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Coordination & Inflexibility Costs
Costs arising from the need to coordinate activities across different parts of an organization, which may lead to inflexibility.
Implications
The costs associated with coordinating activities within an organization, as well as the costs of inflexibility when processes or systems are too rigid to adapt to changes, impacting efficiency and responsiveness.
Example
Example: A global company experiences high coordination and inflexibility costs when implementing a standardized IT system across all subsidiaries, leading to delays and increased operational expenses.
Related Terms
Different from direct operational costs, these costs arise from the complexities of managing and adapting organizational processes.
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