Production can be small or large scale.
is a business carried out on a small-scale producers.
Advantages of small-scale Production
- The small-scale business creates a higher employment opportunities.
- It encourages the use of local raw materials.
- They contribute to the development of the nation through man power training and local technology.
- They maintain close rapport between the employees/clients and the Directors of the business. That is direct and personal services exist.
- It is easily established owing to the small capital needed
Disadvantages of small-scale Production
- Covers no wide range of sales outlet
- Mass production is really hampered and as such, expansion becomes impossible.
- Lacks sufficient capital to embark on heavy projects.
REASONS FOR THE SURVIVAL OF SMALL SCALE BUSINESS
- Small scale business survives because it needs small capital to be established.
- Another reason for the survival of small-scale business the direct and personal service that exists in the business.
- They produce in a small quantity owing to the small demand of their products as a result of limited market.
- Most of the small-scale businesses are specialists, Supplier and sub-contractors of the big firms.
- The cost of operating a small-scale business is infinitesimal compared to large-scale business.
LARGE SCALE PRODUCTION
are businesses carried out on a Large scale basis for the purpose of maximizing profits.
Advantages of Large Scale Production
- Large-scale producers undertake research work in order to improve on the method of their Production.
- They stand a better chance of obtaining loans from banks and other financial institutions.
- Effective division of labour is enjoyed.
- Enhancement of product standardization is guaranteed.
- Workers enjoy a large range of social and welfare services.
- They stand in a better position to negotiate for a bulk purchase of raw materials and tools required for production at a lower price than the small-scale producers.
- Wide range of marketing outlets exists in a large-scale business.
- Survives uncertainties and risks easily
Disadvantages of Large Scale Production
- Absence of direct and personal relationship between the manager and employees.
- Some goods may be carelessly produced, thereby leading to wastage.
- Large scale production causes monopolistic situations.
- Delay in vital administrative decision is seen at the esteem. This is as a result of the long chain of decision-making body that exists in the company.