An Essay And Article On Small Scale And Large Scale Industries

Ever since it came to be realized that there is no other way than that of industrialization in order to deliver the country out of the morass of poverty and backwardness, there has been a controversy whether large scale industries or small scale industries will serve the purpose. There have been arguments from the votaries of the two types of industries in favor of the large or the small industry. As a matter of fact there cannot be an absolute answer. Which type of industries will suit the country depends very much on the conditions obtaining there. In America heavy industry takes precedence over small industry, but in Japan the case is just the opposite. The face of Japanese land is dotted with small industries which have achieved unprecedented prosperity for the people of that country.

Despite this factor of relativity there are certain advantages and disadvantages of both types of industries, which need discussion.

Advantages of Small Scale Industries production

Among the advantages of small scale industry the first is the greater degree of maneuverability.

Firstly, Since the establishment is small, everything is within control of the proprietor. He can adjust his production to the fluctuating demand, which is not possible in a large industry. In a large scale industry, since the number of personnel employed is quite large and the managerial cadre is also hierarchical, much time will have elapsed before the process of adjustment of production to the prevailing demand is set in motion.

Secondly, in a small industry the initiative and responsibility of the proprietor are not sapped by routine. He can initiate action in the required direction because in a majority of cases he is the sole proprietor. Large scale industry, for a11 practical purposes, becomes impersonal giving birth to official routine which hampers or delays initiative on the part of the proprietor who has to look to a host of problems and persons before arriving at a decision.

Thirdly, in a small industry it is easier for the proprietor to maintain personal contact with the employees. By asking about their welfare and getting posted with their problems he can initiate action to satisfy them. By so doing he will be in a position to boost the morale of his employees who in turn will work with more devotion and greater dedication. In a large industry personal contacts of the proprietor with the employees are very rare and those too very casual and devoid of depth and intensity owing to the large number of employees. In a small industry a wise and prudent proprietor can create and maintain a type of family atmosphere very much conducive to the organization.As has been pointed out above, a large scale organization becomes for all practical purposes, impersonal, where work and relationship are governed by rules and procedures.

Fourthly, in a small industry the proprietor can maintain personal contacts with the customers. By personal contacts he can immediately know their preferences for a particular product or can motivate them psychologically to buy the products of his factory. In a large scale industry, this personal contact of the proprietor with the customers is impossible. There are varied problems of the industry itself and the number of customers is so large and scattered that personal contact becomes an impossibility.

Fifthly, if the demand is limited and fluctuating, his advantage is the greatest, for he can easily make adjustment in the supply. By reducing supply he can avoid wastage. In a large industry this is very difficult. Supply cannot be reduced at a short notice, nor can it be increased at once if there is sudden spurt in the demand for the products of the factory.

Sixthly, in a small industry enlightened self-interest works as a great motivating factor, because there is only one proprietor in the majority of cases. In a large industry this element is largely absent in so far as the number of personnel employed is large and varied. In a small industry, the manager and proprietor is the same person, hence the factor of enlightened self-interest operates every time. Sincerity so deep as that of the proprietor cannot be expected from a salaried manager. Besides, the proprietor always wants to increase his profits and is on the lookout of ways how to do it. Personal interest of the employees is involved in their salaries not in profits.

Seventhly, the small scale units do not cause much environmental pollution. If there are any effluents, they are limited and can safely be disposed of without degrading the environment. They are in a much better position to comply with any further regulations regarding environmental control. In a large scale industry it is not possible. Their effluents are tremendous; the smoke spewed by the chimneys, rattling noise created by heavy machinery, the massive contaminated water issuing from the plants cause environmental hazards which are not easy to control. Now-a-days when the problem of environmental degradation is assuming tremendous proportions, the small scale units are in a better position to maintain the eco- balance required.

Advantages of large scale industries

There are certain advantages which are available only in large scale industries.

Firstly, there is greater scope for specialization in a large industry than in a small industry. Specialized personnel contribute to the quality and quantity of output. Any job is divided into several parts, each handled by a person who has specialized in it. By doing it repeatedly he attains proficiency and greater degree of skill. In a small industry this is not possible. A job cannot be divided into parts because of the number of persons employed is limited and the capital invested is small.

Secondly, in a large industry there is greater scope for specialized machinery. For example, where alpines are manufactured in a large industry, there are, several machines which do different types of jobs before a complete alpine is turned out. In a small industry a single machine is enough to turn out complete alpines. But the alpines manufactured through the process indicated in respect of large industry are definitely of superior quality.

Thirdly, a large industry can afford to have its own repair department and thus save costs. In a small industry if the machine fails or any part of it goes out of order for some reason, the proprietor has to send it to a repairing workshop which may be situated far away from the factory. Taking machine to the repairing workshop and then to bring it back involve wastage of much time, energy and money. This adds to the cost of the articles manufactured. In a large industry much time, energy and money can be saved by maintaining a repairing department in the premises of the industry itself

Fourthly, a large industry enjoys the commercial advantage of buying and selling. Raw material is bought in large quantities for which advance contracts can be made. For the purpose of sale of manufactured articles agencies can be opened at different places in the country, and if possible, abroad.

Fifthly, a large industry is capable of standing adverse times. A good industrialist can foresee impending adverse times and can make arrangements in advance to face them. Raw material can be stored in large quantities if there is anticipated a possibility of its shortage in near future. The risk bearing capacity of the industrialist being greater, the manufactured articles can be stored if demand for them goes down and then gradually released manipulating the demand itself. All this is not possible in a small industry.

Sixthly, a large industry can afford to spend large amounts on research and experiment. New and easier ways of doing things can be discovered. There is greater scope for development of science and technology as a result of research and experiment.

Seventhly, a large industry can turn waste products or by-products to good account. Ancillary industries can be established. For instance, where there is a sugar mill, ancillary industry for manufacturing alcohol and spirit from molasses can be established. In this way double purpose is served: waste product is utilized and additional employment is created, leading to the generation of fresh income to the proprietor. In a small industry by products or wastes go totally waste.

Internal and External Economies Of industries

Then there are internal and external economies available in a large industry. Among the internal economies, the first relates to technical economies. In a large industry better technical know-how can be employed. Then there are managerial economies. Talented persons to fill managerial posts can be employed. Better planning by these talented people can boost the quality and quantity of production. Commercial economies are possible only in a large industry. Trade contacts can be established at several points at home and abroad. Financial economies are available in a large industry. There are many financial institutions which can provide finances to only viable and large industries. The credit of a small industry is definitely lower than that of a large industry. Lastly, a large industry provides risk-bearing economies. A big industrialist can take more risks. Among external economies, mention may be made of economies of concentration, economies of information and economies of disintegration. More skilled labour, better transport system managed by the industry can facilitate matters.

Thus, we see that small-scale and large-scale industries both have certain advantages to their credit. The best arrangement is to have a mixture of both. Small industry is labour intensive and can generate more employment. Large industry is suitable for manufacturing heavy machine. Even then, in an overpopulated country like India, greater emphasis should be laid on small industry in order to provide employment to more and more people. Even then when all is said and done, it has to be noticed that the process of globalization has thrown veritable challenges before small industry. The gigantic multinationals with their global operations cannot work with small scale units. Larger and still much larger ventures have become the need of the hour. Nevertheless for augmenting family incomes and providing employment to the less qualified persons, small scale units including cottage industries still remain relevant enterprises particularly in those countries whose populations are rising fast.

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