Operational Strategies: Scale & Resource Mix

Choosing the Right Scale of Production.

Economies of Scale:

1. Purchasing Economies



2. Technical Economies



3. Specialisation



Diseconomies of Scale:

1. Communication problems
Click on the picture

 

2. Co-ordination problems
Parts of the organisation not working together to achieve corporate objectives.



Choosing the optimal mix of resources:

Capital versus labour intensive industries.