LO and Big Layoffs LO5832

Michael McMaster (Michael@kbddean.demon.co.uk)
Sat, 24 Feb 1996 08:29:54 +0000

Replying to LO5802 --

As Wolfgang suggests, "economies of scale" were never understood very
well. The idea was "bigger is better (ie. cheaper)" but taken as a
blanket statement.

Even at the level of physical systems - the waning material universe
dominance - economies of scale frequently failed to materialise or
started that way and then turned into dis-economies. Scale has
always been bought at the expense on cost of coordination of action.
This expense tended to increase more than proportionally with size
and, like dinasaurs and possibly some early potential versions of man
with even larger brains than ours, the energy to maintain the
necessary communication was greater than the payoff it could

The exponential increase in communicative ability has change the
possibility here even at the level of giants whose production is
mainly based on the material and physical still.

But, to the extent that an industry has moved into the information or
knowledge age and the physical has reduced in relative importance,
the idea of economy of scale transforms. The costs of communication
and coordination are almost non-existent in technical terms. What is
now required to realise economies of scale is development of people,
understanding of information and communication, conceptual approaches
to utilise the information technology.

The Internet is probably the best expression of economies of scale in the
new domain.

[Quote of prev msg snipped by your host...]


Michael McMaster Michael@kbddean.demon.co.uk

Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>