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As the name implies,

Generalization is going general. For example if you have entities like Medical-student, Engineering - student, Architecture - student so on, you can generalize and create an entity called Student (higher level entity) so others will be sub entities (lower level entities) of Student entity. One thing to keep in mind is that, the generalized entity is the union of all the sub entities, in the sense it will contain everything that is in its sub entities. This is Bottom Up approach!

Specialization is about going specifically. For a given entity you create sub entities. For example if Staff entity is there, you create Maintenance staff, IT staff, Executive staff so on. Here the higher level entity (Employee) is given and we create the lower level entities. However unlike in Generalized entity, the higher level entity is NOT union of its lower level entities. Sub entities here will use some things from its higher level entity plus things on its own. This means that there could be things that's in lower level entities but not in higher level entity.

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Q: Difference between specialization and generalization
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