15MBAP025- PRADEEP KUMAR.

BUSINESS ETHIC AND PLAN

The Personal and Infrastructural Problems of

Small Scale Entrepreneurs
Introduction

In a country like India where diversified classes of people dwell and many
remain unemployed and underemployed, the small scale sector has
emerged as a major source of employment, by creating more and more
employment opportunities per unit of Capital employed. SSI Sector
provides employment opportunities to 71 lakhs persons in the 1980-81. It
increased to 240.9 lakhs persons in the year 2000- 2001. Further it
increased to 287.6 lakhs persons and 299.91 lakhs persons in the year
2004-2005 and 2005-06 respectively. During the year 2006-2007 the SSI
provided employment to 312.5 lakh persons (Ministry of Micro Small and
Medium Enterprises, 2006-07).

Tamil Nadu a southern state in India has contributed much to the growth
of Small Scale Industries. There were 420 Small Scale Units in Tamil Nadu
in the year 2001-02 which further increased to 449 in 2002-03 and to 490
in 2004-05. There is always an increasing trend in the production also
(Tamil Nadu: An Economic Appraisal 2002-2003).

The Number of units Registered under SSI /MSME (Small Scale Industry /
Micro Small and Medium Scale Entrepreneurs) were 1272 units in Madurai
District of Tamil Nadu State in India and they have generated employment
to 6166 persons in the Year 2006-07 and further it is increased to 1384
SSI/MSME units which generated employment to 10,237persons in the
Year 2007-08 (DIC Madurai Directory of Industries). The sector which
produces a wide range of more than 7500 products has grown
phenomenally over the past five decades (Prasad and Seethamma, 2003).

Review of Literature

N. Thanuligom (1984), in his study titled, Small Scale Engineering

Industry in Coimbatore Region A study of Inter- Relationship with Large
Scale Industry, pointed out that the factors that influenced the
entrepreneurial development were previous experience in Industry,
favorable demand for product and location near the residence of the
entrepreneur. Y. S. Yoosuf Khan (1988) concluded that SSIs must be
compulsorily registered and entrepreneurs should follow the Government
rules and regulations.
K. Nirmala (1990), has examined sample of 100 small-scale industrial
units in Sattur Taluk. The study revealed that the development of
entrepreneurs must be increased and the successful entrepreneurs should
form an association to assist the budding entrepreneurs to solve their
problems.

Mithesh Kumar Mishra and Anup.K.Karan (1990) in their research paper

entitled Sickness in Small Industries: A case study stated that the two
major factors for the sickness of the Small Scale Industries were lack
ofadequate and timely working capital and lack of marketing facilities.
They found that lack of technical know- how, shortage of improved
machinery, labor problems, irregular power supply and erratic power cuts,
fluctuation in prices of raw materials and inadequate arrangements of
consultancy acted as checks on the growth of the units

P. D. Malgawakar (1993), in his study regarding the problems of small

industry in Andhra Pradesh, has found the lack of infrastructure as a
general problem. The scarcity of raw materials has been a serious
bottleneck. This study has found that the incentives provided by the State
and the Centre were not within the reach of all the entrepreneurs in Rural
areas.

C. Thilaka (1996) in her study A Study of Financing of select Small Scale

Industries by Commercial Banks in Tamil Nadu, stated that one of the
most important problems of Small Scale Industries was bank finance.
Restriction on term loan facilities to Small Scale Industries was a great
stumbling block in the promotion of these industries. She also found that
commercial banks met only 75 Percent of the requirements of the sample
Small Scale Industries. More than 60 Percent of the respondents
expressed their grievance that they had to visit the bank more than ten
times for getting the loan sanctioned.

R. Ponmurugan (1996) found the reimbursement of electrical charges and

industrial background of the family of entrepreneurs do not influence the
growth of Small Scale Industrial Units located in the Industrial Estates of
Tirunelveli Region.

Radha Dhandapani (1997 observed that out of 17 successful

entrepreneurs 58.82% have stated that shortage of working capital as
their No.1 Problem. 17.66% said high interest rate is their prime
problem.11.76% pointed out that shortage of fixed capital as their No.1
Problem. Among the 21 unsuccessful entrepreneurs 42.86 have stated
that shortage of working capital as their No.1 Problem. 23.81% said high
interest rate is their prime problem.14.29% pointed out that shortage of
fixed capital as their No.1 Problem.
Savitha Sethi (1998) has examined sample of 100 small scale units in
Madurai. The study revealed that the effort should be made to analyze the
problems regarding production, marketing and finance in small- scale
industries held by the small-scale entrepreneurs in and around Madurai.

K. Kamalakannan (1999) in his study Financing of Small Scale Industries

in Kamarajar District stated that the shares of the Nationalised banks,
private Commercial Banks, Pandian Gramina Banks, TIIC, and Co-operative
Banks, in providing assistance to the Small Scale Industries were 70.31
Percent, 8.49 Percent, 1.09 Percent, 5.41 Percent, and 14.70 Percent
respectively.

