As a manufacturer of advanced offshore wind turbines expands its scale of production, it invests in custom-built, automated welding machinery that dramatically reduces the average cost per unit at high volumes of output. However, as the organisation grows, its multi-layered hierarchical structure causes vital instructions from senior executives to become distorted by the time they reach factory floor supervisors, resulting in frequent production bottlenecks.
Consequently, the firm is experiencing:
technical economies of scale and communication diseconomies of scale.
managerial economies of scale and coordination diseconomies of scale.
technical economies of scale and managerial economies of scale.
purchasing economies of scale and coordination diseconomies of scale.
