CH 15 DIVISION

OF L ABOUR
PRODUCTIVITY
• Rate at which goods are produced, and the
amount produced in relation to the work, time,
and money needed to produce them
➔ output per unit of input

• Labour productivity = output per worker

INCREASING PRODUCTION
Raising productivity
➔Produce more goods with same amount of
resources
➔Produce same amount with less resources
DIVISION OF
L ABOUR
DIVISION OF LABOUR 分工
• Breaking down of the production process into small parts
with each worker allocated to a specific task
DIVISION OF LABOUR 分工

• The concept and implementation of division of labour has

been observed in ancient Sumerian culture,
where assignment of jobs in some cities coincided with an
increase in trade and economic interdependence.

• Adam Smith developed his ideas about the division of

labour in the 1760s and 1770 as he was giving lectures and
writing the Wealth of Nations (1776)
DIVISION OF LABOUR
• There is a factory helping clients to assemble the red
envelope (with money inside)

• There are the steps required to complete the task

• Step 1: preparing the paper notes (by cutting them from
the money mold)
• Step 2: putting the paper notes to the red envelope
• Step 3: seal the red envelope and stack them properly
DIVISION OF LABOUR
• There are the setups for the factory:
workstation 2:
workstation 1:
putting up the money to
the paper notes
red envelope

workstation 3:
sealing and stacking
the envelope
DIVISION OF LABOUR
• The factory hires two teams to do the task:
• Team A decides to do the task individually

• Here are the rules for Team A:

• Each individual labour can only do the specific task on the
right workstation
• When one labour is working on specific workstation,
others arriving that workstation must wait until the she
finishes
• Penalty will be given if labour violates the rules (teachers
would be the rule enforcers)
• You have 5 mins to do the task
DIVISION OF LABOUR
• The factory hires two teams to do the task:
• Team B decides to use division of labour

• There are the rules for Team B:

• Each labour will stay in the specific workstation to do the
task repeatedly
• Each labour can pass the materials to the other
workstations
• Penalty will be given if labour violates the rules (teachers
would be the rule enforcers)
• You have 5 mins to do the task
DIVISION OF LABOUR –
TO WORKERS
• Advantages
– Practice make perfect : better skills and higher
productivity with consistant repetition
– Get higher pay & job satisfaction
• Disadvantages
– Boredom: Repetitive ➔ Job dissatisfaction & Low
motivation
– Health implication ➔ joint wear
– Little skill required ➔ Unemployment
DIVISION OF LABOUR –
TO FIRMS
• Advantages
– Increased efficiency ➔ fewer mistakes
– Greater use of machinery and specially designed
equipment is developed
– Reduce production time ➔ not wasting time to shift
from one station to another
– Easier organisation of production
• Enables a more systematic flow of the production
process
DIVISION OF LABOUR -
TO FIRMS
• Disadvantages
– Poor quality of work & high rate of absence
– High turnover: decrease in motivation and job
satisfaction ➔↓quality ➔ ↓productivity ➔↓Profit
– Problems arising from interdependence
➔one stage broken down ➔ work cannot pass to the
other stage ➔ a total break down of production
– Loss of flexibility at workplace
• No replacement for a specialised job if someone is
absent
CHARACTERISTICS OF
LABOUR (SUPP)
• Difficult to manage
– People have complex needs
– Inconsistency in work quality compared with machines
• Increase in labour supply
– Due to the increase in world population
• An expensive resource
– Employers are entitled to give holidays and benefits to
employees
 SPECIALISATION
• Production of a limited range of goods by individuals,
firms, regions or countries.
SPECIALISATION
• Firms
– E.g. clothing store, cosmetics store

• Departments
– E.g. human resources, marketing, finance

• Individuals
– Each worker is allocated (specialised in) a specific task
– Division of labour (allows people to concentrate on a
specific task or skill they work the best)
SPECIALISATION
• Countries
– E.g. coffee in Brazil, cars in Japan, textiles in India

• Regions
– Regional specialisation (within the same country)
– E.g. Gaming in Macau, Finance in Hong Kong, Textile in
Suzhou
 LAND
1. Fertilisers and Pesticides
• Criticism
– Harm people wildlife and environment
– Strict control on sale and use

2. Drainage (引流)

3. Irrigation
LAND
4. Reclamation (填海)

5. Genetically Modified Crops

• Criticism:
– Imprecise and unpredictable
– Health risks (Eg: Allergies)
LABOUR
1. Education and Training
– Improve existing skills
– Acquire new skills
➔ increase productivity & flexibility

How?
– Provide more equipment for schools
– Improve quality of teaching
– Provide vocational training
– Firms can provide their own training
 LABOUR
2. Improve motivation of workers
– Financial incentive (piece rates)
– Job rotation
• Change employees’ work from time to time
• Less bored and more motivated
– Team working
• Organise workers into small groups
• Motivation improved by “team spirit”
LABOUR
3. Improve the working practices
• Changing Factory Layout
– Repositioning work station
– Reorganising the flow of production
LABOUR
4. Migration
– Attract skilled workers from other countries
– Attract untrained migrant childminder
➔ Release a highly skilled parent for work
LABOUR (SUPPLEMENTARY)
5. Empowerment
– Give workers power to make decisions
– Raise self confidence
– Feel they are important

6. Adopting lean production

– Reducing waste
– Increase efficiency
– Workers can learn variety of new working
practices
CAPITAL & PRODUCTIVITY
• New technology can improve productivity
– More efficient than existing one
PRIMARY SECTOR
• In agriculture
– Use of machinery
• Tractors
• Irrigation system
• Increase output, reduce waste and improve
working condition
 SECONDARY SECTOR
• Robots
– Handle repetitive work
– Reduce the need for labour in boring and demotivating
jobs
• Computer numerically controlled (CNC) machines
– Cutting, pressing, moulding, sewing and welding
 TERTIARY SECTOR
• Retailing
– Internet shopping
– Unstaffed checkout systems
• Health Care
– New vaccines and drugs ➔ Diseases cured
TERTIARY SECTOR (SUPP)
• Financial services
– Online banking transactions
– Matching customers needs with analysis of computer
programme