Diseconomies of Scale - Mindmap in A Level and IB Economics

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Created by: TessAni
Created on: 18-01-13 12:06

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Diseconomies of Scale
- Causes
  - Communication - extra costs may be incurred in making managers aware of what is going on
  - Problems of coordination - layers of management and several tiers of decision making can hinder change
  - Problems of industrial relations - firms increase in scale and workers feel alienated lowering productivity
- Avoidance
  - Development in Human Resources in order to avoid some of the causes of diseconomiesof scale
  - Performance related pay schemes provide financial incentives
  - Out-sourcing (reducing costs but maintaining control)
- Causes of an increase in long run average costs beyond the point of minimum efficient scale

Comments

Report Mon 16th December, 2013 @ 10:52

A concise mind map which goes through the main points on the causes of and methods of avoiding diseconomies of scale.

Report Wed 11th February, 2015 @ 11:55

What about internal/external?

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