Division of labour – Employees are organised so that they specialise in one part of the production process
- Specialisation is when each worker is given a specific task in the production process.
- It makes individual workers more productive as they improve at the task they are given and are able to excel at this task.
- Output increases due to higher worker productivity which causes the firms costs to lower and then they can offer lower prices to customers.
- Then they can either reinvest and expand the branches or pay higher dividends to shareholders.