A2 Business Studies Resources

1. Do Now – Answer the following….
What would be the advantages
of adding more people to 5 minutes
increase utilisation?
At what point might it cause
problems to keep adding
people?
What might these problems be?

2. Operational Strategies: Scale and
resource mix
CHAPTER 12

3. Learning Objectives
By the end of the lesson you should be able to:
1. Identify the causes of economies and diseconomies of
scale.
2. Assess the importance of economies and diseconomies
of scale
3. Understand the advantages and disadvantages of capital
and labour intensive resource mixes.

4. Scale of operation - economies and
diseconomies of scale
The size of an organisation will
directly influence its ability to
operate efficiently.
The point at which a firm is operating
at its most efficient is known as its
optimum output and is at the point
were the average cost of production
is at it’s lowest.
Before a firm reaches its optimum
output, it will benefit from
economies of scale as it grows, once
optimum output is reached and
exceeded further growth will start to
cause problems, diseconomies of
scale.
LO1) Identify the causes of economies and diseconomies of scale.

5. Economies or diseconomies of scale
– how does it happen?
Match the correct example to
the following:
Internal economies of scale
External economies of scale
Internal diseconomies of scale
External diseconomies of scale
LO1) Identify the causes of economies and diseconomies of scale.

6. Which example of economies and
diseconomies of scale
LO1) Identify the causes of economies and diseconomies of scale.

7. Test yourself - What have you learned about
economies and diseconomies of scale?
1. Distinguish between economies and
diseconomies of scale
2. What is meant by the term ‘optimum level of
output’?
3. With the use of appropriate examples, explain
how a chain of high street quality Indian
restaurants may benefit from economies of
scale.
4. With the use of appropriate examples, explain
how a large distribution business may suffer
from diseconomies of scale.
LO2) Assess the importance of economies and diseconomies of scale

8. Mix of Resources
What does a firm regard as it’s resources?
GROUP 1 GROUP 2
Research and find Research and find
information about capital information about labour
intensive industries and intensive industries and
create a Pictionary create a Pictionary
poster. poster.
Find relevant advantages Find relevant advantages
and disadvantages. and disadvantages.
LO3) Understand the advantages and disadvantages of capital and labour intensive resource mixes.

9. TIME TO VOTE! Optimum Resource Mix:
Is one approach better
The combination of
than the other? capital and human
resources which allows
Prepared to explain the for the greatest
reasons for your response. efficiency.

10. Case Study – Technology and farming
1. Explain the advantages and
disadvantages to farming
of being a capital intensive
businesses.
2. Explain how farming has
benefited by moving away
from being labour
intensive.
LO3) Understand the advantages and disadvantages of capital and labour intensive resource mixes.

11. Re-cap Learning Objectives
You should now be able to:
1. Identify the causes of economies and diseconomies of
scale.
2. Assess the importance of economies and diseconomies
of scale
3. Understand the advantages and disadvantages of capital
and labour intensive resource mixes.