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Student's Book Form Five
Operations: Medium-sized businesses is easier compared to large businesses
employees are divided into different since management and employees are
sections of operations like production, closer due to its smaller size. This enables
marketing, finance, information technology, information to flow smoothly and problems
procurement, and human resources that are addressed timely by people working
lead them to perform the assigned duties together as a team.
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or activities. Enhances growth of the economy:
Proprietorship: Medium-sized businesses Medium-sized businesses contribute to
may be owned by an individual, groups the country’s economic growth through
of individuals, family members as well as payment of different taxes which are used
the public who have a common interest to in the provision of public services. They
ensure pre-determined goals are achieved. also facilitate the supply of products for
Generally, medium-sized businesses are consumption, boost exports, and enable
businesses whose number of employees investment in other economic sectors.
and capital invested fall under well-defined Cost effectiveness: Medium-sized
limits depending on a country’s SME businesses are likely to have lower
policy. operational costs compared to large
businesses due to their scale of operations.
Importance of medium-sized businesses This enables them to have proper allocation
The following are the importance of the of resources and efficiency in business
medium-sized businesses: operations and management.
Creates employment: Medium-sized Easy access to resources: Medium-sized
businesses employ a relatively large businesses have better access to resources
number of people to carry out various including finance compared to small
business activities. The number of people businesses. Such access facilitates medium-
employed is usually large compared to sized businesses to grow and pursue more
small businesses. For example, in Tanzania business opportunities to foster optimum
medium enterprises employ from 50 to 99 business performance.
people.
Closer relationship with customers:
Faster decision-making: Medium-sized Medium-sized businesses can provide
businesses decisions can be made by a satisfactory customer services than larger-
single person or group of persons unlike sized businesses due to their smaller
large enterprises. This enables the customer base. They have the capacity to
businesses to reach conclusions on various develop strong personalised relationships
matters timely. with customers, understand their demand
Easy sharing of information: Medium- and receive unique feedback from them.
sized businesses communication process
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