Dagocdoc, Tandag City, Surigao Del Sur Telefax: (086) - 211 - 3046

Saint Theresa College of Tandag, Inc.
Dagocdoc, Tandag City , Surigao del Sur

Telefax : (086) 211 3046
http://www.stctandag.edu.ph
____________________________________________________________
Comparative Effects Between Small Scale

Business and Large Scale Business
in Tandag City
A Thesis Proposal
Presented to the College of Accountancy
SAINT THERESA COLLEGE
Tandag City, Surigao del Sur
In Partial Fulfillment of Requirements

Practical Research 1
Gopita, Julius A.
Bagcat, Jeff Jeansen G.
Naret, Denie Ann N.
Cedron, Jerlyn G.
Acedilla, Mary Mar Q.
Fabor, Shairaah M.
Researchers
May 2017
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____________________________________________________________
APPROVAL SHEET
This study entitled, Comparative effects

between Small Scale Business and Large Scale Business
in Tandag City prepared and submitted by, Julius A.
Gopita, Jeff Jeansen G. Bagcat, Denie Ann N. Naret,
Jerlyn G. Cedron, Mary Mar Q. Acedilla and Shairaah M.
Fabor in partial fulfillment of the requirement in
Practical Research 1 is hereby recommended for
approval and acceptance.
ANECITO P. AMBRAY, Ph. D.

Research instructor
PANEL OF EXAMINERS
Approved by the committee in Thesis Proposal on May

2017 with the Grade of
Accepted and Approved in Partials fulfillment of the

requirements in Practical Research 1.( Basic Research)
ANECITO P. AMBRAY, Ph. D.
Research instructor
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____________________________________________________________
AKNOWLEGEMENT
Special thanks and sincere appreciation to the

following person who have helped the researchers in
the realization of this study.
To our adviser Mr. Anecito P. Ambray, Ph. D. who

gave us all inspiration to accomplish this
requirements.
To our beloved parents, brothers, sisters,

relatives and friends for their moral, spiritual,
financial support and for encouraging to bring out the
best in us.
And above all, to God, for his bountiful

blessings in all ways, peace of mind, kindness and
guidance throughout the research and wisdom bestowed
on us as we accomplished our studies.
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DEDICATION
With pure and humble heart, the researcher

dedicates this work to the people who have contributed
much to make this study accomplished.
To our loving family for their unending support

with love , joy and care also for giving inspiring
advices and financial that could marked deep in our
heart.
To our almighty God for his grace and protection.

Around for all our problems He is the most ultimate
guidance of which we believe that He is the one behind
in our accomplishment.
Researchers
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TABLE OF CONTENTS
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CHAPTER 1
THE PROBLEM AND ITS SCOPE
Background of the Study
Small-scale businesses or industries hold an
important position in rural set-up. Most villages are
self-sufficient in the basic necessities of life. They
have their own sari-sari stores, mini
groceries, blacksmiths, craftsmen etc. These small
scale industries have also gained immense importance
in cities and towns.
Unfortunately, programs designed to benefit all
business, like the investment tax credit, tend to
primarily benefit larger firms (Berney, 1979). This is
the case for two reasons. First, there is a basic
difference in production relationships: large firms
tend to be more capital intensive and small firms more
labor intensive. Second, the more complex a rule or
regulation, the more costly it is for small business
to use it. Consequently, even the employment tax
credit, which should benefit the small firm is not

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used by them. Instead, it tends more to benefit the
larger firm.
Farming and fishing are the main economic activity
for most of the people in Tandag. Chief farm products
are rice, corn, and coconut. Livestock and poultry
raising are also important sources of income. Tandag
has a national secondary airport and a seaport. So,
how will small scale look like And how it affects in
large business nowadays (Jollibee and Gaisano)? Is
there good and bad effects of competition between
small scale and large scale in Tandag City?
As accountancy students, we are interested to
conduct this study. This study acts as a guide for
future market researchers on how they will implement
and develop new policies in business areas especially
those affecting small scale industries.

