Circle Joined with Anglia in order to grow. It may have taken both companies a long time to grow into the big company they are. Growth as a single company may be extremely difficult and challenging in terms of costs and the time required to expand its operations. After merging the company currently owns over fifteen thousand homes in forty-seven local authority areas around London. Circle merged in order to increase its asset base. This is advantageous because it makes it possible to make borrowing from a financial institution. The more assets it has, the more security it can provide for borrowing large amounts of cash.
It uses this money to expand its operations. It merged to survive and build an empire. In most cases, empires consist of many small companies. If a company is big, it can be able to survive the test of time and withstand stiff competition. Although there are many reasons to merge, this does not come without both regulatory and accountability constraints on the organization. These include the following: in most countries, the government requires that no company may own more than 25% of the market share.
Circle merging with other companies may be restricted due to this constraint. Diseconomies of scale are also a constraint on the Circle Company. With the tremendous growth of the circle 33, the production of the goods which in this case are houses may decrease. This happens because there is a poor communication channel within the company. The channel of command becomes longer which makes it easy for information to be distorted before it reaches the recipients. The mangers also have a wide span of controls which makes it difficult for them to keep track of everything that happens.
This also reduces the face to face interactions by the manager and employees resulting in to use of memos and newsletters leading to reduced feedback. As the company grows, there is less attention on individual workers, which makes them feel less appreciated. This may result in reduced loyalty and motivation to the organization. As this reduces, so does the quality and quantity of output, increasing the costs of labor per unit.
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