Running head: DIVISION OF LABOR1 Division of Labor Institution affiliation Date
DIVISION OF LABOR2 Effects of the division of labor Gives rise to Market Institutions According to Adam Smiths (1937), the division of labor creates a job market system and broadened it. The exchange relationship relentlessly pushes open the border and expands effective cooperation. He argued that division of labor is a promising doctrine, and regardless of the gift of natural resources, almost all countries can thrive through the development of professional fields endorsed with specialization (Smith, 1937). The division of labor is enough to create the beginning of trade opportunities and prosperity. On the other hand, in countries that reject specialization and adhere to the concepts of independence and economic self-sufficiency, merchants identify them and their population as unnecessary poverty. It gives constant pressure to organizations improve and expand the quantity of operations, and mechanize them through the use of accessible capital and tools, as well as inflates the size of the market served, accordingly reducing the cost of production; "the Division of Labor is Limited by the Extent of the Market"(37). This will intern put pressure on the existing marketing and processes giving rise to market institutions. With the development of society, the various markets of each commodity or service are interconnected. Division of labor is the scope of the market, and the engine of market expansion there is an urgent need to free the poor from the hard work of extremely low income (Smith, 1937). Job specialization Smith believes that growth arises from amplification in the division of labor, which leads to job specialization increasing productivity. This idea is mainly related to the specialization of the labor force, which essentially breaks down the large work into several smaller units. Under
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