Page 225 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

Notes Small-scale industries (SSIs) continue to play a significant role in industrial activity.
SSI sector in India creates the largest employment opportunities for the Indian populace,
next only to agriculture.

The promotional and protective policies of the government have ensured the presence of
this sector in an astonishing range of products, particularly in consumer goods.

The external causes are beyond the control of the industry, and usually effect the industry
group as a whole.
Internal causes are within the control of the industry.

A mismanaged unit is, in fact, a sick unit. Management must be intelligent, brilliantly
capable, decisive, innovative, very efficient and assuring.
Most of the sick units suffer from inefficient marketing management.

Sickness in the human body can be treated easily in the early stages – at the time the
symptoms first strike – but when they are in an advanced stage, they may prove to be fatal
or may defy all treatment.

Rehabilitation of a sick unit comes under process only after the viability study of the
concerned small unit recommends for its revival along with the suggested reliefs or
packages or any other way out.

14.5 Keywords

Capital Intensive: A business process or an industry that requires large amounts of money and
other financial resources to produce a good or service.
Industrial Sickness: Industrial sickness is defined in India as “an industrial company (being a
company registered for not less than five years) which has, at the end of any financial year,
accumulated losses equal to, or exceeding, its entire net worth and has also suffered cash losses
in such financial year and the financial year immediately preceding such financial year”.
Information System: It is any combination of information technology and people’s activities
that support operations, management and decision making.
Lacunae: An unfilled space or interval; a gap.
Marketing: The action or business of promoting and selling products or services.

Overtrading: Engage in more business than can be supported by the market or by the funds or
resources available.
Procurement: Procurement is the acquisition of goods, services or works from an external source.

Sick Industrial Companies Act, 1985: 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.
Sick Industrial Unit: 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.
Small-scale Sector: It is significant to the realisation of the socio-economic objectives of growth
in employment and exports, fostering entrepreneurship and ensuring industrial dispersal.

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