PROBLEMS IN SMALL SCALE INDUSTRIES

Classification of the problems The internal problems. The external problems. Internal problems A) Planning: a) Technical feasibilit : - Lack of technical know-how. - Locational disadvantage. - Outdated production process. b) Economic !iabilit : - igh cost of inputs. - !neconomic si"e of the pro#ects. - !nderestimation of financial re$uirements. - Over estimation of demand. %)Implementation. &) Production. a) Pro"#ction Mana$ement: - 'oor $ualit( control. - 'oor capacit( utili"ation. - 'oor inventor( management. - )nade$uate maintenance. - igh wastage. b) Labo#r mana$ement: - )nefficient handling of labour problems. - *xcessive manpower. - Lack of trained and skilled labour. c) Mar%etin$ mana$ement: - +ependence on a single or small group of customers. - +efective pricing polic(. - Lack of market research. d) &inancial mana$ement: - Liberal dividend polic(. - )nade$uate working capital. e) A"ministrati'e mana$ement: - Over centrali"ation. - Lack of professionalism. - Lack of feed-back to management. - )ncompetent management.

E(ternal problems A) Infrastructural bottlenecks: - )rregular suppl( of raw materials. - Transport bottlenecks. %) Financial bottlenecks: &) Government controls and policies: - ,overnment price controls. - &hange in government policies. +) Market constraints: - -arket saturation. - Technological advances rendering one.s product obsolete. *) Extraneous factors: - /atural calamities. - 'olitical situation. - 0ar. - 1trikes. - -ultiplicit( of labour unions.