Division of Labor, crises of

Knots On this point, economists and anthropologist agree: we divide labor to specialize, and when we specialize, good things happen.  For the economist, the division of labor creates wealth.  For the anthropologist, it creates society. 

The anthropologist studies the hunter and gatherer where the division of labor is rudimentary.  Roughly: men hunt and women gather.  Otherwise, labor is not much differentiated.  Durkheim called this mechanical solidarity: a condition in which everyone knows and does pretty much what everyone else knows and does. 

It is precisely when labor is divided more finally that more complicated social worlds begin to emerge.  With the division of labor comes the accumulation of value, differentiation of social groups, distinctions of status, emergence of hierarchies, and the multiplication of difference.  Now each person, group or class does not necessary share what it knows and does.  People and groups become relatively mysterious to one another.  (I sometimes wonder if our use of the term mystery owes anything to the fact medieval guilds were so called.  Probably not.)

The economist picks up the story well down the evolutionary path where we find the division of labor becoming ever more intense. By doing a smaller part of a larger process, each worker becomes more efficient, more productive, and eventually more prosperous.  In Adam Smith’s famous example, the man who insists on making a pin by his own solitary effort will likely make no more than one pin a day.  Those who consent to take up one of the 18 tasks necessary to make a pin can participate in the manufacture of 48,000 pins a day. 

The contemporary corporation has an ambiguous relation to the division of labor.  It wouldn’t likely exist unless labor were well divided.  But it is often tempted to see how much of the division of labor can be contained within its walls.  Every so often, people  like Hamel and Prahalad must remind the corporation about its "core competences." The corporation downsizes, (and then of course secretly begins to sneak in competencies so that the cycle will have to repeat itself).

So much for the preliminaries.  Here’s what’s bugging me.  The division of labor is one of the ways the corporation makes itself more intelligent, opportunistic, and successful.  But this is not indefinitely true. With every additional division of labor, the corporation must become better at communicating between laborers.  In the 20th century, this was a difficult problem but not an intractable one.  Business theorists and business schools improved our ability to signal successfully across the corporate system. It was possible (often only just) for marketers, designers, operations, human relations, senior management, the street, the lab, the agency, and the consumer to stay in touch.   

Whatever its difficulties, the idea of divided labor was above reproach.  Yes, we could see it had costs.   Many of the corporation’s best ideas died in committee.  Response times were slowed.  Process overwhelmed objective.  (This is one of the reasons that we had to be urged to "manage by objectives.")  But by and large, the division of labor was seen to be worth it. 

The first inkling that we would have to rethink this equation came perhaps in the 1990s.  There emerged a world the corporation had never seen before.  An entire industry came up in about 5 years.  We are now accustomed by this rate of change.  We yawned by YouTube went from nothing to $1.6 billion of value in no time at all.  But in those days, this was troubling data.  It was not as if we had no prior warning.  It’s just that we were actually now going to have to heed these  warnings.  The advice of gurus like McLuhan and Toffler was no longer merely "fun reading" filled with "whacky propositions."  It was now installing itself as a formidable reality.

One of the things that began to dawn on us is that the corporation might now be living in a world in which it was no longer able to communicate successfully across its many divisions.  Darn it!  For the first time in its career, the corporation was having to contend with the fact that more division of labor might actually diminish the efficiency of the corporation.  Thus came the call for flatter organizations.  Horizontal differences were being removed from the organization.  Thus came the call for leaner organizations.  Vertical ones were being removed as well. 

That was the idea anyhow. The reality was something else again.  Many corporations found themselves badly gummed up.  The private sector was now beginning to look like the public sector, a place full of lumbering inefficiencies, people who didn’t quite get it, communications knots and lacuna that preventing the accustomed, the necessary swiftness of the corporation.

The corporation’s new inefficiency was complicated by diaspora of talent, a virtual Pakistan in the making, where certain people began to abandon the corporation for consulting, and those who remained where often tortured by the new regime of inefficiency.  The latte hadn’t signed up for this.  Many had joined the corporation to add exoskeletal powers to their own.  Now, they might as well be the captives of a Museum where everything grinds fine and slow, when they ground at all.

What do we do?  One thing we can do is to begin rethinking the hallowed notion of a division of labor.


Durkheim, Emile. 1893.  The Division of Labor in Society.  New York: The Free Press. 

