Advantages of Modernization
(I) Modernization improves the productivity and efficiency of the firm.
(ii) The profitability of the firm goes up because of increased efficiency and reduced wastages.
(iii) It makes available better quality products to the customers.
(iv) The firm becomes more competitive in the long-run because of modernization.
(v) The growth is systematic and does not affect the normal functioning of
(vi) The workers acquire modern skills because of which their wages go up.
However, the strategy of modernization can be used only if the firm has adequate capital through accumulated savings or is able to raise capital from different sources for the acquisition of modern plant and machinery. Modernization will actually serve its purpose only if the workers are adequately trained in the new method of production.
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