SMALL VS LARGE BUSINESSES

Question 1

Advantages of Small Businesses

Answer 1

• Owner has control
• Ability to offer specialized services
• Better employee - worker relationship
• Faster decision making

Question 2

Disadvantages of Small Businesses

Answer 2

• Can’t afford specilized managers. Therefore no benefits from division of labour.
• No economies of scale
• Lower access to finance

Question 3

Advantages of Large Businesses

Answer 3

• Can employ specialized managers and therefore have benefits from increased efficiency due to division of labour.
• Economies of scale
• Access to varius sources of finance

Question 4

Disadvantages of Large Businesses

Answer 4

• Diseconomies of scale
• Difficult to manage and control
• Can’t offer personalized services because the business is standarized.
• Slower decision making.