2. Concept:
Size of business refers to the scale of
operations and it is important because it
affects the cost operations and inputs required.
• Total Assets
• Capital Required
• Number of workers employed
• Capacity of plants
• Quantity of materials
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3. Factors Affecting Size of Business
1. Type of industry
2. Nature and variety of product
3. Size of the market
4. Capital requirements
5. Ability and policy of owners
6. Cost of transport
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4. Factors affecting Location Decisions
1. Availabilty of raw materials
2. Proximity to the market
3. Labour supply
4. Transportation and Communication
5. Power and fuel
6. Climate and topography
7. Momentum of an early start
8. Supply of capital
9. Government policy
10.Strategic considerations
11.Miscellaneous
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5. Urban Location
Advantages Disadvantages
Good transport & communication High cost of land and building
Availabilty of skilled labour High wage rates
Easy availability of power High taxes
Good drainage system Over crowding
Well developed markets Strict legal restrictions
Health, education, other amenities Strong trade unions
Pollution
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6. Rural Location
Advantages Disadvantages
Easy availabilty of land Shortage of skilled labour
Low cost of land & buildings Poor transport and communication
Low wage rates Irregular power supply
Abundant supply of unskilled Inadequate banking, insurance
labour and postal services
Pollution free environment Absence of basic amenities
No over crowding
Tax Incentives
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7. Need for Government Policy
Balanced Regional Development
1. To reduce regional disparities
2. To provide employment opportunities
3. To ensure optimum utilisation of local resources
4. To improve living standards in backward areas
5. To avoid social problems like slum, over crowding.
6. To safeguard industries against external attacks
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8. Policy measures by Government
Positive Approach – Encouraging the setting of
Industries in backward areas to achieve balanced
Regional development.
Negative Approach – Restraining further concentration
Industries in already developed areas.
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9. Industrial Estates
An institutional arrangement for building up
basic infrastructure and common service
facilties for development of industrial units.
Hence, its a planned clustering of industrial units
Offering standard factory accomodation and variety of
Services and facilties to occupants.
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