Commerce

Factors necessary for division of labour

len Alfred Ajibola - Wed, 05th February, 2020 @ 12:43 PM

Topics in Commerce

Types of specialization Specialization and Exchange Historical background of commerce in Nigeria Disadvantages of barter system Contract of Employment: Terms of employment contract Principle of Marketing: People as a marketing mix and their importance Principle of Marketing: Positioning as a marketing mix Principle of Marketing: Packaging as a marketing mix Elements of promotion in marketing mix Principle of Marketing: Promotion as a marketing mix Principle of Marketing: Place as a marketing mix Principle of Marketing: Price as a marketing mix Principles of Marketing: The seven principles of marketing mix Factors necessary for division of labour Disadvantages of division of labour Advantages of division of labour Concept of Outbound Marketing Inbound Marketing explained Types of production in commerce Commerce: Definitions and Scopes of Commerce


Academic Questions in Commerce

Please click here to see all Questions and Answers

In commerce, the concept of paying in advanced is termed _____.

  • A. Advanced payment

  • B. Up payment

  • C. Forward payment

  • D. Prepayment

  • E. Uphill payment

  • F. Adpayment

In commerce, the concept of 'buy now, pay later' is termed _____.

  • A. Unadventurous payment

  • B. Buy on credit payment

  • C. Deferred payment

  • D. Postponed payment

  • E. Owed payment

  • F. Future payment

In commerce, which of the following is false with regards to a commodity?

  • A. A commodity must always have a market value

  • B. Rendered services are also instances of commodities

  • C. Products applicable to commodities can be bought or sold with money

  • D. A commodity must be standardized

  • E. A commodity must be usable upon delivery

  • F. Commodities can be traded in the futures market

Whatever is being marketed must always provide value to its potential consumers.

  • A. True

  • B. False

Which of the following is not a branch of marketing?

  • A. Merchandising

  • B. Promotions

  • C. Forex

  • D. Search Media Optimization

  • E. Social Media Optimization

  • F. Copywriting

Which of the following is not a characteristics of commerce?

  • A. The only aim of commerce is to make profit

  • B. It is a discontinuous process after profit had been made

  • C. It is accompanied with challenges and uncertainties

  • D. It is 100% business and economic activity

  • E. Transaction processes are always involved in commerce

  • F. It connects the process of production and marketing

Which of the following is not a function of commerce?

  • A. Unnecessary in times of emergencies like earthquakes and wars

  • B. Facilitates mass production of goods

  • C. Influences transportation network within and outside a state

  • D. Attempts to satisfy human needs and wants

  • E. Improves the standard of living

  • F. Acts as an online business link between buyers and sellers

One of the following is a form of division of labour.

  • A. Agonistic division of labour
  • B. Antagonistic division of labour
  • C. Mutualistic division of Labour
  • D. Advanced division of labour
  • E. Solitary division of labour
  • F. Occupational division of labour



Factors required for division of labour:

Division of labour is defined as the act splitting a goal into a number of different processes such that each process is done by a different person or group of persons.

Please read on the concept of division of labour here.

You can read on the advantages of division of labour here.


For a factory or company to effectively carry out division of labour, certain conditions must be met. Below are some of the needed conditions required for division of labour:


1. Presence of a big market

A large pool of economists are of the opinion that division of labour will thrive where there is a big market for manufactured products.

Please read on the concept of market in economics here.

When the market for a product is small, a producer will make little sales or profit on such product. The producer will also find it difficult to pay other people to work for him.

Conversely, a large factory will embark on division of labour if there is a large market to sell their variety of products.

Please read on production here.

 

2. Nature of the job

Division of labour is necessary for some jobs while it remains unrealistic for other jobs.

Consider the instance below:

  • A taxi driver will find it difficult to embark on division of labour while a water production company will likely require division of labour to achieve its business purposes.

Please read on the elements of management here.

 

3. Availability of capital

An entrepreneur with little capital will find it difficult to embark on division of labour while another with a huge capital will likely embrace division of labour since there is enough money to pay the workers.

Please read on the concept and types of cost here.

