Sample Essay
Another thing driving efficiency is the linkage between the size of the organization and the possible emergence of the economies of scope that are due to occur with the increased size of the organization. There exist economies of scope when the production process results in the by production of complementary or sellable goods, e.g. the production of cooking oil and soap which share a complementary production process. Efficiency is achieved by selling these by products as well and the current main product being produces as the wastage from the process is minimized. However only large organizations can take advantage of this efficiency as the scale of production needs to be considerably large for by products to be produced in significant quantities as well.
Aside from this the large organizations due to the availability of funds are able to invest heavily in capital and technological intelligence which gives them efficiency and increases the competency of the firm. The firms also gain comparative advantage relative to other firm sin the same market.
The specialization of work force takes place in large organizations when the complex production processes are deliberately split to form smaller specialized processes with specific assigned teams. These teams are better able to manage themselves and the efficiency of the team in collaboration enhances the efficiency of the organization.
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