"GROWTH AND SCALE OF BUSINESS ORGANISATIONS" Introducton: Firms wish to grow for many reasons, not the least of them being the driving ambitions of an entrepreneur. Organisations often grow as they develop new products and markets. Sometimes this growth is defensive, i.e. necessary because saturation has been reached in one market or because a producy has reached the end of its profitable life. Success in the original activity or in innovation is often the means to growth for an organisation of whatever type. Organisations may grow organically through the development of their existing budiness or activity, or growth may be external through mergers and takeovers. Both methods have their advamtages and disadvantages. Whichever way an enterprise expands, it will enjoy advantages and face problems. The major benefits of growth come from the economies of large-scale production, which reduce the cost per unit, and the advantages of large organisations which give power in the market; on the other hand too much expansion can lead to diseconomies of scale. Just as the individual firm can experience economies and diseconomies of scale as it grows, so too a whole industry can benefit or suffer as it develops. One of the major developments in organisational growth and the scale of operations has been globalisation. Market and the location of business operations are being seen less and less as local or even national. Increasingly, the whole world is available to even medium-sized companies and, with the advent of e-commerce and global communications, to small business, including sole traders.
Posted on: Mon, 24 Jun 2013 09:55:04 +0000
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