A comparison between a large-scale and Small-scale organization
In order to have a complete development and growth of the country, both large-scale and small-scale business firms are essential and play a vital role in the economic development of the country. Both large scale and small scale organization require some necessary skills for an entrepreneur to lead these organizations as a successful enterprise. Both the firms help in various ways in the development of the country by providing employment opportunities, use of unpacked resources available in the country and many more. So it is always essential to analyze the role of both these firms in the economic aspect to know well about the advantages and disadvantages of both these firms to perform better in the mere future. This article helps you to know about the differences between large-scale and small-scale organizations.
- Reach of Global Market: A large-scale organization has the option of reaching many target customers across the globe. It covers almost the entire geographical location of the world by attracting many target customers either directly or indirectly through many online platforms: the reach of the global market is possible only for smaller target countries as exports are possible for the small-scale firms.
- Capital Utilization and flow of funds: Large-scale firms require huge capital flow whereas the smaller firms require less capital. Many large firms try to raise their funds through many financial investments like the issue of shares, debentures etc. The smaller firm utilizes the owner’s capital for raising funds.
- Resources Available: For a smaller firm, resources are available in the nearby location and require lesser imports whereas the larger firms need increasing import of goods for their finished product.
- Employment Opportunities: Both the firms offer many employment opportunities for the people in and around the area in which larger firms provide more jobs and have an employment assurance for longer years when compared to smaller firms.
- Gestation period: The gestation period for the larger firm is relatively more when compared to smaller firms, where the gestation period is shorter. The conversion of cash into a product and the product into cash require more time for a larger firm.
- As a sub-contractor: Many smaller firms act as a sub-contractor in which, it helps in the production of small units, assemblies for large-scale organization.
- Risk Involved: Both the firm involves risk in a certain amount but the proportion varies to a certain degree for both these firms. The large-scale firm needs more risk involved since much of the capital is being employed to get a minimum profit.
- Liquidity Position: The liquidity position of the firm both large-scale and small-scale need to concentrate on a high level since the improper flow of funds affect both the firms on a significant level. If these firms are not in a stable liquidity position, the condition of the firm to exist becomes impossible. It is always necessary to have a regular check on the liquidity position of both the firms.