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____________________________________________________________
Theoretical Framework
A number of public policy issues have been discussed
in this framework , the most important of which are:
First, small business would not need special
consideration if our economy were basically a
competitive one. Second, A large and growing segment
of our economy has sufficient market and political
power to make our economy basically non-competitive.
Third, small firms tend to provide price competition,
to lead in the development of new products and
processes, and to generate new innovations and new
employment. Fourth, government policy tends to create
artificial economies of scale, giving an unwarranted
advantage to the very large firm (Berney & Owens,
1979).
As a first approximation, a policy of government
neutrality on firms of varying size is needed. But,
because of discriminations which already exist which
favor large firms over small firms, special small
business programs may be necessary to provide an
equitable policy base (Berney, 1979).

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Neutrality, as a governmental policy, would appear
to demand different treatment for firms of varying
size. As an example, the regulatory flexibility
concept applies different standards to different sized
firms so that the burden of regulation is more
equitably distributed. The concept of encouraging or
requiring financial institutions and other lenders to
establish dual prime rates is a further example.
Since small firms appear to have much higher debt to
equity ratios and rely more heavily on shorter-term
bank credit, they are more heavily burdened by a tight
money policy which forces increases of interest rates.
Thus, dual prime rates help to spread the burden of
rising interest costs more equally.
Based on the Theory of Business Enterprise, the
growth of industrial processes was certainly
conquering the small business firms that had evolved
earlier to organize craft production on a disjointed
and small scale. Prior to these industrial concerns
the only businesses that required significant
investments were in shipping across oceans. And the

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only organizations with a pure business motivation
were banking and merchant firms who dealt mainly with
loaning, buying and selling (Veblen, 1904).
While Asian and Hispanic businesses more approximate
nonminority businesses in the sources of capital, the
cost of capital, total capital investment, and access
to capital. Black firms, on the other hand, face
credit discrimination from all sources of capital,
which limits their access to capital, increases its
cost, and affects firm profitability. Consequently,
black firms have a smaller capital composition at
startup and during operations. The only deviation from
this pattern occurs where minority and nonminority
financial institutions vie for black business
patronage by reducing the cost of borrowing and
increasing the availability of funds (Chen, G.M. &
Cole, J.A., 1988).

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Conceptual Framework
The present study is premised on the concept of

the competitive effects between small and large scale
businesses in Tandag City.
The schema of this study is started with the

collection of information from selected respondents by
means of random sampling and determining the profile
and their views toward the competitive effects between
small scale and large scale businesses in Tandag City.
The schema of this study is started with the
collection of information from selected respondents by
means of random sampling and determining the profile
and their views toward the competitive effects between
This study is contained outputs; identification and
classification of competitions between small scale and
large scale industries, which will be helped us to
lessen the gap and provided awareness if there are bad
impacts to our economic growth

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____________________________________________________________
Respondents Identification, Identification,

Profile Classification
Classification
& Views Toward and Awareness of of Competitions
Competitive between Small
Different
Effects Competitions and Large Scale
Between Small between
Industries,
Scale Business Small and Large which help to
and Large Scale
lessen
Scale in Businesses in the gap and
Tandag City Tandag City
provided
awareness if
there are bad
impacts to our
economic growth.
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Statement of the Problem
The study investigates the comparative effects

between small scale and large scale businesses in
Tandag City. The general objectives of the researchers
are intended to identify and classify the competitions
happening today between two different scales in
businesses.
Specifically, the study sought to answer the

following:
1. What is the profile among the respondents based on

1.1 Age
1.2 Sex
1.3 Civil Status
1.4 Economic Status (Income)
1.5 Timeline of Business
2. What are the points of comparison competition

between small scale and large scale in Tandag City
according to:
2.1 Advantages
2.2 Disadvantages
3. To what extend are respondents aware in terms of bad

impacts in the economic growth in Tandag City?
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4. What are the problems encountered and the degree of
seriousness?
5. From the findings of the study, what measures can be

proposed to minimize the effects of small Scale
business.
Significance of the Study
This study undertaken by the researchers and
provided additional benefits to its beneficiaries in
whom these are also dedicated. This research has its
significant contributions and intended to the
following:
Market Analysts. This study provides information
about the competition events between small scale and
large scale industries in Tandag City. This study also
give profile of the business types. This will be act
as guide for analyzing the effects and impacts of
competition between two type scales in Tandag City.
Businessmen. This study serves as a basis of
awareness and educational materials for those who
wants to build their own businesses. It provides

