Principles for implementation of a cost leadership strategy
Division This principle is the well-known idea that specialization of labor leads to less waste, faster production, and an increased ease of teaching the job.
Fayol noted that division of work reduces the number of objects to which attention effort be directed and has been recognized and as the most efficient means of accomplishing"
The worker on the same part, the manager concerned always with the same matter, acquire an ability, sureness, and accuracy which increase their output" (Fayol, 1949, p. 200.
According to Porter(1980, 1985), one of the principal sources of cost advantage of firms is economies of scale.
And, these economies of scale can be achieved, in part, by specialization of labor(Smith and Skinner, 1999).
Fayol's principle of division of work is particularly important in this respect.
Mass production involves breaking down the production process into a series of separate tasks to be performed by specialized workers.
Specialization of labor avoids time lost from switching activities and assists in mechanization and automation of operations.