a single person performing the entire job. Moreover, the division of labors means that the labors come under severance into different categories of labor where each set of different workers perform a different task with the division of the work that can come under accomplishment into a product (Smith, 2009, pp. 7-10). This splitting up the workers for specialized work lays the foundation on the principle that the workforce would be able to produce a higher degree of efficiency and productive output when they comes under constraint to perform a particular process, rather than the entire route. Furthermore, by performing smaller tasks, the workers tend to become more skillful and expert in that particular area of production, thus they would be able to be more productive. This also means that the specialized worker would also require less time in production as the time in switching the jobs would come under elimination (Besanko, Dranove, Shanley & Schaefer, 2009, pp. 49-51). Division of labor is one of the fundamental ideologies used in the production systems. This division of labor into specialized jobs reduces the overall cost leads to the comparative advantage for the organization. However, this materializes the economic interdependence and specialization, which is another aspect that comes in relation to the division of labor. In addition, specialization came under consideration by the economist Adam Smith as a vital aspect for the economic growth due to the reason that it facilitated the industries in producing escalated returns (Besanko, Dranove, Shanley & Schaefer, 2009, pp. 49-51). Division of labor has come under explanation by several economists; however, each person has a different point of view to some extent. Besides, the impact of market and division of labor on social cohesion has been a matter of concern since this concept came into emergence, however, this concern led to several disputes, arguments, and critique by various opponent economists. Whilst looking at the historical evidences, one cannot ignore the fact that division of labor is one of the concepts and notion that has come under origination by Adam smith and he is one who laid key emphasis on the values that ensue from labor disbursed in the production process. Besides, this notion does not have a very long historic background and has surfaced in the latter half of the eighteenth century (British Broadcasting Corporation, 1972, pp. 202-203). Past analysis also elucidates the understanding that humans inclination toward trade and exchange is the primary principle that gave occurrence to the division of labor, and has not aroused from instinctive knowledge. The evidences provide an understanding that the continent of Europe was the first to practice and practically implement the concept of division of labor. The European nations used this phenomenon in order to have a free trade and economy from that of political and social administration that governed every facet predominantly the economic sector of their nations (British Broadcasting Corporation, 1972, pp. 202-203). However, as time passed by and the world encountered scores of technological and scientific advancements and innovations, the phenomenon of division of labor described by Adam Smith in the modern economy has also transformed, as now the machines and computers have taken over the place of humans. Indeed, the sectors that take account of administrative, political, scientific and many others that are separate from the economic sector in the contemporary world of today have also become specialized. As consequence, the division of labor classified by Adam Smith is being practiced commonly and largely by all the sectors (Persson, 2010, pp. 22-24). According to Smith, the division of labor would save time and money by not deviating to other tasks, but this give rise to one of the potential issues that the workforce might become ineffective, fruitless and displeased in their performances. This is because the mundane and cyclical work jobs create a feeling of dissatisfaction or frustration due to hi-tech machineries. However, education and wisdom can overcome this feeling of dissatisfaction amongst the workforce (Wood, 1987, pp. 134-135). Another significant aspect that must come to limelight defined by Adam Smith in the division of labor denotes that the organizations must employ and hire the labors for the jobs that must go well with their skills, abilities, and capabilities to the utmost level. This productive labor accomplishes two primary and pivotal requirements, according to Smith. Firstly, when the labors come under recruitment according to their areas of expertise, they lead to produce the final products effectively. Secondly, the productive labors increase the probability to create superfluous products that can even come under utilization for re-empowerment into the production process (Besanko, Dranove, Shanley & Schaefer, 2009, pp. 49-51). By looking at the division of labor according to Smith, it has also come to an understanding that derivation of value has been of significant importance and has come under identification in two diverse types: one is use value and the other is exchange value. The prime intention behind the identification of source of value was to discover and set a point of reference that can assess and evaluate the economic growth of the organization. Consequently, the labor came under reference as the basis of the value (Bratton, Denham, Deutschmann & Deutschmann, 2009, pp.116-117). Another aspect that needs to draw the focus on is the social cohesion with respect to market and division of labor. The element of social cohesion has come under association to division of labor from the time this concept came into emergence. Social cohesion is a term used in a broad spectrum, which delineates the acquaintance and connection that makes the people of the community think and respond in a collective way. This means that the people of the entire community come under one platform to work in collaboration in order to achieve a shared objective (Council of Europe, 2005, pp. 15-17). However, social cohesion explained by Council of Europe state, "Social cohesion is the capacity of a society to ensure the well-being of all its members, minimising disparities and avoiding marginalisation" (Council of Europe, 2009, pp. 144). Social cohesion also portray that the members of the society must accept, respect and value not only all the members of the society but also their cultures. Devotion, social contact, and establishment of the community are fundamental to have social cohesion, which amalgamates the people as a distinct entity in order to support and facilitate