size of firms

Growth of Firms Department of Economics and Business DCS

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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.

Reasons for (and benefits of) Growth

• Aid survival• Reduce risk• Gain economies of

scale / Reduce costs• Increase future profitability• Gain (or maintain) market

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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