Efficiency of Large Scale Units and Small Scale Units – A Comparative Study

The core of any economic activity, whether it is consumption or production or anything else, is to strive for the maximum possible efficiency. The term ‘efficiency’ is widely used, but it is quite difficult to put it into a precise framework of definition. In any sphere of activity, efficiency is ratio of results achieved to the means used. It is the ability of an individual or organization to produce the desired effect with the minimum of efforts, expenses or wastes. The state of efficiency shows the quality of skills and the degree of success achieved in performance of different operations and management of an enterprise. Industrial efficiency has many dimensions. The purpose of this paper is to assess the relative efficiency of large and small units. The final sample includes 98 small units, out of which 75 belongs to bicycle industry and 23 units belong to automobile industry. Area wise representation in the sample consists of Ludhiana (81 units), Malerkotla (7 Units), Nabha (8 Units) and Khanna (2 Units).