The most important problem, which an organizer has to solve, is three.

• The problem of division of labour inclusion the localization of industry.
• The problem of the scale of production
• The problem of the legal organization of the business concern.

Division of labor: Division of labor is an important characteristic of modern production.

“ When making of an article is split up intro several processes and each process is entrusted to a separate set of workers, it is called division of labour”

The division of labour is of the following main types.

• Division in occupation and professions: In this type, workers are divided into various groups according to the occupation or profession.

• Division into complete processes: In this type, labour was the breaking up of each occupation into a number of complete processes involved in the preparation of an article and the sub division of the labour into the corresponding no: of groups. The product of the one group of the labour is only a semi manufactured article which is passed on to the other group for the next operation, and so on till it takes the final shape For example, Shoe Company is divided into 80 different processes.

• Division into incomplete process: With the introduction of machinery and factory system and with multiplication of wants, division of labour is pushed still further. Each process is now divided into various incomplete processes.( semi manufactured or finished product).

• Territorial division of labour: The division of labour into sub-process is associated with the localization of particular industries and callings in certain regions. Industries tend to localize in a particular place or region mainly due to some favorable geographical, geological, climatic, economic or particular condition found there. The localization of industry is a form of division of labour and is called territorial division of labour.

Advantage of division of labour

Division of the labour results in an increase in the productive capacity. The increase in productive power is about due to the following factors.

• Gain in adaptation: The great advantage of division of labour is that it makes possible the division of the labor’s into various groups according to their level of intelligence, physical strength, and natural bent of mind, and the allocation to each of them of the task they are best fitted for.

• Gain in skill: Another advantage is that it requires the labor’s to move his muscles, brain and eyes in one particular manner all the time he work; consequently. His limbs become automatic, quick and precise. The skill of man thus increases through constant practice and specialization. In the absence of division of labour would be a jack of all trades and probably master of none.

• Increase use of machinery: Division of labour thus leads to an extensive use of machinery. Machine increase output, lower cost per unit, diminish the strain on laborers.

• Increase in no: of inventions: Firstly, each work is divided in such minute and simple process that the scope of inversion become large. Secondly, when the laborers work on one machine all the time, he gets the occasion for thinking out the improvements that can be made in that machine.

• Economy of implements and capital: Under the division of labour each laborers is engaged in one operation only and requires few specialized tools, which are constantly used all the time. Implements and machinery thus find full employment. As he processes only few implements he takes proper care of them not likely to lose them.

• Implement in the quality of product: Since the finished product passes through the hands of master craftsman, as specialist in their particular work, its quality is bound to be excellent.

• Reduction in the period of apprenticeship: Division of labour brings about the sub division of production into simple sub-processes and each laborers is require to engage himself only in one sub-process rather than in the entire production. Therefore, he has to learn merely a part of the work and the period of his apprenticeship become short. He saves time and money as a consequence.

• Saving of time: Being engaged only in one operation under division of labour, a laborer is not require to move from one place to other place or put down one tool and take UP ANOTHER. The time which is lost in changing work, place and tool is saved.

• Saving of skill: Since the laborer is given the task, which he is best fitted, his capacity is used to best advantage and his skill is not wasted. He is also relieved of much monotonous and cheap work, which can be performed by women and children and in some cases, even by the crippled and the blind.

• Increase in mobility: When the processes of production are minutely divided and sub divided, they become very simple and similar to each other. It becomes easier for the laborer then to move from one occupation to another. Mobility of labour is thus increased.

• Expansion and diversification of occupation: The invention and use of new machinery open fresh avenues of employment. Employment as a whole increases; and even women and partly disabled person get some work.

• Effect on probation as a whole: The ultimate effect of division of labour on production as a whole is that output improves both in quality and quantity, and is obtained at a reduced cost per unit.

Disadvantage of division of labour.

• Loss of efficiency and responsibility: Specialization narrows down one’s mental out look. A labour is required do and knows about only a part of work, he does not usually know more than that. The range of his usefulness is also reduced. Since the raw material passes through several hands before it is finally finished, no laborer can be made responsible for the excellence of article as whole.

• Loss of interest: When a man manufactures one whole article, he takes pleasure and interest in preparing it. The beauty of article please its maker, being credit to him and gives him satisfaction that his work has brought joy and satisfaction to others. But when he made to work in a factory, in a scheme of mass production where his contribution cannot be located, he losses interest in the job.

• Monotony: A labor that performs the same task all the time he works, begin to feel monotonous. Monotony gives raise to industrial fatigue, mixed wondering and day dreaming which reduce the efficiency of laborer his output.

• Employment of women and children: Division of labor creates the employment for women and children, but very often the task is too arduous and laborious for them and seriously injures their health and hinders their growth. This is a matter of great national concern, weak mothers gives birth to weak children, and weak children turn out to be weak men of tomorrow.

• Loss of mobility: If a work is engaged in doing only one kind of work for some time, he might become unfit for another occupation. The mobility of labour may thus be seriously curtailed.