Diseconomies of Scale

Diseconomies of Scale expresses the opposite of economies of scale. It means that above a certain size of the organization the savings of quantity production will be eliminated and production costs are rising again.

Diseconomies of scale in practice: Diseconomies of scale is a phenomenon that occurs in large corporations, government organizations and public administration - where adverse effects arise from large scale of the organization, which cause an increase in costs, such as communication problems, duplication of processes, internal tensions and rivalries, inconsistency of strategies, procedures and policies.