Dividing labor into specialized activities leads to diseconomies of scale because the resulting organizational structure is too difficult to manage.

Dividing labor into specialized activities leads to economies of scale, not diseconomies of scale. Specialization allows workers to become more efficient and skilled in their specific tasks, leading to increased productivity and lower costs. However, there may be challenges in managing the complex organizational structure that results from specialization. These challenges can be overcome with effective management techniques, such as clear communication, coordination, and delegation of responsibilities.