1.1.3+Business+Growth+and+Measurement+of+size

• **Show understanding of the different methods of measuring the size of business units, e.g. number of employees, capital employed** media type="custom" key="15097858" media type="custom" key="15102030"
 * • Show awareness of the problems of using the different methods**
 * Understand the different ways by which a business can grow**
 * • Explain reasons why businesses seek to grow**
 * • Describe the problems connected with the growth of a business**

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Note that the above mentions Economies of scale as an advantage of and reason for firms to grow. This is covered more fully here.


 * Student Task: "Why are there small firms?" read and note P 27-28. **

How firms Grow
** Read and note P 24-6 and attempt activity 2.6 (Borrington and Stimpson) ** **End of unit Activity:** You are the Personal Assistant for the Manager of ‘Wintel Ltd’. a medium sized Chinese Computer Company, based in Shanghai. You employ 250 workers. Currently the market for computers are good, although competition is increasing, and the sales figures are increasing. Your Manager has been made offers by similar and larger Computer Companies to Merge or create a Joint Venture. To help him/her make a decision, you, as PA, have been asked to produce a report to cover the following issues.

* Identify the difference between a Joint Venture and a Merger. * Give reasons why firms may choose to join together. * Explain why External Growth may be quicker than Internal Growth for your Company. * The negative side - Explain why Mergers may not result in an improvement in efficiency. * To finish the report give your own opinion as to whether or not your company should Merge.