Decisions are not taken quickly and there is too much form filling. Lack of communication in a large firm means than management tasks sometimes get done twice. Poor labour relations may develop in large companies. These occur when too many firms have located in one area. Land and factories become scarce and rents begin to rise.
Local roads become congested and so transport costs begin to rise.
This occurs when two firms join together to form one new company. The figure below shows the three main types of integration. Motives for Integration Integration increases the size of the firm. Larger firms can achieve more internal economies of sale. Large domestic firms are then more able to compete against large foreign multinationals.