Also, availability of capital will influence the purchase of machineries for production. Meanwhile, understand that division of labour is associated with the use of machines or technology in most cases.

 

4. Increased returns from sales

Producers who makes a good amount of money from the sale of their products will likely support the possibility of division of labour. This is true because producers will always further the production of their product to a larger scale when the opportunity arises. This is a concept of the law of supply.

Please read on supply, law of supply and supply curve here.

Producers who also make good returns from the sale of their products may also choose to expand their business by establishing it in other locations.

You can read on advertising here.

 

5. Availability of labour

There can only be division of labour where labour is available. Think of labour as those who are hired to work for a factory or company.

  • Recall that labour is one the factors of production and may require the use machines and technology to carry out their specific function.

The scarcity of labour will lead to scarcity of division of labour even when there is availability of capital.

Please read on the forms of division of labour here.

 

6. Organizational ability

An entrepreneur who lacks the skills and ability necessary to organize production on a large scale may find it difficult to manage and direct the workers, especially towards their fields of expertise. As a result, such entrepreneur may not be able to employ suitable persons to work in their organization.

Please read more on management and its importance here.

 

7. Definition of job processes

When a staff or hired labour does not understand the specific job they are meant to perform, division of labour may not scale well. Such staff perform other duties outside their job specification.

Please read on business and its characteristics here.

 

8. Development of the transport system

Division of labour will flourish in a society where a good transport system is present.

A good transport system is a requirement for having a large market. Consequently, a large market will encourage division of labour.

Please read more on transportation here.

Meanwhile, always understand that drivers who transport products for marketing are also a part of the team that makes up division of labour.

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Amazing facts in Commerce

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Notable points in Commerce

The theory of international trade is guided by the principle of comparative cost. This principle was propounded by David Richards.

The principle of comparative cost states that a country should specialize in the production of goods and services in which they have a greater comparative advantage or the least comparative disadvantage.

Below is an instance on the principle of comparative cost.

Now, let us assume we have two countries producing and exporting rice and beans respectively.

  • On a daily basis, If country A produces 100 grams of rice and 300 grams of beans daily and country B produces 50 grams of rice and 150 grams of beans, then according to this principle, country A has an advantage over country B with regards rice and beans production; but better still, country A has a greater comparative advantage in the production of beans.

 

From the above instance, it can also be said that country B is at a disadvantage with regards to the production of rice and beans. Infact, it has a bigger comparative disadvantage with regards to beans production.

The point to note here is this: A country utilizing the principle of comparative cost will always produce quality goods and services at a cheaper cost.

No single country manufactures all the goods and services in our world. This implies that every country of the world relies on certain goods and services imported (or brought in) from other countries.

Foreign trade is defined as the exchange of goods, services and capital between two or more countries.

Foreign trade is also termed as international trade.

Please read more on foreign trade here

Division of labour can be defined as the act of splitting job process into a number of different processes such that each process is done by a different person or group of persons.

Through the process of division of labour, one worker may constantly perform a specific aspect of the job and as a result, may become specialized in that area.

The result of specialization in the different department of a job will imply the production of goods with better quality.

Please read on division of labour here

Forms of division of labour relates the various ways through which division of labour may be carried out.

Take for instance, within a country, one state may choose to specialize in the production of a cars while another specializes in a different area, let's say agriculture.

Below are the forms of division of labour

  • Complex division of labour

  • Occupational division of labour

  • Geographical division of labour

 

Please read more on the forms of division of labour here.

Balance of Trade can be defined as the total value of goods imported and exported by a country during a specific period; usually yearly or annually.

Balance of trade can be either positive, negative or zero

  • A positive balance of trade implies that a country exports more goods than its imports. China as a country is likely to have a positive balance of trade since it exports a variety of goods to other countries.

  • A negative balance of trade is often considered as an unfavorable balance of trade since the country's importation exceeds its exportation. Nigeria (as at 2018) is likely to have a negative balance of trade.

  • A zero balance of trade is reached when imports equal exports.

Please read on balance of trade and balance of payments here.