R. M. Nagammai (2001) studied institutional finance to small scale

industries in Madurai district and found that the compound growth rate of
investment in Small Scale Industrial Units from 1994-1999 was only 5.25
Percent per annum. An industry wise analysis of investment in SSI units
revealed that textiles, hosiery andreadymade garments and non metallic
mineral products showed a negative growth of investments in these
industries.

Chiramani Naik (2001) in his pilot study Problems of women

entrepreneurs has stressed the fact that woman entrepreneurs risk is
greater as she has the additional problems of being in a male dominated
area. His study also highlights the profit of the woman entrepreneurs,
reasons for the venture and marketing practice. Finally he concludes that
most of the women entrepreneurs face problems like establishment of
showrooms, exposure of the product, management of demand and non-
availability of skilled labour.

Scope of the Study

The study covers the small entrepreneurs who run small scale industries
in the Industrial estates of Madurai Region of Tamil Nadu India. Their
personal problems are studied in this article.

Objectives of the Study

1. To analyze the profile of the sample entrepreneurs in SIDCO industrial

estates of Madurai Region.

2. To analyze the personal problems faced by the small scale

entrepreneurs.

3. To analyse the infrastructural problems faced by the small scale

entrepreneurs
The field work has been conducted from the month of May 2009 to
October 2009 in order to collect primary data relating to the problems of
small scale entrepreneurs in SIDCO Industrial Estateof Madurai Region.

Methodology

In this study, descriptive research design was adopted. Primary data was
collected directly from the small scale entrepreneurs with the help of a
structured questionnaire. Personal interviewing method was adopted. The
secondary data were collected from the membership directory of
Kappalur, Pudur, Andipatti, Urnaganpatti, and Theni Industrialists
Association, the Manual of Tamil Nadu Small Industries Development
Corporation Limited, the Website of Tamil Nadu Small Industries
Development Corporation limited, etc.

Sampling Design

The universe of the Study is based on the lists of Units developed by the
National Informatics Centre, TNSU, Chennai and the Membership
Directories of the Kappalur, Pudur, Andipatti, Urnaganpatti, and Theni
Industrial Association. 144 small scale entrepreneurs have been taken as
sample by the application of stratified random sampling technique. (Table
1)

The respondents were the entrepreneurs who run small-scale industrial

units in SIDCO Industrial Estate, in Madurai Region. The author used
Stratified Random sampling technique to collect information from the
small-scale entrepreneurs in Madurai Region. The SIDCO Industrial Estates
were considered as strata. The sample units were 144 and the sample size
was 33.33%. Percentage analysis and Garrets Ranking Table were used as
tools for data analysis.

Personal Problems

An entrepreneur has to spend more time in his business. Due to this, he

may not be able to spend more time in his family. This situation creates
family problems to an entrepreneur. So an attempt has been made by the
Author to know the family problems faced by the entrepreneurs due to the
business. This has been studied in terms of four variables. They are:

1. Family problems due to the business.

2. Lack of awareness of latest technology.

3. Deficient managerial skills.

4. Lack of awareness about financial assistance schemes.

Analysis using Garrett Ranking

An attempt has been made to analyze the various problems of small scale
entrepreneurs of SIDCO Industrial Estates of Madurai Region by using
Garrett Ranking method.

Formula

Rij = Rank given for the ith variable by the jth respondent

Nj = Number of variables ranked by the jth respondent.

For this purpose the problems have been divided into managerial,
Personal, Infrastructural and miscellaneous problems. The problems have
been analyzed based on their intensity and ranked according to their
scores using Garretts Ranking method.

Family Problems Due to the Business

An entrepreneur who is part of a family may face problem from that

dimension also. So the Author has made an attempt to find out the
problems.

Lack of Awareness of Latest Technology

Latest technology can ensure quality and high rate of productivity. The
small industrialist, therefore, should keep himself abreast of his products,
lower the cost of production and pass on the benefits to the consumer.

In Kappalur most of the Respondents i.e. 87.5% have said that

there is no lack of awareness of latest technology.
In Andipatti all the respondents have said that there is lack of
awareness of latest technology.
In Theni most of the Respondentsi.e. 83.3% have said that there is
no lack of awareness of latest technology.
In Pudur most of the Respondents i.e. 60% have said that there is
no lack of awareness of latest technology.
In Uranganpatti most of the Respondents i.e. 83.7% have said
that there is no lack of awareness of latest technology.
So in Madurai Region 79.9% of Respondents are aware of the
latest technology. 20.1% of the respondents have said that there is
lack of it. So it is concluded that it has not become a major personal
problem of sample entrepreneurs.

Deficient Managerial Skills

Management is a skill which, like any other skill, can be acquired. The
success of an industry is largely determined by a satisfactory
management of finance, inventory, budgeting, marketing, accounting, and
manpower. So an entrepreneur should possess good managerial skills.

