Business Managment 2
Storyboard Text
- 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.
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