Diseconomies of Scale

External diseconomies of scale (List)

Material price is likely to increase
Local supply shortage

Internal Diseconomies of Scale (List)

(We Can Climb Trees)
Waste/Loss , Communication , Control/Coordination, Tribalism

Waste/ Loss

Waste/Loss increases as it becomes harder to track stock when there is much more of it

Communication

Communication worsens between levels of authority in a firm as number of levels increases as it takes longer to pass information up and down levels

Control

Control/Coordination becomes harder for managers as there is more people per manager

Tribalism

them vs us - departments prioritise themselves over business

External diseconomies of scale (definition)

Factors that increase the average cost of production for a firm as a result of market growth

Internal Diseconomies of Scale (definition)

Factors that increase the AC of production as a result of internal firm growth