In the present study, the author has made an attempt to know how many
Respondents have deficiency in managerial skills. The data relating to
these variables.

Infrastructural Problems

The main objective of the establishment of industrial estates is to provide

infrastructure and accommodation

facilities to the entrepreneurs. In the present study, the Author has made
an attempt to know the infrastructural problems relating to SIDCO
Industrial Estates of Madurai Region.

Infrastructural Problems Relating to Madurai Region

The infrastructural problems relating to each Industrial Estate has been

studied and in total the problems of Industrial Estates of Madurai Region
have been looked into by the Author. Infrastructural problems include lack
of essential infrastructure facilities like water, transport, electricity, etc.

Discussion and Implication

This article looks into the personal and infrastructural problems of the
small scale entrepreneurs of the SIDCO Industrial Estates of Madurai
Region of Tamil Nadu State India. The study clearly indicates that out of
the family problems analysed only spending less time with family has
found to be affecting the entrepreneur. Variables like awareness of latest
technology, awareness of financial services and possessing managerial
skills have not posed a problem of high degree of intensity. It is surprising
to see that the majority of the small scale entrepreneurs are aware of the
latest technologies, financial schemes offered to them and they possess
managerial skills.

While ranking infrastructural problems, power shortage has occupied the

first place. In spite of various problems faced with regard to infrastructure
like drinking water, transportation etc., this power shortage occupies
prime position in Infrastructural problems. P.D.Malgawakar, in his study of
Problems of Small Industry, A Study in Andhra Pradesh, has found the
lack of infrastructure as a general problem. But in this study all angles of
infrastructure are studied and the intensity is ranked using Garretts
ranking Table.
Many researchers have earlier identified the problems in general with the
small

scale industry. Mithesh Kumar Mishra and Anup.K.Karan in their research

paper entitled Sickness in Small Industries: A case study stated that the
two major factors for the sickness of the Small Scale Industries were lack
of adequate and timely working capital and lack of marketing facilities.
They found that lack of technical know- how, shortage of improved
machinery, labour problems, irregular power supply and erratic power
cuts, fluctuation in prices of raw materials and inadequate arrangements
of consultancy acted as checks on the growth of the units. This research
article takes a detailed insight into the different infrastructural and
problems that entrepreneurs face. Further research can be done on the
topic of the influence of personal or infrastructural problems as a cause of
SSI sickness.

Radha Dhandapani (1997) in her research study entitled Entrepreneurial

Success- A study conducted in Small Scale Industries in Madurai District
observed that out of 17 successful entrepreneurs 58.82% have stated that
shortage of working capital as their No.1 Problem. 17.66% said high
interest rate is their prime problem.11.76% pointed out that shortage of
fixed capital as their No.1 Problem. Among the 21 unsuccessful
entrepreneurs 42.86 have stated that shortage of working capital as their
No.1 Problem. 23.81% said high interest rate is their prime
problem.14.29% pointed out that shortage of fixed capital as their No.1
Problem. The comparison of this study with that research shows that
infrastructural problems have not poseda problem to the entrepreneurs at
all when compared with other problems.

One of the important findings in this research article is that the small scale
entrepreneurs are very much aware of the latest technology, financial
schemes and possess managerial skills. It is indeed welcoming finding
that small scale entrepreneur is updated with the latest technologies
available in the market.

The Government of Tamil Nadu provides lot of subsidies to the

entrepreneurs of SIDCO Industrial Estate. But majority of the respondents
have said that the major problem faced in this regard is lack of proper
information. Therefore awareness programmes and propaganda should be
conducted for Small Scale Entrepreneurs to bring awareness.

The study is limited to Industrial Estates of Madurai Region only and

therefore generalized conclusion cannot be drawn.

Conclusion
This article looks into the personal and infrastructural problems of the
small scale entrepreneurs of the SIDCO Industrial Estates of Madurai
Region of Tamil Nadu State India. The major family problem faced by
41.7% of the sample entrepreneurs is spending less time with family.
79.9% of Respondents are aware of the latest technology. Therefore this is
not a major problem for the entrepreneurs in the SIDCO Industrial Estates
of Madurai Region. 88.2% of the respondents has possessed managerial
skills and only 11.8% of the respondents have felt deficiency in
managerial skills. So it is concluded that this is not a major problem for
the entrepreneurs in the SIDCO Industrial Estates of Madurai Region.

Since 84.7% of Respondents are aware of financial assistance schemes

and only 15.3% are unaware of financial assistance schemes it is
concluded that this is not a major problem for the entrepreneurs. The
major infrastructural problem identified by majority of the respondents i.e.
45.1% is power shortage. The major problem faced by majority of the
Respondents i.e. 45.8% in availing government subsidies is lack of proper
information. This article therefore concentrates on the problems faced by
entrepreneurs in the areas of family and infrastructure.