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Purchasing economies of scale

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survival of the business

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example: worse communication

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Customers

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Growth

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Managerial Economies of scale

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horizontal integration

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average cost per unit of output decreases as the firm increases in size

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Alienation

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Technical Economies of scale

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CSR

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forward vertical integration

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Potential Investors

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share ownership

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Bonuses

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Suppliers

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employees

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Revenue max

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Average cost per unit of output increases as the firm decreases in size

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Shareholders

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Pressure Groups

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fringe benefits (e.g. Company car, company phone)

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employees

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Government

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Ethical Objectives

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Governments

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Backward integration

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Conglomeration.

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Backward vertical integration

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Marketing economies of scale

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Lateral integration

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Commissions

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Backward Vertigal Integration - form of vertical integration in which a company expands its role to fulfill tasks formerly completed by businesses up the supply chain

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Promotion

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Performance-based pay

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Profit sharing

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Salaries

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Profit-Related Pay: a bonus for staff based on the profits of the business - usually paid as a proportion of basic salary

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piece rate pay

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Can be caused by a lack of motivation

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Sales max

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lack of coordination

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Profit Maximisation

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Increase market share

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Hourly wage rate: payment to a worker made for each hour worked

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Brand loyalty

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competitors

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Profit Satisficing

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Satisficing

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Increase Market Share