<P> In general, in capitalist economies, such things are not decided consciously . Different people try different things, and that which is most effective cost-wise (produces the most and best output with the least input) will generally be adopted . Often techniques that work in one place or time do not work as well in another . This does not present a problem, as the only requirement of a capitalist system is that you turn a profit . </P> <P> Adam Smith famously said in The Wealth of Nations that the division of labour is limited by the extent of the market . This is because it is by exchange that each person can be specialised in their work and yet still have access to a wide range of goods and services . Hence, reductions in barriers to exchange lead to increases in the division of labour and so help to drive economic growth . Limitations to the division of labour have also been related to coordination and transportation costs . </P> <P> There can be motivational advantages to a reduced division of labour (which has been termed' job enlargement' and' job enrichment'). Jobs that are too specialised in a narrow range of tasks are said to result in demotivation due to boredom and alienation . Hence, a Taylorist approach to work design contributed to worsened industrial relations . </P> <P> There are also limitations to the division of labour (and the division of work) that result from work - flow variations and uncertainties . These help to explain issues in modern work organization, such as task consolidations in business process reengineering and the use of multi-skilled work teams . For instance, one stage of a production process may temporarily work at a slower pace, forcing other stages to slow down . One answer to this is to make some portion of resources mobile between stages, so that those resources must be capable of undertaking a wider range of tasks . Another is to consolidate tasks so that they are undertaken one after another by the same workers and other resources . Stocks between stages can also help to reduce the problem to some extent but are costly and can hamper quality control . Note also that modern flexible manufacturing systems require both flexible machines and flexible workers . </P>

Explain how and why individuals and businesses specialize including division of labor