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Specialization in business entities

  

Date Posted: 4/12/2012 7:42:28 AM

Posted By: sashoo  Membership Level: Silver  Total Points: 382


SPECIALIZATION

Specialization refers to a situation where an individual or a firm undertakes an activity in which it can perform better than the other. This can also mean undertaking an activity in which one is talented in or that which they can be able to perform at minimal cost.

ADVANTAGES OF SPECIALIZATION

• It results in greater skill e.g. a mechanic is a specialist in the field, and he knows his work well; the more times he repeats his work every day, the more knowledge he acquires to perform his duties.

• It saves time. This simply means that a specialist is able to perform his work faster than a non-specialist hence more time is saved to do other duties.

• It encourages invention and innovation. Due to specialization, where people concentrate on one activity, they are able to invent more and better methods of performing a given activity.

• Less fatigue is experienced in specialization. This is so because one is used to doing the same type of job on a daily basis. Hence, the fatigue that is usually associated with learning a new skill for the first time is always done away with.

• Specialization in most cases is associated with mechanization i.e. use of modern machines and equipment. Therefore, a specialist will encounter less physical and mental strain when performing his activities. This is so because the machines and equipment simply ease the work and process of the specialist.

• People are free to choose work or activity they like. One chooses an area he or she is talented in.

• The specialist uses the same set of tools every day. This means that the capital equipment or tools will be used maximally before they become obsolete i.e. specialization leads to efficient use of machines and equipment.

• It enhances the process of exchange i.e. specialization leads

to increased exchange of goods and services.

• It leads to mass output i.e. a specialist will produce more goods and services than a non-specialist.

• It facilitates production of high quality goods and services.

DISADVANTAGES OF SPECIALIZATION

• Monotony:
This is a situation where the employee finds the work boring because of doing it every day.

• Stoppage:
Unexpected stoppage of some units in a production process due to absenteeism of employees is usually evident. This leads to a stand-still of production activities.

• It leads to decline of craftsmanship. This is so because people are highly skilled at a particular unit in a production process, but extremely know little of the entire range of activities in the entire production process.

• It sometimes causes unemployment e.g. a lawyer cannot perform other activities apart from legal services. Thus, if the field of legal service is flooded, he or she may not be employed to do other duties.

• It can cause industrial unrest and social discontent. This is seen when there is a high percentage of specialization in a given country i.e. when most companies mechanize their activities, there is fear of the existing labor force to become redundant.

• It is sometimes difficult to divide technical processes into small divisions or units performed by different specialists. This is so because it is hard for a person who has come in the middle of the system to address the primary problem of the entire process.

• When the value of money depreciates the production of mass output, through specialization, becomes more risky to a business. This is so because business will experience little revenue due to the decline in the value of money.

• Lack of pride and satisfaction e.g. since an employee in a clothing factory attends to only one unit in the production of a dress, he or she cannot say that he is the only person who facilitated the production of the dress.

• Specialization is not suitable for small and medium organizations. This is so because they have small markets or fewer customers for their goods and services.



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