THE RELATIVE EFFICIENCY OF LARGE, MEDIUM-SIZED AND SMALL BUSINESS.
Now that the U.S. Federal Trade Commission and the Department of Justice have become more active in their attack upon big business, it seems appropriate to analyze the relative efficiency of large-scale enterprise. The existence of this efficiency has been accepted by certain business groups and set forth as one if not the major justification for the continuance of such large corporations, while evidence to the contrary has been seized, at times enthusiastically and rather uncritically, as sufficient reason for demolishing the giants. Efficiency is a word which is used more often than it is understood. Perhaps this is because it can be employed in different ways which do not have a common meaning. As an economic term efficiency is necessarily related to cost, and that business is most efficient which has the ability to produce and market goods or services at the lowest cost possible under the environmental circumstances lacing the management. It should be quite obvious that comparability as to external circumstances is of primary significance. When businesses are operating under such conditions it is reasonable to conclude that the one with lowest cost is the most efficient. This low cost, however, is significant only if continued for a period of years, so that it is clearly based on efficiency of operation rather than on some unusually fortunate circumstance or accounting adjustment.
- DOI
- 10.2308/tar-7065569
- Volume
- 25 (3)
- Pages
- 262-273
- Language
- en
- Export
- BibTeX
- Sources
- openalex crossref