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Scale

In Texas - big is good, bigger is better and too big is just about right. Anonymous


Scale is the most direct indicator of performance. When we think of a retail or fast food chain, we invariably want to know how many outlets it has, or for an automobile manufacturer, how many cars it makes. Increasing scale should mean more economic operation, but could mean more bureaucracy and a slower response to changing conditions. Scale can be measured in terms of:

How much?
How many?
How often?
  

Annual turnover, capital employed, size of building, extent of its operation
Number of employees, number of stores, number of beds
Flights per year, trains per hour, deliveries per day

Ways to grow: Organizations can get bigger in a number of ways:
Organic
or internal growth uses the organization's own resources to invest in more people, premises or equipment.  To do this it has to develop a bigger market for its products and services. The main problem with organic growth is obtaining those resources which are needed, whether money or hiring and training the right people and the amount of time taken to grow.
Merging
with another organization could lead to a take-over or being taken over to benefit from the other organizationís production facilities or market. This could be an organization with similar products and services - two hospitals merging to form a new larger hospital group; or vertical integration - a building company taking over a roofing firm.
Franchising
allows other organizations to appear as part of the original organization but in fact are independent businesses.

Discontinuities
: There are a number of discontinuities or step changes which organizations face during growth:

The single proprietor
, who knows everything about the organization himself - such as every employee, customer, product or supplier and who finds that he can no longer cope on his own and has to get a manager to share the workload.
The private company,
which has grown from small beginnings and now finds that it needs the benefit of access to capital and the credibility, publicity and kudos of being a public company.
The public company,
which finds that it cannot compete effectively on its own and needs to form alliances.
The non-profit organization,
needing to join forces with another organization to use resources more effectively.  >>>