{"id":6580,"date":"2023-03-14T12:28:59","date_gmt":"2023-03-14T12:28:59","guid":{"rendered":"https:\/\/www.cmwlab.com\/blog\/?p=6580"},"modified":"2026-01-06T12:37:30","modified_gmt":"2026-01-06T12:37:30","slug":"how-the-division-of-labor-lowers-productivity","status":"publish","type":"post","link":"https:\/\/www.cmwlab.com\/blog\/how-the-division-of-labor-lowers-productivity\/","title":{"rendered":"How the Division of Labor Lowers Productivity"},"content":{"rendered":"It happens all the time: as soon as we find a solution for a problem, the solution becomes a problem itself. The division of labor is not an exception: it increases the productivity indeed, but it also decreases in other cases.\r\n\r\n\r\n

\r\nThe separation of labor is a clear benefit at first sight: doing something right implies training, expertise and specialization. So one goes to a College or University and becomes a professional in economics, agriculture, mechanical engineering etc.\r\n

\r\nThen he or she graduates, finds a job and becomes \u201cinstalled\u201d to some company and department. And what\u2019s interesting about people is we tend to identify ourselves with a small group at first\u00a0\u2013 in our case it\u2019s department vs. company. We accept the interests of our near colleagues and our department much closer than interests of the company as a whole, letting alone customer\u2019s interests. We are all great professionals for sure, we are able to demonstrate great productivity in our area but it turns out that department\u2019s productivity doesn\u2019t automatically guarantee the end-to-end productivity of the company. Besides, the distance between \u201cwe are able\u201d and \u201cwe do\u201d may be significant.\r\n

\r\nIt wasn\u2019t that crucial at the early days of Adam Smith and later at Frederick Taylor\u2019s because it was mostly about the division of industry workers\u2019 labor. As long as each worker performs a single operation and the sequence of operations is predetermined, coordinating them is an easy job. Just measure the time spent for each operation and calculate the conveyor speed and headcount for the given productivity. This is how the scientific process management was born.\r\n

\r\nProblems arise when we turn away from Adam Smith\u2019s sewing needles and the legendary Ford\u2019s T Model (which could be \u201cpainted any color as long as it is black\u201d) to something more complicated and diverse. The greater the range of finished goods and parts, the greater the range of manufacturing operations \u2013 the more complicated is job coordination. To cope with this problem western businesses rely on computers and develop MRP, MRP-II, ERP, APS algorithms, while the Japanese invent \u201cJust in Time\u201d and \u201cKanban\u201d (a kind of \u201canalogue computer\u201d). One way or another (or rather combining both) the problem can be solved.\r\n

\r\nIt becomes worse when we switch from the shop floor and manufacturing processes to the office and business processes. Factors that add complexity are: multitasking, creativity and cross-functionality.\r\n

\r\nMultitasking means that we switch between tasks many times during the day or even within an hour. Conveyer workers complain about the dullness of their job, yet the office work is another extreme: the more skilled and responsible is an employee the more processes he\/she would be involve into.\r\n

\r\nThere are two possible ways for an employee to react. First, he or she can minimize the amount of switches between tasks. E.g. Finance processes payment orders after 4PM because processing them as soon as they arrive would mean a \u201cproductivity decrease\u201d. This is a classic example of so-called \u201csub optimization\u201d: the performance of Finance clerk would increase while the company\u2019s efficiency from a customer\u2019s perspective will decrease.\r\n

\r\nThe second option is a tricky one: do not let anyone figure out how productive you really are. In many cases, it doesn\u2019t make sense for an employee to do the best: the more you do \u2013 the more load you get from the boss. As for the boss, he\/she is probably a seasoned professional very\u00a0 able to evaluate subordinate\u2019s true performance. But is it in his\/her best interest to get the most from the staff? In so many cases it\u2019s a better strategy for a line manager to ask for extra workforce arguing that the men are overloaded. After all let\u2019s not forget that the more the headcount, the more power and weight within the organization the manager has. Therefore, pressing subordinates would mean not only spending emotions \u00a0and efforts, but also a chance to lose the career race to other managers.\r\n

