Demerits of integration.

  • May lead to emergence of monopolies as firms merge to form single entities and this promotes inefficiency.
  • Diseconomies may set in due to integration of firms increasing the firm's per unit cost of production.
  • Large firms may attract political interference from government.
  • Individual firms lose much of their independence because they operate under a single management.
  • Amalgamation of firms may sometimes be followed by reduction of staff in individual firms hence unemployment.
  • Management problems may arise as firms expand their operations due to merging.
  • Mistakes made by one firm in the merger will affect other firms under the same management.
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