Towards the formalization of ‘small is beautiful’: Societal effectiveness versus economic efficiency |
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Authors: | Pierre-André Julien Christian Lafrance |
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Institution: | The authors are respectively director and professor at the Laboratoire en économie et gestion des systèmes de petites dimensions of the Université du Québec à Trois-Riviéres, CP 500, Trois-Rivières, Québec, Canada G9A 5H7 |
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Abstract: | Economic efficiency criteria are often based on considerations of concentration, standardization and centralization of activities which may undertake or omit entirely various internal and external diseconomies of by-products associated with any growth process. This paper re-examines the context in which the efficiency criterion is usually applied. The notion of effectiveness is analysed theoretically from two perspectives. Social costs are introduced initially in a static framework and then the inertia of large organizations is discussed in a dynamic perspective. The flexibility of the system in adjusting to rapid changes in technology is analysed from a structural approach based on smaller and more decentralized organizations. |
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Keywords: | production management economies of scale social costs |
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