Good Morning! Today we will be looking at some problems that cause diseconomies of scale.
Woohoo! Those problems are good to know you can avoid many problems in the business.
There are more layers in the hierarchy that can distort a message and wider spans of control for managers. This may result in workers having less clear instructions from management about what they are supposed to do when.
Create the Slow down decision making.
Communication problems
Another is Poorer diseconomies of scale.Senior managers are more likely to become detached from those lower down in the hierarchy, thereby making them feel distanced or out of touch.
YES! Next is DISADVANTAGES OFSPECIALIZATIONWorkers become bored with performingrepetitive tasks. With a larger workforce,there mayalso be scope for slack .
are more?
Another one, Complacency. With being a large and dominant player or eventhe market leader in the industry can also cause many problems.
Complacency ismost likely to reduce productivity thereby raising unit costs of production.
External diseconomies of scaleoccur when an industry growing in size causes negative externalities – andrising long-run average costs.
Alternatively,the competition for scarce resources may push up the cost of rent/labour/ raw materials.