From Wikipedia: Diseconomy of Scale (The article has the “original research” warning, and therefore, should be taken with more of a grain of salt than even the average Wikipedia article.
Diseconomies of scale are the forces that cause larger firms and governments to produce goods and services at increased per-unit costs. They are less well known than what economists have long understood as “economies of scale”, the forces which enable larger firms to produce goods and services at reduced per-unit costs. The concept may be applied to non-market entities as well. Some political philosophies, such as libertarianism, recognize the concept as applying to government.
There are obvious efficiencies that come with increased size: The per-worker overhead of a leased office for two people can be slightly more than half that of an office for one person. Meanwhile, two people can potentially accomplish at least double what person can do.
Moreover, there is a certain minimum size below which certain tasks are not feasible. One million individuals working alone would likely not be able to create a practical system of roadways going from Atlantic to Pacific coasts. Some things require big scale to make them happen.
Unfortunately, there is a point where the additional costs incurred by adding additional resources [see Handshake Problem] are greater than the additional savings gained by sharing the resources with one more person.
The scale problem illustrated with keeping track of organizational “to-do” lists:
- 1 person – might be forced to write things down on a scrap of paper to keep things organized.
- 2 people – leave post-it notes.
- 5-10 people – use team to-do list software.
- 10-30 people – may use more sophisticated, “issue-tracking” software.
- 30-100 people – may use a more generic activity management software
- 100+ people – have to be certified to be on the use of standardized language and procedures so that activities may be managed in the most effective way possible.
The last step in the chain here are procedures for dealing with procedures to track tasks. That’s a virtual calculus of bureaucracy. Considering how few people are any good at the mathematical calculus, which deals which actual numbers and formulas, I would imagine that bureaucratic calculus is nearly impossible.