3.3.3 diseconomies of scale

Question 1

Managerial Diseconomies

Answer 1

As firms become very large, the management structure can become overly complex and less efficient. Communication breakdowns and bureaucracy may increase, leading to higher costs.

Question 2

Coordination and Control Problems

Answer 2

arger firms often struggle to maintain effective control and coordination among various departments and divisions, leading to inefficiencies and higher costs.

Question 3

Worker Alienation:

Answer 3

In very large organizations, employees may feel disconnected from the company’s goals and values, which can result in lower productivity and higher turnover rates.

Question 4

Communication Challenges

Answer 4

: With an increase in size, communication becomes more challenging, leading to misunderstandings and errors that can increase costs.