Complexity

• The Economist magazine states that complexity in big organizations can negate cost savings, causing diseconomy of scale. Such complexity also dissuades passion in business, according to the famous professor of management Frederick Herzberg, who said such passion was more important than sheer numbers. Herzberg implied that innovation and interest in one's work was more valuable than size.
  
  

Coordination

• Managerial problems are often specific to diseconomies of scale. Specifically, managers have a harder time coordinating tasks and processes. This leads to a loss of competitive advantage that might otherwise be gained by a large corporation. Inefficiencies may be hidden from management or may be a result of mismanagement or inexperience with scale.
  
  

Miscommunication

• Miscommunication at big firms can be common simply because of the sheer number of employees. Multiple locations create communications and supply-chain difficulties. Diseconomy of scale also occurs when large amounts of information must be distributed among many employees, where the company's message or business plan can be diluted.
  
  

Labor Intensity

• Corporations are not the only entities to encounter diseconomies of scale. In a Harvard Kennedy School study, Chris Pineda found that because city governments engage in labor-intensive services, economies of scale are harder to reach than in a pure production environment. Pineda found that services such as police and fire protection and public works were not easily replicated, and thus can be the source of diseconomies of scale in proposed local government consolidations.
  
  

Worker Dissatisfaction

• Workers may lose their sense of self in a large company. If workers are unhappy, this can cause or at the very least aggravate diseconomies of scale. Worker dissatisfaction may be due to repeated miscommunications or inefficiencies common to the big firm.
  
  

Bureaucracy

• Pineda also notes that government bureaucrats may be particularly ill-equipped to manage large organizations. This means that diseconomies of scale occur when public officials miss clues about residents' needs or budgetary inefficiencies. Pineda thus infers that diseconomies of scale are particularly likely in the public sector.