Hamel, Gary and C.K. Prahalad. 1990. The Core Competence of the Corporation. Harvard Business Review. 68. 3. May-June. pp. 79-93.

Smith, Adam.  1776.  An Inquiry and Causes of the Wealth of Nations.  Volume 1, Book 1, Chapter 1, Section 4.  See the Liberty Fund edition on line here.


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5 thoughts on “Division of Labor, crises of”

  1. Those interested in the fundamental limitations inherent in division of labor should take a look at “The Mythical Man Month” by Frederick P. Brooks Jr. The book highlights the fallacy of throwing people and man-hours/months at a project to accelerate it and offers some interesting perspective on how to address the problem at its root. The book focuses on software engineering, as this is the field where the author made the observations leading to the book, but its discussion in the abstract is relevant to any enterprise.

  2. maybe we are coming back full circle to pre-modern times where the skills of one hand is valued over the skills of many.

    you wrote about wholefoods here. i live in spain and i know quite some people who are in the business of artisan wine or olives oil. and now there is simply no limit to what people are willing to pay for a bottle with that extra bit of a more daring cultural experience.

    as result of the global economy it looks as if the middle classes will be eroded and that the rich are getting richer in economical wealth and are gaining a big appetite for the real and sometimes also simple things in life. … a real wonderful apple, that true olives oil, nice hand crafted boots in this special rural tradition… at the moment it almost looks like the world does not hold enough real (=royal) treasures to cater to the demand. … but luckily designers, architects, artists and my friends on their precious little vineyards are working on that.

  3. The difficulty that corporations have in keeping up with the gales of creative destruction is not division of labor. Did the hot shots who invented the web browser, cell phones, etc. generate their own electricity, refine their own gasoline, or build their own buildings? Of course not. Division of labor is very much alive and growing.

    The problem corporations have with innovation is long term relationships. A corporation is a maze of long term contracts. Innovation requires bringing together a different set of people than made the old thing, now out of date. The new group is made up of specialists just as much as the stodgy old corporation, just a different set of people with different specialities.

  4. Dan makes a good point. In addition, the set of beliefs and practices that make a firm efficient and effective at its routine activities may inhibit innovation. There’s some research by Deborah Dougherty that suggests that in many organizations innovation is countercultural, i.e. the steps necessary to accomplish innovation are perceived by most organization members as illegitimate.

    There are two problems with supposing that innovation requires breaking down the division of labor. First, the division of labor and the division of knowledge are not the same thing. An architect and a contractor may have fixed tasks, but some architects know a lot about construction and others don’t. When trying to build an innovative structure, it may be that the architect needs to have more overlap with the contractor’s knowledge set (that is, to be less knowledge specialized), but he still performs the same task.

    Second, in terms of the division of knowledge itself, much of the time it doesn’t pay to despecialize people. If the contractor has enough specialized skill, then she can handle what the architect throws at her even if the architect is pretty ignorant of her problems. So when a challenging building innovation problem comes along, the team is faced with a choice between a) having the contractor spend her time explaining construction problems to the architect or b) spend her time learning about new construction methods, so she doesn’t have those problems. Since it’s usually easier to learn within one’s specialty than across specialties (that’s why they’re specialties!), the cross-functional learning plan will usually be inferior. It’s only in special cases where it turns out to be sensible to invest in cross-functional knowledge sharing, and those are precisely the cases where management is really important.

    There’s a formal discussion of all this in my 2002 paper in Organization Science on “Islands of Shared Knowledge” (for all the masochists out there).

  5. and, in turn, steve makes a good point.

    Although it may seem overly broad to broach—
    New Media has had a incalculable impact on the shape of corporations– creating a workplace that’s looking more and more like a blown-up version of Creative Commons. And, as this mode trickles down to the individual worker, he finds himself caught in a crossfire of (as Steve mentions) “not being paid to despecialize” but also having an infinite knowledge-sharing world at his fingertips.

    It’s the “wiki-effect” to a degree: as in, “my company needs me to hone in, but my tools (and online environment) are telling me otherwise.”

    As our online environment seeps more and more into “First Life,” (in a strange reversal of the birth of the web) only then might we see some real dead-end battles between what corporations want employees to do… and the tools they’re asking them to use to perform them.

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