Diseconomies of Scale

The causes and the solutions as well as a definition 

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  • Created by: TessAni
  • Created on: 18-01-13 12:06
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  • Diseconomies of Scale
    • Causes
      • Communication -  extra costs may be incurred in making managers aware of what is going on
      • Problems of coordination - layers of management and several tiers of decision making can hinder change
      • Problems of industrial relations - firms increase in scale and workers feel alienated lowering productivity
    • Avoidance
      • Development in Human Resources in order to avoid some of the causes of diseconomiesof scale
      • Performance related pay schemes provide financial incentives
      • Out-sourcing  (reducing costs but maintaining control)
    • Causes of an increase in long run average costs beyond the point of minimum efficient scale




A concise mind map which goes through the main points on the causes of and methods of avoiding diseconomies of scale.



What about internal/external?

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