You Can't Get Economies of Scale In Labour

Genius comments from the Business section of the SMH today about the collapse of ABC Learning Group (this generation's Bond Corporation). Such a stark case of misinterpreting the nature of the 'units' being 'shifted': people.

"A corporation will only be more efficient than a family business if it can amalgamate small disparate holdings, achieve economies of scale in purchasing power or marketing power, and lower the cost of production.

It works in retailing, and that is the reason large retailers can offer lower prices than corner shops.

That model was never adopted by ABC Learning because it could never be implemented. Child care is labour intensive. It requires skilled labour by individuals devoted to the task, not just paid employees".

From http://business.smh.com.au/business/learning-an-old-lesson-a-sucker-is-born-every-minute-20081114-677q.html