Specialization:

• Specialization is the process of defining a set of subclasses of an entity type; this entity type is called the superclass of the specialization.
• This set of subclasses is defined on the basis of some distinguishing characteristic of the entities in the superclass.
• For example, the set of subclasses {SECRETARY, ENGINEER, TECHNICIAN} is a specialization of the superclass EMPLOYEE that distinguishes among employee entities based on the job type of each employee entity.
• It is possible to have several specializations of the same entity type based on different distinguishing characteristics. For example, another specialization of the EMPLOYEE entity type may yield the set of subclasses {SALARIED_EMPLOYEE, HOURLY_EMPLOYEE}; this specialization distinguishes among employees based on the method of pay.

Generalization:

• Generalization is a reverse process of abstraction in which differences among several entity types are suppressed i.e. common features are identified and generalized into a single superclass.
• For example, consider the entity types CAR and TRUCK, they have common attributes like model number, manufacturer name, etc. and can be generalized into the entity type VEHICLE.
• The generalization process can be viewed as being functionally the inverse of the specialization process