Diseconomies of scale

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  • Diseconomies of Scale
    • Communication: Larger the firm the more levels of communication
      • Slower decision making
      • Decreased efficency
      • Incresed costs
      • Workers can feel isolated ( far removed from organisational goals)
    • MOTIVATION
      • Poor relations between management and workforce
      • Workers feel alienated
      • lack of motivation
      • Decreased productivity
      • Incresed absenteeism/ labour turnover and costs
    • TECHNICAL:
      • If part of the system breaks down the production process stops
      • increased overheads may result from the need to sustain complex systems to aid co-ordination and control

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