Economy of scale
This old industrial bigger-is-better assumption is that inflexible core activities (fixed cost) is diluted by higher sales volume. It can be offset by operational flexibility; small but efficient human networks; short transport distances (and lead times); and less local environment disruption.
This old canard is almost always cited when companies merge. But mergers often fail to realize economies of scale. Merging of complex systems and different cultures is often harder than financial planners foresaw.

Everything big is not bad. For example, one cannot be a global delivery service like Fed-Ex and be a small company. But becoming big just to enjoy bigger economies of scale is a strategy filled with booby traps.

And becoming too big and rigid to quickly adapt is hazardous to society. Inability to adapt is what is implied by large global banks being "too big to fail." 
Immediately related elementsHow this works
-
Compression Thinking Â»Compression Thinking
Compression vs. Expansion Thinking Â»Compression vs. Expansion Thinking
Expansion Economics Â»Expansion Economics
Systems Based on Markets Â»Systems Based on Markets
Competitiveness Â»Competitiveness
Economy of scale
+Commentaires (0)
+Citations (0)
+About