the residents and the society on whole based on economic, social, health, educational and economical perspectives. This common and shared goal creates a sense of belonging for its members, which makes diversity a valuable source, thus eliminating the cultural differences amongst all and providing equal opportunities for everybody (Council of Europe, 2005, pp. 15-17, 24). Social consistency and solidity with reference to division of labor and market has also been the subject matter that came under numerous canvass and contention by the economists on various occasions. This mainly came under consideration in order to discover whether the division of labor and market plays a constructive or unenthusiastic role in social cohesion or not. However, labor is one of the aspects that come under the direct relationship with the market, which means that with as market size enlarge, it increase the propensity of the labor to become more specialized. However, the economic institutions come under profound dependencies over the specialized labor such that as the specialized labor increase, it becomes essential for the economic institutions to constitute the correlation amongst them (Council of Europe, 2005, pp. 15-17, 24). According to Adam Smith, the division of labor is one idea that has numerous benefits of dividing the workforce into multiple and separate branches. According to him, with the division of labor, the organization reduces the job of the worker to particular and specific roles, which provides individual workforce with much more opportunities to make improvements and enhance their skills and capabilities, accuracy, agility, and excellence to greater extent. Indeed, Adam Smith states that the division of labor leads to increased quality, productivity, and overall profit for the organization as well as for individual workforce (Schmid, 2008, pp. 12-14). From various perspectives, it has come to notice that Smiths theory of division of labor that produces efficient output from the workers have proved to be extremely effectual and successful in the industrial world that creates an individuality amongst all workforce until the final product comes. As an outcome of it, the factor of social cohesion comes under persuasion on an overall basis (Schmid, 2008, pp. 12-14). Smiths conception of division of labor states that the labor only needs to have complete awareness and knowledge about the specific tasks that would come under performance and not the entire production process. Moreover, the labor does not need to have a large-scale knowledge and the vision on whole. This enables the individual worker to have complete concentration and focus on making the skill set in a flawless manner, and hence would lead to increased quality and performance. Consequently, the impact that the industrial revolution brought is the socialization of labor. This is because the division of labor escorted the specialization, which led to increased productivity, thus mounting the inter-dependency upon one another, which shed the light on socialization of labor (Schmid, 2008, pp. 12-14). Adam smith alleged and claimed division of labor as the fundamental source of social cohesion, solidity, and stability. Free market and capitalism has come under consideration by Adam Smith as the cornerstone that can lead the members to have a thriving and flourishing the social order. In fact, division of labor is also the main constituent for the social cohesion. This is because; the division of labor leads to enhancement in the skills of the labors that result in increased productivity. Adam Smith also believed that division of labor adds a great value and encourages the social cohesion because of the economic reliance with each other. Indeed, the social relationship, bonding, collaboration, joint effort, and solidarity are few of the aspects that support the social cohesion, which comes under derivation from the division of labor (Furze, Savy, Brym & Lie, 2011, pp. 127-129). Studies and records exhibit that the deprived and unprivileged members of the lower social class is not the only one coming under effect by the division of labor, but the entire society and its members are being effected from its effects. This is because the capitalism and free market has broadened the scope of division of labor to all the sectors of the economy. Adam Smith pronounced that with the division of labor, the personal economic benefit would encourage and contribute to the maximization of the affluence and prosperity within the society. Moreover, this conception also deems that mutual and common benefit of the society is adequate to make certain the social cohesion. This means that people when people would have a collective wisdom of the rules regulating the cooperation, then the social cohesion is essential (Furze, Savy, Brym & Lie, 2011, pp. 127-129). Adam Smith also proclaimed that division of labor is the primary and significant underpinning for the wealth of the society as well as its cohesion for two basic reasons. Firstly, by practicing the division of labor, the labors with their specialization are able to be more productive, hence augmenting the quality and productivity. This increased productivity leads to the amplified and greater wealth. While the second perspective clarifies that, the division of labor creates an economic dependency upon the members of the society, which leads to greater interaction and dealings, cooperation and teamwork and exchange or sharing of economic interests. Therefore, the social cooperation and social cohesion would come under basis on the mutual benefits (Schmid, 2008, pp. 12-14). While looking at the other end, in contrast to the application of division of labor and market with respect to social cohesion, philosophers, theorists and economists provide very dissimilar perceptions and concepts. The economist in opposition to Adam Smith affirms that the application of division of labor failed within the international trade market; rather it is only applicable to the domestic market within a factory or industry. Political and social experts view that escalating unemployment rates and discrimination in wages are one of the leading and potential threats to social cohesion in the todays epoch, and even observe these factors as the basis of declining in social cohesion. This is because the division of labor limits and narrows down the knowledge and understanding to a particular task or job (Furze, Savy, Brym & Lie, 2011, pp. 127-129). Some of the theorists and economists presume that division of labor is not the root cause of social cohesion and solidity. This is because, according to them, people would undoubtedly work collectively