Question

What does economies of scale often fail to measure? How would you recommend addressing this limitation?

Answer 1

Growth and the economies it brings don't keep going forever, and this is the place where limitation arises. As your firm keeps on extending, more layers of management are expected to monitor tasks. Greater management implies it is important to assign more work, with the potential loss of control of key procedures. Communication between levels of management may turn into an issue. Laborers who are too specific may get estranged and upset with their occupations. That 10 percent expansion in assets will presently bring about a 5 percent expansion in profitability. Such overexpansion can sting over the long haul. This limitation can be addressed by providing better perks and salaries to specialized workers and establishing a strong communication channel between the levels of management.