Scale: Difference between revisions
Jump to navigation
Jump to search
Amwelladmin (talk | contribs) No edit summary |
Amwelladmin (talk | contribs) No edit summary |
||
Line 1: | Line 1: | ||
{{a|risk|}} | {{a|risk|}}The point where the scale opportunities are large enough to require active management: that is, “passive” scale benefits, that flow from the simple fact of size (e.g., adding another user to a flat fee all-you-can-eat software licence automatically ''reduces'' the per-user cost of the licence, without anyone having to do anything) run off at the point where one needs to divert the firm’s resources and personnel ''towards managing these efficiencies'' or manufacturing scale efficiencies that don’t arise by themselves (e.g., negotiating [[law firm panel]] arrangements, [[outsourcing]], [[offshoring]]). It may engage [[management consultant]]s, [[middle manager]]s and eventually a [[chief operating officer]] whose only job is to extract efficiencies. As long as the efficiencies wrought are greater than the marginal cost of that person, team, or fiefdom, then the fiefdom can be justified on hard economic data. | ||
The point where the scale opportunities are large enough to require active management: that is, “passive” scale benefits, that flow from the simple fact of size ( | |||
But ''O, Paradox'': the COO unit ''itself'' can become so complex that it presents opportunities to lever its scale. Beyond a point, it becomes so complex, so inefficient, that one should appoint a [[chief operating officer]] ''for the chief operating officer’s office'', tasked with consolidating all the diaspora of COO functions groups, initiatives and change managers into a single function. | |||
{{sa}} | {{sa}} | ||
*[[Redundancy]] | |||
*[[Scale paradox]] | *[[Scale paradox]] |