Diseconomies of Scale

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  • Diseconomies of Scale
    • Coordination
      • too many rules are in place to be checked.
      • managers are in charge of more people meaning less control.
      • increase workload for all but the lowest level of the heirachy.
    • Communication
      • too many levels in the heirachy, and the span of control becomes too high.
      • meetings are difficult to plan.
    • Motivation
      • employees feel less valued
      • staff become demotivated
      • more time is wasted with absences.
    • Definition
      • The company has become so large that poeple are no longer considered as a person, but as a number.

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