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____________________________________________________________
information about the advantages and disadvantages of
competitive effects between two type scales business
in Tandag City.
Economists. This study encourages the economists to
have deeper understanding about the function of
competition in business areas and their impacts to
economic growth of a city. By this study they come up
with easier and applicable techniques that will
contribute for the development of our nation.
Future Researchers. The study benefits the future
researchers as their references. The study is also
opened in development of this study.
Scope and Limitation
The scope of the study is limited to those
respondents whose selected by means of random sampling
based on their business profile. The researchers will
make a standard questionnaire which referred to the
internet and it will be modified. This will be
distributed to the different businessmen in Tandag
City. The results of this study provides information

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and understanding about the function of business
competition in small and large scale industries.
Definition of Terms
The following terms were defined conceptually and
used in the study:
Business Competition is the rivalry among sellers
trying to achieve such goals as increasing profits,
market share, and sales volume by varying the elements
of the marketing mix: price, product, distribution,
and promotion.
Small Scale Business are privately
owned corporations, partnerships,or sole proprietorships that
have fewer employees and/or less annual revenue than a
regular-sized business or corporation.
Large Scale Business. This business involves large
scale corporate
controlled financial or business activities. As a
term, it describes activities that run from "huge
transactions" to the more general "doing big things".

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CHAPTER 2
RELATED LITERATURE AND STUDIES
Related Literature
Free and open competition among providers of
goods and/or services in order to satisfy the wishes
of consumers is the basis of the American economic
system. To survive, let alone prosper, in this
environment a provider must offer more appealing goods
and/or services than other providers, not in every
instance but in enough instances to generate adequate
profit for the owner.
Small-businessmen and women understand this
imperative when they establish their firms, or they
learn it very quickly thereafter. Because the system
is open, many people and institutions try to enter.
Small-business owners, therefore, find themselves in
an environment that not only includes many similar
entities, but government-sized private enterprises,
governments, publicprivate structures, and
organizations of all types and sizes in between. In
this milieu, the individual business owner must find a

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place. To do so, the owner must focus resources and
explicitly or implicitly develop a strategy to give
his enterprise a competitive advantage over others
(Dennis, 2003).
Competition is central to the operation of
markets, and fosters innovation, productivity and
growth, all of which create wealth and reduce poverty.
However, markets do not always work well, and
uncompetitive markets are often those that matter most
for the poor. This paper outlines the direct and
indirect, and often complex, linkages between
competition, competition policy, private sector
development, growth and poverty reduction. The
existence and importance of these linkages is still
not sufficiently recognized in the developing world
(Godfrey, 2008).
The competitive climate, competitors, and most
importantly customers help shape a successful
strategy. Government helps also by setting the basic
competitive rules. Due to the critical importance of
competition in every small firms survival and growth,

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this issue of the National Small Business Poll
addresses competition, including the competitive
climate, the competitors, and the competitive
strategies that smallbusiness owners pursue (Dennis,
2003).
In Asia the importance of competition policy as a
crucial component of a good business environment, and
for stimulating further growth, was a key focus of the
Asian Development Banks flagship publication, Asian
Development Outlook 2005. Competition policy was also
Department for International Development, London OECD
Global Forum on Investment, March 2008 6 highlighted
as a key plank in a good investment climate in the
recommendations of the Asia 2015 Business Action in
Asia conference in 2006.
According to Edmiston, economic development
experts are abandoning traditional approaches to
economic development, that rely on recruiting
largeenterprises with tax breaks, financial
incentives, and other inducements. Instead, they are
relying on building businesses from the ground up and

