Diseconomies of Scale
The phenomenon where increasing the scale of production leads to higher per-unit costs, opposite of economies of scale. Often caused by coordination complexity, bureaucracy, or resource constraints.
Biological Context
Large organisms face biological diseconomies: longer transport distances, coordination challenges, and heat dissipation problems. A blue whale can't just be a scaled-up mouse—fundamental constraints change with size. This is why the largest animals aren't simply bigger versions of small ones.
Business Application
Large companies often suffer diseconomies: slower decision-making, communication overhead, reduced employee motivation. At some point, the costs of coordination exceed the benefits of scale. This creates natural limits to firm size and opportunities for smaller competitors.