Economies of scale are advantages obtained from a company becoming large and diseconomies of scale are additional costs inflicted because a firm has become very large.  The causes of economies of scale are that as a firm becomes larger it may be able to utilize  labor and managerial specialization more efficiently, capital more efficiently, and may be able to profitably use by-products from its operations.  Diseconomies of scale result from the organization becoming too large to effectively manage and inefficiencies developing.