Question

As firms grow, should they have division of labor and add staff positions? Give examples with your answer.

Answer 1

yes.

As the firm grows its each and every aspect expand like sales, purchase, client base, marketing, books of accounts and other. so the staff and labor should be allocated with specific positions and duty. which will increase his/her focus in that specified field.it will directly improve the working and responsibility of the staff. they will give specific focus in a particular area which will increase his working skills and expertise in that specified area which reduce the time requirements for that particular job/work because of economies of scale concept, it also improves the accountability and decision making form management point of view.

Suppose a firm start a business of selling goods directly to households in a small area of 5 km. but after few years of growth, its business expand to 40 km area. then it should expand his staff team and make them divide them into various groups. one division for delivery, one division take care of purchase, one division will take order and cash, one division will prepare goods as per order. this division will directly improve the working efficacy of worker. which will increase accountability, responsibility, economies of scale and management controls on the workforce.