size of firms
Post on 11-Jan-2015
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Growth of Firms
Department of Economics and Business DCS
Introduction
Many businesses believe efficiency can be improved by increasing the size and scale of operations.
Many businesses believe efficiency can be improved by increasing the size and scale of operations.
Reasons for (and benefits of) Growth
• Aid survival• Reduce risk• Gain economies of
scale / Reduce costs• Increase future profitability• Gain (or maintain) market
share
Introduction
Reasons for (and benefits of) Growth
• Increase feeling of status and power for management etc
• Provide greater security and remuneration
Introduction
Introduction
Factors Affecting Choice of Operational Scale
• Objectives of owners etc.• Size of Market. • Availability of workforce.• Availability of finance. • Technological development.• Government policies (Monopolies
etc)• So Why do some firms remain
small?
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