Page 224 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Unit 14: Sickness in Small Business Enterprises

Notes
Similarly interesting accounts exist concerning other sectors, such as the clock industry,
which developed in parallel with sericulture and which contributed to establishing the
habit of punctuality among farmers, an important element in the foundation of
modernization. Also important were the early glass industry, the eyeglass industry and
the development of bicycle industry technology.
Regrettably and surprisingly, the third world participants in our discussions showed no
interest in the fact that an industry like the bicycle industry, though there are fewer
component parts than in the watch industry, for example, could be used as a technological
indicator if all parts are manufactured domestically as was true in India. The complete
domestic production of bicycles when combined with engine technology, constituted the
precondition for motor-cycle technology. The bicycle was useful as an index of
technological convergence in India, and, as such, could be considered the first gateway for
a newly industrializing country. High-quality ball-bearing manufacturing, in particular,
is a good index.

After ensuring that the product will meet the needs of its intended market, and after
carrying out world-wide market research to locate reliable suppliers of the most cost-
efficient parts, bicycle production may be undertaken at much less cost than what is
required to import finished bicycles, and there will be a larger market for these less-
expensive bicycles than for imported finished bicycles. As with watches, technology in
bicycles in India started with repairs and the production of replacement parts. Those
engaged in bicycle repair (and production) were former blacksmiths, lathe operators,
pump makers, and makers of Indian watches.

The Transformation of Technology in the Process of Industrialization
Industrialization, especially the process from technology transfer to self-reliance, should
be a process accompanied by transformation. This may be called the adolescent period of
technology transplantation.
The degree of technology transformation ranges from a single machine in operation to
the change of an entire system. One of the most rudimentary examples can be found in the
first British spinning machine India imported. The machine had been designed to fit the
height of British workers; consequently, because Indian workers were shorter, they could
use it only by looking upward and stretching their arms, which tired them quickly and
diminished their efficiency. The mere installation of a footstool solved the problem,
reducing worker fatigue and increasing productivity. Such a minor modification can
sometimes greatly enhance efficiency and induce extremely important results.
Questions
1. Discuss the problems faced by button manufacturers in India.
2. How did the transformation of technology took place?

Source: Adapted from http://archive.unu.edu/unupress/unupbooks/uu36je/uu36je0e.htm

14.4 Summary

A sick industrial unit may be defined as one where it fails to generate surplus on a
continuous basis and depends upon frequent infusion of external funds for its survival.

The Sick Industrial Companies Act 1985 identifies sickness in terms of cash losses for two
consecutive financial years and accumulated losses equaling or exceeding the net worth of
the company at the end of the second financial year.

LOVELY PROFESSIONAL UNIVERSITY 219