POTENTIAL PROBLEMS OF GROWTH - DEOS Flashcards
What are the potential problems of growth
Diseconomies of scale
Overtrading
bs may be concerened about expanding too much due to
EOS and overtrading
what are diseconomeis of scale
when costs per unit increase as the business increases its size
diseconomies of scale can occur due to
motivation
communication
coordiniation
control
how do you remeber what the DEOS are
3Cs and an m
explain how communication can become more complex as a bs grows
as bs grows likely to start operating in a range of mkts - possibly over the world - and may have several desision within the overall bs
means comm bEcomre more complex
growth can therfore lead to inefficiency thorugh slower dm and poor dm being made = hgher ACPU ?
Explain DEOS comm through emplloyes
BS INCREASE EMPLOYEES as it grows therfore this means cost morein terms of comm of ideas, processes and info
comm in a business can lead to what type of comm and how does htis affect employees
1 way top down comm of ideas - can make employees felle demotivated as just told what to do
depending on how many laers and people information filters through dm and instructions can take … and how cna these affect bs
time to be passed around and emo ight not be able to take action w/o these steps reducing the overall productivity for the company
what can happen to message with deos comm
meesags can get jumbled up/msinterpreted leadding to poo coord and execution of projects and tasks
CONTROL and coord problems sum it u
With more employees,
more products
and more decisions
being made as well as comm flows, controlling quality fo work and who does what can become more difficult
state the 2 problems with coord and control
As bs gains employees there may be too many resulting in overcrowding of emp in specific area e.g operation this can result in duplication of tasks and getting in the way of each other = less efficient and increased costs
Coordinating activities so people feel informed and understand how they’re doing and what they need to do when can become more challenging
This leads to greater chance mistakes are made and problems occur increasing unit costs
demotivation explain
As bs grows w more employees it may be that employees lose contact with the senior managers and the overall vision of the bs -
they may feel they aren’t very significant to the success of the bs as a whole which may lead to demotivation
link demotivation to Maslow
In terms of maslow’s hierarchy of needs theory , employees may not feel noticed so their ego eneds arent met
poorly motivated staff lead to what
reduce prod and lead to more mistakes and higher cost
