This paper has argued that an industrial organization based on economic justice, democratic decision process, and productive employment of labour embodied in Labour-Efficient Firms (organized, managed and owned by workers themselves) can do a better job in producing greater amounts of output and income than the purely capitalist firms. It has also been shown that the supply response of such firms will be upward sloping in most of the cases. However, the development of such firms will lead to stiff competition with the traditional capitalist firms, and hence the society will benefit in terms of greater supply of outputs, reduced prices and greater volume of employment. A development strategy, designed especially in labour surplus economic activities through such firms, has the potentiality to achieve full employment in a shorter span of time than a purely capitalist development process may take.