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supporting the growth of existing enterprises. This
approach has two complementary features. The first is
to develop and support entrepreneurs and small
businesses. The second is to expand and improve
infrastructure and to develop or recruit a highly
skilled and educated workforce. Both efforts depend in
large part on improving the quality of life in the
community and creating an attractive business climate.
Related Studies
A recent study of new-firm locations and
expansions in Georgiasuggests that, on net, the
location of a new large (300+ employees) firm often
retards the growth of the existing enterprises or
discourages the establishment of enterprises that
would otherwise have located there (Edmiston).
Specifically, the location of a new plant with 1,000
workers, on average, adds a net of only 285 workers
over a five-year period. That is, the average firm
would add 1,000 workers in its own plant but would
also drive away 715 other jobs that would have been
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generated (or retained) if the new large firm had
chosen not to locate there. Another recent study
suggests that the net employment impact of large-firm
locations may actually be closer to zero (Fox and
Murray).
Analysts have explored many other possibilities.
But even after controlling for variables such as
collar color, union status, plausibility of a union
threat, and industry makeup, researchers have been
unable to explain away the persistent firm size-wage
effect (Brown and Medoff ). The relationship persists
even for piece-rate workers and for workers moving
across different-sized employers. In 1989, Brown and
Medofffinally concluded: Our bottom line is that the
size-wage differential appears to be both sizable and
omnipresent; our analysis leaves us uncomfortably
unable to explain it, or at least the part of it that
is not explained by observable indicators of labor
quality.
Other theories to explain the size-wage effect
have surfaced since the Brown and Medoff study, some
of which have empirical support. Among these are

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theories suggesting that larger employers may make
greater use of high-quality workers. This might occur,
for example, because larger firms are more capital-
intensive and require higher skilled ,employees to
operate the plant and equipment. Empirical data seem
to bear this out, as 25.5 percent of workers at larger
firms in 1998 had a bachelors degree or higher,
compared to 20.3 percent at smaller firms (Headd).
Further, some argue that workers at large firms have a
greater incentive to gain additional education and new
skills because of greater opportunities for upward
mobility (Zabojnik and Bernhardt). Others suggest that
because employee monitoring is more costly at larger
firms, these firms pay higher wages to deter shirking
on the jobbut this explanation is not supported by
the data (Oiand Idson). Another possibility is simply
that the larger scale of larger firms in some
industries means lower costs (Pull; Idson and Oi). Or
perhaps less stable employees, who are likely to have
lower wages, are attracted to small firms (Evans and
Leighton; Mayo and Murray).

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The effects of increasing import competition on
the exit of heterogeneous domestic .Firms are
investigated, both at the theoretical and empirical
level. Within the context of an oligopolistic rivalry
model, marginal cost(Colantone, Coucke&Sleuwaegen,
2010)..
Flexibility and product differentiation with
respect to the imported goods are shown to lower the
displacement effect from international competition,
thus helping firms to survive. Both results point to
small. Firms as being in a relatively favorable
position with respect to their larger competitors, as
industries adjust to increasing import penetration
(Colantone, Coucke&Sleuwaegen, 2010).
Local
Like those in other countries, SMEs in the Philippines
make significant contributions to the overall economy
and the country's pursuit of economic development.
Data show Filipino SMEs to make up more than 99% of
all businesses in the country, provide more than two-
thirds of the country's employment, and is responsible

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for almost one-third of the country's income
(Philippine Department of Trade and Industry, 2003).
Given their economic importance (others also highlight
their social significance), Filipino SMEs are an
interesting subject of study. Consequently, one would
expect to find numerous studies on them. This,
however, is not the case, most probably because of a
number of issues that complicate their study.
One of these issues has to do with the different
perspectives on different aspects related to SMEs.
Depending on which perspective the researcher uses as
the primary source of insight and information, one
gets a very different picture. In the study of
Filipino SMEs, at least 3 different perspectives could
be identified: that of policymakers, SME owners,
academician and scholars.
In Philippines, government support to SME looks very
good on paper. Specific legislation (Republic Act
6977: Magna Carta for Small Enterprises, signed in
1991; amended as Republic Act 8289 in 1996),

