Talk:Diseconomies of scale

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I just moved my article here from "returns to scale". If anyone has any suggestions for improvements, please let me know. StuRat 01:15, 9 August 2005 (UTC)

Contents 1 Missing point(s) 2 Dubious Quality 3 Software 4 Other uses of term

[edit] Missing point(s)

Although my english isn't good I tryto explain to you, what I think is missing in the "Causes" section and what I think would be most imprtant: The indivisibility of ressources in not mentioned. But if you have a company and one truckto deliver your good to your customers and this one is 100% occupied, you only have to get a marginal incrase in your sales and you'll need a new truck. But just for this marginal increase the new truck doesn't pay off. So you have a discontinuous production function - and at the jump discontinuit you incorporate hughe diseconomies of scale. Could someone pls. include this or explain why it's not includes? TIA!! --141.3.166.109 11:19, 2 March 2006 (UTC)

Surely the indivisibility of resources is an economy of scale? If a truck carries 100 units, costs $10,000 (for example) and my firm produces 50 units (1 truck) I spend $200 per unit. If another firm produces 50,050 units (501 trucks) (although they still have the same empty space as me on a truck) they spend $100.10 per unit, an economy of scale. --81.152.177.154 17:42, 9 October 2006 (UTC)

I agree, it should be added to the economies of scale article. StuRat 04:08, 18 October 2006 (UTC)

[edit] Dubious Quality

This part..."A firm with five employees might employ one as a manager and the other four as workers. If that manager does nothing other than manage the workers under them, then the productivity of the firm has been reduced by 20%" is questionable. The role a manager is to ensure the staff remain productive/working practices are productive. Therefore 5 employees without a manager may well have lower productivity levels than 4 and a manager.

As a result I do not believe that section is particulary good as it stands. There are quesitons of large-firms having too many managers which could reduce productivity, but the article suggest that managers bring nothing to productivity when in reality they often increase productivity through good management.

Of course these are questions of the theory, not the way the theory is presented!ny156uk 10:59, 19 November 2006 (UTC)

I see managers as a necessary evil. Ideally, all employees would be able to work autonomously. In a company with one employee, that had better be the case. A company with only 2 or 3 employees probably can't afford to have a manager, either. With such a small number of employees, the performance of each employee directly bears on the success or failure of the company, and thus "peer pressure" would be applied to any employee who wasn't pulling his weight. However, as a company becomes larger, the actions of each employee become less significant in the total success or failure of the company, so peer pressure is no longer adequate, and managers must be brought in to get the employees to do their work. Of course, as I had said, these managers then become "overhead" that must be carried. I don't agree that managers can improve efficiency over what well-motivated employees could accomplish on their own. At best, a good manager can get unmotivated employees to match the performance of those "self-starters", less the time each employee must now spend filling out status reports, etc., to satisfy the requirements of the manager. StuRat 01:01, 7 March 2007 (UTC)

Employees can hinder each other and a task of a manager is to minimise this hindrance and align the actions of the employees in the same direction, for this reason (good) managers do have their purpose and they increase the productivity of a firm. --Toon Macharis 16:33, 15 May 2007 (UTC)

[edit] Software

I think writing software has considerable diseconomies of scale. The best programmers are typically 5-10 times more productive than the average ones. So they better work for themselves than in a big company. Also putting x programmers together doesn't generate an x times greater output as developping software has a lot of overhead (everyone has to understand everything to the details.) At worst, x programmers are even less productive than 1 programmer, because one leading programmer may have to take extra time to explain things to his colleagues. See also the classic The Mythical Man Month. --Toon Macharis 16:33, 15 May 2007 (UTC)

[edit] Other uses of term

The way the term has been defined seems too specific. I know that diseconomies of scale can also be attributed to urban economics. The understanding is that as urban areas expand they provoke a range of problems including traffic congestion and air pollution etc. To me it seems too specific to be internalize its use to just a firm. Chris.suckling (talk) 10:51, 2 June 2008 (UTC)