Production can be small or large scale.

Small-scale production

is a business carried out on a small-scale producers.

Advantages of small-scale Production

  1. The small-scale business creates a higher employment opportunities.
  2. It encourages the use of local raw materials.
  3. They contribute to the development of the nation through man power training and local technology.
  4. They maintain close rapport between the employees/clients and the Directors of the business. That is direct and personal services exist.
  5. It is easily established owing to the small capital needed

Disadvantages of small-scale Production

  1.   Covers no wide range of sales outlet
  2. Mass production is really hampered and as such, expansion becomes impossible.
  3.   Lacks sufficient capital to embark on heavy projects.


  1. Small scale business survives because it needs small capital to be established.
  2. Another reason for the survival of small-scale business the direct and personal service that exists in the business.
  3.  They produce in a small quantity owing to the small demand of their products as a result of limited market. 
  4. Most of the small-scale businesses are specialists, Supplier and sub-contractors of the big firms.
  5. The cost of operating a small-scale business is infinitesimal compared to large-scale business.


are businesses carried out on a Large scale basis for the purpose of maximizing profits.

Advantages of Large Scale Production

  1. Large-scale producers undertake research work in order to improve on the method of their Production.
  2. They stand a better chance of obtaining loans from banks and other financial institutions.
  3.  Effective division of labour is enjoyed.
  4.  Enhancement of product standardization is guaranteed.
  5.  Workers enjoy a large range of social and welfare services.
  6.  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.
  7.  Wide range of marketing outlets exists in a large-scale business. 
  8.  Survives uncertainties and risks easily

Disadvantages of Large Scale Production

  1. Absence of direct and personal relationship between the manager and employees.
  2. Some goods may be carelessly produced, thereby leading to wastage.
  3. Large scale production causes monopolistic situations. 
  4. 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.

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