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institutions (such at the Department of Trade and
Industry/Bureau of Small and Medium Business
Development, University of the Philippines-Institute
for Small-Scale Industries, and institutions that
provide credit or credit guarantee to SMEs);
publications give the impression that the government
pays careful attention and takes sufficient action to
encourage SMEs. That the government would purposely
choose to give such impression is not surprising for a
number of reasons.
First, there is a "bandwagon effect". Since other
countries in the region and elsewhere have similar
programs (again, at least on paper), the Philippines
or for that matter any other country would look very
bad should it choose not to have an SME program.
Second, because it is difficult to deny how important
SMEs are as an effective means to achieve both
economic and social goals, no government would choose
to appear unsupportive of SMEs.
Third, the government might also have a tendency to

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"maximize external support", including those provided
by international organizations to support SME
development. To the extent that these programs allow
the government access to resources (often, financial
and technical) whose use could not be perfectly
monitored, acting in a way to attract these resources
give the impression of being supportive of SMEs.
In reality, however, policymakers' intention to assist
SMEs tends to be less than genuine. "Conflict of
interest" among government officials gets in the way.
Since a number of policymakers are linked to large
enterprises by ownership or production relation
(either as supplier or customer), one would expect
policymakers to use their political influence to
channel support toward their own commercial interests
and away from SMEs.

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CHAPTER 3
RESEARCH METHODOLOGY
This chapter contains the discussion of Research
Design, Study Site, Sampling Design, Respondents,
Survey Questionnaire, and Statistical Treatment of
Data.
Research Design
The researchers will use the descriptive
correlation method. This design investigates the
understanding about the competitive effects between
This will be done by giving of questionnaires and
interviews. It will determine the relationship between
the respondents information and data gathered from
the internet.
Research Locale
The researchers choose Tandag City as best study
site due to its potentiality and since it is a
provincial capital of Surigao del Sur. A nice site for
conducting research and good for understanding more

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about the business competitions between two different
type of scales since Tandag is a new city in the
Philippines. City of Tandag is located along the
northeastern coast of Mindanao Island facing the
Philippine Sea. It is bounded on the north by the
municipalities of Cortes and Lanuza, on the east by
the Philippine Sea, on the south by the towns
of Tago and San Miguel, and on the west by the
province of Agusan del Sur.
Location within the Philippines

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Coordinates: 0904N
12611ECoordinates: 0904N
12611E
Country Philippines
Region Caraga (Region XIII)
Provinc Surigao del Sur

e
Distric 1st district of Surigao

t del Sur
Cityhoo 23 June 2007

d
Figure 3: Map of Tandag City, Surigao del Sur
Sampling Design
The researchers will use a simple random sample,
this sampling is a subset of individuals (a sample)
chosen from a larger set (a population). Each
individual is chosen randomly and entirely by chance,
such that each individual has the same probability of
being chosen at any stage during the sampling process,
and each subset of k individuals has the same
probability of being chosen for the sample as any
other subset of k individuals. This process and
technique is known as simple random sampling, and
should not be confused with systematic random

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sampling. A simple random sample is an unbiased
surveying technique.
Respondents Role
The respondents are able to understand the
importance of their role in the completion of this
study. The respondents are also advised that they
could withdraw from the study even during the process.
With this, the participants are not forced to
participate in this research work.
The confidentiality of the respondents are also
ensured by not disclosing their names or personal
information in this research work, Only relevant
details that answered in research questionnaire are
included.
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Survey Questionnaire
The study will use a researchers-made test and then,
it will determine the advantages and disadvantages of
competitions between small scale and large scale
businesses and also features the respondents views
toward awareness.
The questionnaire composed of three parts; the first
part is the basic profiles of the respondents. In this
part, the respondents are required to give some
general information about their demographic background
and timeline of their business.
Second, the advantages- and- disadvantages set of
questions, this test is to identify and classify the
business competitions that we mostly found and observe
in Tandag City. This is a checklist type formed test
and composed of varied questions.
Lastly, the third part of the questionnaire is all
about awareness and responses among the selected
respondents toward the business competition that
mostly experienced by business owners.

