MGT 3111 Chapter Notes - Chapter 13, 14: Quality Control, Moral Hazard, Niche Market
Document Summary
A fir(cid:373)"s pa(cid:272)e of growth is the rate at whi(cid:272)h it is growi(cid:374)g o(cid:374) a(cid:374) a(cid:374)(cid:374)ual (cid:271)asis. The si(cid:454) (cid:373)ost common reasons firms pursue growth are capturing economies of scale, capturing economies of scope, market leadership, influence, power and survivability, need to accommodate the growth of key customers and ability to attract and retain talented employees. The two sections of challenges of growth include managerial capacity and day-today challenges of growing a business. Figure 13. 3 refers to the basic model of firm growth. It states that entrepreneurial services requires increase in managerial services to accomplish firm growth. Economies of scale are generated when increasing production lowers the average cost of each unit produced. With economies of scope, the advantage a firm accrues comes through scope (or range) of a fir(cid:373)"s operatio(cid:374)s rather tha(cid:374) fro(cid:373) its s(cid:272)ale of produ(cid:272)tio(cid:374).