towards a common goal if they become conscious that the particular gain would provide benefit to all. In addition, people also work in collaboration for their personal welfare and interest for upcoming prospects. Therefore, it is not vital to have a division of labor that leads to social cohesion, as social solidity can come under achievement without this division as well (Furze, Savy, Brym & Lie, 2011, pp. 127-129). Studies have also brought the fact to notice that free markets in the contemporary world of today that practice division of labor have become a major source of social breakdown in many of the developed nations. In addition, social cohesion dependent organizations have also come under abating due to the division of labors. Therefore, these economists strongly claim and declare that division of labor discourages the social cohesion to great extent. The sociological and philosophical critique provided by various thinkers the capitalism and division of labor cause the labors to come under degradation or humiliation, thus creating an impact to the social cohesion and economic insecurity on whole (Wood, 1987, pp.133-135). According to some schools of thoughts, division of labor leads to functional interdependencies, which principally contributes to the decline of the shared conviction and principles. Furthermore, these people declare that labors in the pre-industrial societies have come under dissection and partition with the characteristics of homogeneity, but were in a dispersed way. In fact, these societies followed and maintained collective ethics and principles supported by strict rules and regulations. These penal principles led the society to have uniformity amongst the members. However, the world transformed with the passage of time and became an industrialized economic world that promoted the aspect of specialization and made the industries more distinct and unique (Persson, 2010, pp. 22-24). Few of the economists in difference to the viewpoint of Adam Smith have challenged the rationalization of Smiths concept of specialization as a source to social cohesion. While Adam laid the emphasis on the origin of division of labor through the trade and exchange, this has come under confrontation. By the challengers, the human diversity in the natural way and the environmental factors are the key foundations stones of the specialization of the labour. Therefore, according to their challenges the social cohesion is also possible without the division of labor (Beckert, 2002, pp. 84-87). On few occasions, it has also come to notice that the economists also exhibit that the capability through which the labors create a bond and relationship comes under overturn and invalidation in this commercial era, which is the result of highly critical and weakening potential exposed. As consequence, it discourages the social cohesion to an extreme level. This can come under well explanation with the fact that labors collaborate, have a shared vision, and dispense weight of the society only when they have a reason of benefit behind the shared vision. In addition, these economist robustly believe that specialization contracts and limits the opinions and views of the workers that makes them weak and ailing while performing the public duties and having a common goal (Beckert, 2002, pp. 84-87). The opponent economists also illuminate the piece of information that division of labor discourages the social cohesion in a very strong way. This is because the division of labor leads to variation and discrimination in the income amongst the labors. Additionally, the income inequality is one of the dominant aspects that come under association to social cohesion. This is because the biased and discriminated behaviors in wages would lead the people not to have trust upon one another, thus community involvement and shared vision would not be the outcome. This leads to decline in the social cohesion and increase social unrest, as the people are unable to fulfill their basis needs and wants, thus deteriorating the economic instability as well (Beckert, 2002, pp. 84-87). Advocates and promoters of the concept of division of labor believe that the societies and communities on an international platform have come under numerous benefits from this division of labor and specialization. However, quite in opposite, several economists brings to limelight the drawbacks of division of labor that it leads to unsteadiness, social cohesion, and biased division of benefits. In conclusion, it can come under well articulation that from the past review and analysis, it has come under concentration that market and division of labor from centuries have been a hot topic under discussion by numerous economists with varying perspectives. According to Adam Smiths proposition, division of labor had been the root cause of growth on whole. However, the growth and division of labor comes under fundamental relationship with the specialization of workforce into smaller portions of jobs. As an outcome of specialized workforce, more social contacts and solidity comes under view. Division of labor has also come under consideration as the signature characteristic of the free market and industrialism. In general, from the elements discussed in the above report, the concept presented by Adam Smith on market and division of labor creates wisdom that division of labor promotes and helps in raising the undeviating productivity that leads to social cohesion to large extent. References British Broadcasting Corporation. 1972. The Listener, Volume 88. British Broadcasting Corporation. Beckert, J. 2002. Beyond the Market: The Social Foundations of Economic Efficiency. Princeton University Press. Besanko, D., Dranove, D., Shanley, M. & Schaefer, S. 2009. Economics of Strategy. John Wiley & Sons. Bratton, J., Denham, D., Deutschmann, L. & Deutschmann, L. B. 2009. Capitalism and Classical Sociological Theory. University of Toronto Press. Council of Europe. 2009. Institutional Accommodation and the Citizen: Legal and Political Interaction in a Pluralist Society. Council of Europe. Council of Europe. 2005. Concerted Development of Social Cohesion Indicators: Methodological Guide. Council of Europe. Furze, B., Savy, P., Brym, R. & Lie, J. 2011. Sociology in Todays World. Cengage Learning. Persson, K. G. 2010. An Economic History of Europe: Knowledge, Institutions, and Growth, 600 to the Present. Cambridge University Press. Schmid, G. 2008. Full Employment in Europe: Managing Labour Market Transitions and Risks. Edward Elgar Publishing. Smith, A. 2009. The Wealth of Nations. Digireads.com Publishing. Wood, J. 1987. Karl Marxs Economics: Critical Assessments. Routledge. Read More