The Size of the Work Unit and Strike Incidence

Abstract

FOR some time economists have been interested in the long run relationship between the scale of output of any work unit and its average costs of production. There now exists an extensive literature dealing with the theoretical and empirical importance of various economies and diseconomies of scale and the consequent shape of the traditional long run average cost curve. Yet there is at least one issue that has not received so much attention. This concerns the possibility of a relationship between the size of the work unit and the quality of internal management/labour relations.' Since the latter is likely to have significant bearing upon the total costs of production, if such a relationship existed it would surely be an integral part of the firm's decision making problem.2 In this paper we put forward certain a priori hypotheses which suggest that there is a definite causal link between size and the quality of internal working relationships. We further argue that such hypotheses are supported by some of the empirical work into strike causation.

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