Decreasing returns to scale, on the other hand, arise primarily because as the scale of operation increases, it becomes ever more difficult to manage the firm effectively and coordinate the various operation and divisions of the firm. The number of meetings, the paperwork, and telephone bills increase more than proportionately to the increase in the scale of operation, and it becomes increasingly difficult for top management to ensure that their directives and guidelines are properly carried out by their subordinate. Thus, efficiency decrease and costs per unit tend to rise.