Bank Of America Essay

Khristina,
Bank of America (BAC) services consumers in fifty states, District of Columbia, Puerto Rico, the United States Virgin Islands, and thirty-five other countries (Niedle & Littrell, 2016). BAC serves individual consumers, small and middle businesses, large corporations, investing, asset management, and financial and risk management (Niedle & Littrell, 2016). The most fundamental reason for economies of scale is large-scale organizations like BAC have greater opportunities for specialization and division of labor (Thomas & Maurice, 2010). The BAC can take their large-scale production opportunities, divide the production process into several specialized tasks (Thomas & Maurice, 2010). The Division of Labor allows workers to be able to

The BAC has approximately sixteen thousand ATM’s, their online banking services approximately thirty-three million consumers, and their mobile services serves approximately twenty million consumers (Niedle & Littrell, 2016). ATM’s, online banking, and mobile services are technological factors used by BAC as their organization operations have expanded (Thomas & Maurice, 2010). These are qualitative changes in the production process for BAC and the type of capital equipment employed (Thomas & Maurice, 2010). The introduction of various types of automation devices reduces the unit cost of production (Thomas & Maurice, 2010). BAC use of ATM’s, online banking, and mobile services reduces the number of workers, affecting the quasi-fixed inputs (Thomas & Maurice, 2010). Although with these technologies BAC still employees several workers, however, BAC has stronger economies of scale because the quasi-fixed cost of these technologies account for a larger portion of the total costs of servicing consumers banking needs (Thomas & Maurice, 2010). Without these technologies BAC would have to have even more workers as output increases therefore, causing the unit cost to increase (Thomas & Maurice, 2010). As output increases, the long-run average cost rises causing diseconomies of scale (Thomas &