-Lack of motivation
-Poor communication
-Co-ordination
1 of 11
Why is lack of motivation a diseconomy of scale ?
In larger firms, workers can feel that they aren't appreciated/valued as individuals
-Can lead to productivity falling=inefficiencies
2 of 11
Why is poor communication a diseconomy of scale?
Likely to be a greater use of written notes rather than face-to-face explanation
-Messages can be unread/misunderstood(staff not informed properly)
3 of 11
What are three examples of external economies of scale?
Transportation/Public parks/University facilities
4 of 11
What are 5 effects of diseconomies of scale?
-Productive inefficiency
-Overtrading
-Reduction on profits
-Lost competitiveness
-Charger higher prices to cover costs
5 of 11
What is productive inefficiency?
Production of additional goods/services will lead to an increase in average cost of production
(more wastage/higher labour costs)
6 of 11
What is overtrading ?
When a firm engages in more business than can be supported by the funds/resources available
(can't fulfil orders)
7 of 11
What is lost competitiveness?
Firms will no longer be able to compete on cost advantage as they're experiencing higher costs
(have to pass onto consumers higher price)
8 of 11
State 6 examples of issues relating to investment/productivity /implications of growth for a business?
-Finance (not enough capital)
-Technology (not have up to date tech)
-Attitude to risk (manager who avoids risk)
-Customer loyalty/satisfaction (New equipment
will improve quality)
-Staffing (not skilled enough employees)
-Innovation (May lack innovation
9 of 11
3 advantages of growth?
-Benefit from economies of scale
-More control/power in market(MONOPOLY POWER)
-Increased output/production
10 of 11
3 disadvantages of growth?
-Diseconomies of scale
-Poor communication
-Difficult to coordinate
11 of 11
Other cards in this set
Card 2
Front
Why is lack of motivation a diseconomy of scale ?
Back
In larger firms, workers can feel that they aren't appreciated/valued as individuals
-Can lead to productivity falling=inefficiencies
Card 3
Front
Why is poor communication a diseconomy of scale?
Back
Card 4
Front
What are three examples of external economies of scale?
Comments
No comments have yet been made