Global Division of Labour

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GLOBAL DIVISION OF LABOUR

Aim

The aim of the following essay is to define and explain the subject of Global Division of Labour. This definition will be analysed to assess the positive and negative impacts of global division of labour on various parties involved in the process, across different continents and economies. A practical example of a furniture manufacturing business in Italy will be discussed. The unique African situation will be raised as well. The analysis and discussion of the social issues surrounding the use of this system, which largely depends on inequality, will draw certain conclusions. The conclusion will show that this is a subject that has challenges and implications for disciplines in society including; social policy makers, labourers and financiers. It will be shown that this process also has an impact on secondary markets.

Definition and explanation

In simple terms “Global Division of Labour “ is the process of dividing the job function, from production to point of sale, between different countries, for the purpose of producing items at the lowest cost and thus maximizing profit. The idea behind it is to shift production from developed countries to undeveloped countries, where the cost of labour is cheaper. Larger corporations are able spend significant sums of money training and developing a labour pool in those cheap regions. Such pools in various geographical locations will be established to avoid regional disturbances that could disrupt their supply. They will often build labour pools closer to their raw materials and production facilities in order to keep all the elements of the production process in one place thus cutting transport costs. Often value added services applied to semi-finished products will happen in another geographical locations. This is all in the name of cost reduction. All these financial decisions have many social implications.

The economic effect of this is that the output of developed...
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