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Statistical Treatment
The researchers will use likert scale to obtain
participants preferences or degree of agreement with
a statement or set of statements. Likert Scales are
non-comparative scaling technique and one dimensional
in nature (only measure a single trait). Respondents
are asked to indicate their level of agreement with a
given statement by way of an ordinal scale (Likert,
1932).
References:
1. Veblen, Thorstein (1904). The Theory of the

Business Enterprise. New Brunswick, New Jersey:
Transaction Books. p. 62. ISBN 0-87855-699-0.
2. Jump up^ Veblen, Thorstein (1904). The Theory of
the Business Enterprise. New Brunswick, New
Jersey: Transaction Books. ISBN 0-87855-699-0.
3. Chen, G.M. & Cole, J.A. Rev Black Polit Econ
(1988) 16: 111. doi:10.1007/BF02892168
4. Robert E. Berney, Ed OwensJune 1985Full
publication history DOI: 10.1111/j.1541-
0072.1985.tb01606.x View/save citation
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Saint Theresa College of Tandag, Inc.

Dagocdoc, Tandag City , Surigao del Sur

Comparative Effects Between Small Scale

In Partial Fulfillment of Requirements

Bagcat, Jeff Jeansen G.

Naret, Denie Ann N.

Acedilla, Mary Mar Q.

This study entitled, Comparative effects

ANECITO P. AMBRAY, Ph. D.

Approved by the committee in Thesis Proposal on May

Accepted and Approved in Partials fulfillment of the

ANECITO P. AMBRAY, Ph. D.

Special thanks and sincere appreciation to the

To our adviser Mr. Anecito P. Ambray, Ph. D. who

To our beloved parents, brothers, sisters,

And above all, to God, for his bountiful

With pure and humble heart, the researcher

To our loving family for their unending support

To our almighty God for his grace and protection.

THE PROBLEM AND ITS SCOPE

Background of the Study

Small-scale businesses or industries hold an

important position in rural set-up. Most villages are

self-sufficient in the basic necessities of life. They

have their own sari-sari stores, mini

groceries, blacksmiths, craftsmen etc. These small

scale industries have also gained immense importance

in cities and towns.

Unfortunately, programs designed to benefit all

business, like the investment tax credit, tend to

primarily benefit larger firms (Berney, 1979). This is

the case for two reasons. First, there is a basic

difference in production relationships: large firms

tend to be more capital intensive and small firms more

labor intensive. Second, the more complex a rule or

regulation, the more costly it is for small business

to use it. Consequently, even the employment tax

credit, which should benefit the small firm is not

Farming and fishing are the main economic activity

for most of the people in Tandag. Chief farm products

are rice, corn, and coconut. Livestock and poultry

raising are also important sources of income. Tandag

has a national secondary airport and a seaport. So,

how will small scale look like And how it affects in

large business nowadays (Jollibee and Gaisano)? Is

there good and bad effects of competition between

small scale and large scale in Tandag City?

As accountancy students, we are interested to

conduct this study. This study acts as a guide for

future market researchers on how they will implement

and develop new policies in business areas especially

those affecting small scale industries.

A number of public policy issues have been discussed

in this framework , the most important of which are:

First, small business would not need special

consideration if our economy were basically a

competitive one. Second, A large and growing segment

of our economy has sufficient market and political

power to make our economy basically non-competitive.

Third, small firms tend to provide price competition,

to lead in the development of new products and

processes, and to generate new innovations and new

employment. Fourth, government policy tends to create