problems with growth

Question 1

dis of growing in size

Answer 1

diseconomies of scale as unit costs increase as production increases
larger firms harder to manage than smaller firms, causes finanical costs to a firm
harder to motiavte people in large firm then a small firm
internal communciation can be slower and more difficult to get messages to right people, especilly when long chains of command

Question 2

why can quick inorganic growth be a risky strategy

Answer 2

fincial risks

both businesses may have different objectives and cultures (culture clas)
staff of merged busiensses will need to be taught new procedures, may lead to poor customers ervice, loss of sales
increase in redundancy costs for staff
increased job insecurity for staff

Question 3

reasons why a business may want to remain small

Answer 3

want to maintain culture of a small business
businesses become more complicated to manage as it gets bigger