Page 220 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Managing Human Element at Work

Notes 9.4.4 Large Sickness

There are two main issues in respect of sick SSIs:
(i) Existence of a large number of sick units which are non-viable; and
(ii) Rehabilitation of potentially viable units.

9.4.5 Several Difficulties
It is obvious that these industries, despite their importance in the economy, are not contributing
to their full towards the development of the country along the desirable lines. It is because
these are beset with a number of problems concerning their operations. These may be
described as under:
• Inadequacy of finance: A serious problem of these industries is in respect of credit both
for long-term and short-term purposes. This is evident from the fact that the supply
of credit has not been commensurate with their needs associated with fixed and
working capital.
• Difficulties of Marketing: These industries are also against the crucial problem of
marketing their products. The problem arises from such factors as small scale of
production, lack of standardization, inadequate market intelligence, competition from
technically more efficient units, etc. Apart from the inadequacy of marketing facilities,
the cost of promoting and selling their products too is high.

• Shortage of Raw Materials: Then there is the problem of raw materials which continues
to plague these industries. Raw materials are available neither in sufficient quantity,
nor of requisite quality, nor at reasonable price. Being small purchasers, the producers
are not able to undertake bulk buying as the large industries can do. The result is —
buying whatever is available, of whatever quality and at high prices.
• Low-level Technology: The methods of production, which the small and tiny enterprises
use, are old and inefficient. The result is low productivity and high costs. There is little
of research and development in this field in the country. There is almost no agency
to provide venture capital to cover risks associated with the introduction of new
technologies.
• Competition from large-scale industries: Another serious problem, which these industries
face, is that of competition from large-scale industries. Large-scale industries, organized
as they are on modern lines, using latest production technology and having access to
many facilities, can easily outsell the small producers.

Visit any small group organization and prepare report on working
environment.

9.5 Typical Problems Faced by Small Businesses Organization

Small scale industries are at a distinct disadvantage as compared to large scale industries.
The scales of operations, availability of finance, ability to use modern technology, procurement
of raw materials are some of these areas. This gives rise to several problems. Most of these
problems can be attributed to the small size of their business, which prevents them from
taking advantages, which accrue to large business organisations. However, the problems
faced are not similar to all the categories of small businesses. For instance, in the case of
small ancillary units, the major problems include delayed payments, uncertainty of getting

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