\r\nNow let\u2019s talk about creativity. It\u2019s relatively easy to measure performance of a manufacturing worker doing routine job and to set up performance targets accordingly. But how would you measure e.g. a software developer\u2019s performance? The number of lines of code is a \u00a0very bad metric indeed, but there is hardly anything better.\u00a0 In fact, this is the case with all knowledge workers: there is no reliable way to measure the result.\r\n

\r\nOver one hundred years ago, a French professor Maximilien Ringelmann discovered the effect later called by his name<\/a>. He performed a set of experiments in which men were pulling a rope alone or in a team. Professor has found out that performance in a team decreases: whereas a single man can pull say 100 kg, a team of two pulls 80 kg each and a team of eight \u2013 only a pitiful 50 kg. If a man is certain that no one can determine that he isn\u2019t doing his best, then he saves his efforts, consciously or not.\r\n

\r\nThe famous Parkinson\u2019s Law says about the same: \u201cwork extends so as to fill the time available for its completion\u201d.\r\n

\r\nDan Ariely explored the problem with a series of experiments at MIT<\/a>. Being a behavioral economist, he demonstrated that the vast majority of people are unable to resist cheating if they are sure that they will not be caught or when their cheating would cause harm or damage only in the distant future.\r\n

\r\nThe rope pullers example shows how even a homogeneous team may become inefficient. Now what should we expect when a coordination of several departments\u2019 efforts is necessary? The problems above would seem nothing compared to cross-functional coordination.\r\n

\r\nEvery time an organization faces a problem that can only be addressed by joint efforts of several departments, the purely hierarchical organization is in deep trouble. A classic example is \u201cdesign to order\u201d business: the company obtains Request to Proposal; doing it right requires committed participation of a)\u00a0sales manager, who communicates with the client, b) an engineer, who designs the product requested, c) Purchasing department which knows from where to buy the parts needed, d) Manufacturing who schedules the production, e) Accounting who calculates costs. A purely hierarchical organization has no chances to do the job in time and with acceptable quality. Because why should Manufacturing obey Sales? Each team has its own chief, budget, performance measures\u2026 What did you say \u2013 customers? Nobody cares.\r\n

\r\nAnd this isn\u2019t the most complicated case yet. At least the sequence of activities is the same from one customer\u2019s request to another. It becomes worse when the sequence is unpredictable: geological research at the construction site, law firm actions in court, patient at the hospital emergency room etc.\r\n

\r\nGetting back to the topic, please note that all these issues result from the separation of labor: a medieval guild master never hit anything like this.\r\n

\r\nWhat we see on the positive side is: humanity could raise a nominal productivity manifold thanks to the division of labor. Yet it also brings fuzzy performance measurements, blurred responsibility and poor coordination that decrease overall performance. The larger the organization, the larger are these negative side effects. The effect is non-linear, so both absolute and relative losses increase. There is a certain scale limit where benefits of the separation of labor are negated by increasing losses so the net productivity doesn\u2019t grow anymore and starts to decrease.\r\n

\r\nHow can this limit be estimated? Let\u2019s define the metric first. Keeping in mind that manufacturing process is easier to manage because there is no multitasking, performance measures are clear and it\u2019s a single department, it looks reasonable to use the \u201cwhite collar\u201d employee headcount as the measure of the organization scale.\r\n

\r\nThis limit depends on a multitude of subjective factors like CEO personality, corporate culture, company age etc. so there is no a single number. Supposedly, the line after crossing which a company should look for the ways to compensate growing negative effects is somewhere between 20 to 100 \u201cwhite collar\u201d employees with a mean of around 50.\r\n

\r\nWhat are the known means \u2013 how the negative effects of pure functional management can be handled \u2013 will be discussed in the following parts. We won\u2019t throw away the division of labor indeed \u2013 we should find the way to compensate the negative effects, yet keep the advantages.<\/em>","protected":false},"excerpt":{"rendered":"

It happens all the time: as soon as we find a solution for a problem, the solution becomes a problem itself. The division of labor is not an exception: it increases the productivity indeed, but it also decreases in other cases.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[376],"tags":[],"class_list":["post-6580","post","type-post","status-publish","format-standard","hentry","category-bpm-com"],"yoast_head":"\nHow the Division of Labor Lowers Productivity — CMW Lab Blog<\/title>\n<meta name=\"description\" content=\"CMW Lab's InsightUncover the hidden pitfalls of division of labor with CMW Lab's insightful blog post. 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