Page 223 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

Notes
worker “manufacturing” at home. Moreover, as far as possible, no machines or equipment
were used except those traditional tools and methods that demanded little in terms of
skill. The next step was to reduce the processing costs to an extremely low level. This was
identical to the business control exercised by the merchant over his scattered manufacturers.
The button manufacturers unified and managed their individual microprocessors in the
same way.
The simplification of work and the low processing costs did not lead to the independence
of the microprocesses, but rather promoted side jobs at home. What originally had been a
modern urban industry was transformed into an industry that depended on the labour of
lower-class urban citizens working at home. It then penetrated into suburban agricultural
areas in search of cheaper labour; the target was enlarged from the urban informal job
class to the rural informal job class. Although, in order to master the whole technology for
a basic production process (or several major processes), as opposed to a single, small
process, it was necessary that the worker become an apprentice of a “manufacturer,” those
who mastered the technology presented little threat of breaking away and becoming
independent manufacturers! as their products were component parts rather than finished
commodities.
The enlarged production of shell buttons brought profit to the merchant manufacturers.
The shortage of raw materials caused by greater production and the conversion to and
dependence on imported materials changed this situation, however. The sharp fluctuations
in the price of raw materials brought on speculation and hampered distribution. When to
this was added an increase in demand resulting from an economic boom, wholesalers and
manufacturers were no longer able to undertake strict inspection of goods, and, as a result,
the mass production of inferior-quality goods started. Holding down processing fees to
too low a level can lead to this sort of situation.
In general, since various regulations had done away with certain business restrictions, the
problem of the mass production of inferior-quality goods was seen in almost all the
traditional industries and technologies. The situation was the same for new technologies
that had been transformed into traditional-type technologies. When the change of raw
materials occurred, that is, the addition and development of new technologies, the old
structure of the business world had to be reformed. To protect the common interests in
each sector of business, the master-apprentice system of control had to be transformed -
democratized - into a system of control by an association.

The areas where rural industrialization developed were those in which commercialization
of agricultural production was advanced. For example, the cases taken up in this study
were in the western part of India, where cotton-growing and food-oil production had
been active. The development of a modern cotton-spinning industry brought about the
substitution of locally produced cotton with cotton imported from India, and the
development of a modern food-oil industry centred in urban areas, ruined the traditional
oil-making industry in this area.
Karnataka was another area where the button industry developed as a cottage industry
after the traditional salt making (by the salt-field method) and sericulture lost their viability.
The transition from the traditional salt-making and sericulture industries to modern button
manufacturing was possible because of the long experience with producing for a broad
market.
The successful and lucrative export of Christmas lights by farmers in during the chaotic
period immediately after World War II is another example of the sort of adaptability that
made possible the successful transition to new industries as the old ones lost their viability.
Contd...

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