Examples Of Diseconomies Of Scale

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Diseconomies of scale
The Economic theory tells that a firm may become less efficient if it becomes large. The additional costs of being larger are called diseconomies of scale.
The Diseconomies of scale gives us a result in rising long run average costs which are experienced when a firm expands beyond its optimum scale, at Q. Examples of diseconomies include:
1. Larger firms often suffer poor communication because they find it difficult to maintain an effective flow of information between departments and subsidiaries. For example, a huge supermarket chain may be less responsive to changing tastes and fashions than a much smaller or local retailer.
2. ‘X’ inefficiency is the loss of management efficiency that occurs when firms become large and operate in uncompetitive kind of markets. Such loses of efficiency includes the over paying for resources, lets
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methods to control diseconomies of scale

Big firms often face huge organisational difficulties that can slow them down and cause costs and problems. So I was into a BBC article the big businesses learning how to think small which appeared soon after Steve Jobs’ death. His insistence on “no committees” and talking to everyone at least once in a every week was, he said, that is more enough to keep Apple more productive, efficient and successful in terms.
I don’t know if that’s true, but for big organisations, with their vast and varied resources and bewildering bureaucracy, operating with the attitude of a technology start-up is a distant dream. Poorly handled communication skills set, the low levels of motivation prevailing and a shortage of innovative ideas are classic diseconomies of scale that are typical of larger organisations.
The article quotes the general manager of Walker’s Crisps, part of global giant PepsiCo:
“Start-ups try, they fail, they adapt, they move on. They try, they fail, they adapt, they move on. In our marketing, we tend to make a campaign, put it out there and hope it
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