(I) In a small firm the manager may perform the role of cost accountant, salesman, personnel officer, stock controller etc. (II) However, as a firm increases in size it can take advantage of specialization of labour. (III) Each managerial role can be allocated to a specialist in that field. (IV) Many firms spend a lot of money on research and development. (V) Furthermore, bigger firms can buy inmanagement services and afford large in-house salaries to entice and retain the best management.