the same-ath in the manufacturing process. All the materials are
received where needed in the assembly line. All the m;
Placed atthe point where needed without unnecessarily moving
produets or other materials in process. All the finished products come
to the assembly line at the same point.
not use this type of arrangement. They may use a process layout
which isalso known as intermittent manufacturinglavout. In this case
each product takes a different route through the manufacturing process,
Unfinished products are moved from one machine to another in different
location. In some cases, some machines are kept busy most of the
time. This often increases the cost.
In any case, the planner will be guided with the rule of keeping
unproductive movement of materials to barest minimum,
He should first of all study their production line to see how closely
they can be kept. The close proximity of these variable can help
FOR THE SERVICE INDUSTRIES
service industries does not take the same pattern, For
Salon shop needs an attractive shop with enough
Fs fo accommodate customers. Italso needs enough
ate all the equipment used for hair treatment. A
pRESSING AND CONTROLLING OF PRODUCTION
WORK (activities)
{tall involves the planning and control of production activities in order
to enable the business operator achieve his aims at the end of the day.
Planning and control for operations require an important input regarding,
the forecast of what we expect to happen ranging from day-to-day,
and week-to-week basis, ete.
Since planning and control for operations necessarily must take place LOCALISATION OF INDUSTRY IN WEST AFRICA
Localisation of industry is the concentration of firms, ‘usually Producing
similar products, at one particular area.
industry may decline due to
Advantages of localization of Industry .
ts goods. If the declining industry is
1 Opportunity for division of labour and specialization:
When firms are close together, it becomes possible for
individual firms to specialize in single processes or in particular
Varieties of a commodity. E.g. in the cotton industry, some
firms are engaged in spinning, weaving, dyeing or some other
| Processand this has brought even greater specialization within
E these industries.
ized, mass unemployment in the area may be the
‘Unemployment due to: a See
er sist because
unemployment, Such unemployment will p
ny other job apart from those in which
‘ | 2, ies and conurbations:
2. Asupply of skilled labour: Localisation of industry brings ns develop when there is extreme
into being a supply of skilled labour for the local industry. A localization of industry, Associated with such densely 4
inhabited areas are problems of over-crowding, traffic
congestion, air and water pollution, robbery and the
new firm might establish itself a particular area because
labour was available there.
__ Development of subsidiary industries: When an industry is
ized, subsidiary industries grow upto cater for 3. Proximity to labour supply: Operators would considey pRODUCTION PROBLEMS IN SMALL BUSINESS
theirneeds for skilled, semi-skilled and unskilled labour, ang problems relating to production in small business operation in Nigeria
locate where there would be adequate supply of needed labour, from one business to another and from time to time. Itis therefore
non this sub-
a Herculean task to attempt an exhaustive discu
4. Availability of Transportation: A good transportation,
system is needed for timely supply of raw materials and easy topic. However, the following problems are prevalent to small business
operation in the country — Nigeria
‘evacuation of finished products.
5. Consideration of the adequacy and cost of power, fuel, water | Inefficientand iregular delivery ofcertain social ed
and electricity: Location near cheap and adequate supply of water, fuel, power and electricity, which seem better!
all the above, will enable the business operators to operate private sector antrepreneurship. :
smoothly. 2. The need to curb apparently over extended and excessive
government intervention in the economy.
6 Good climate: Consideration is given to suitability of ci iene
u avail
temperature, humidity and atmosphere for both human beings 3. Better and optimum use of the availal |
and production process. resources. 4
Lack of attention to research and design efforts by many
7. Proximity to business of the same class (group): Where * husiness owners and where available they are manned (in
_ business would benefit from the services of other businesses ‘most cases) by unskilled personnel. i
around e.g. enjoy the same markets and facilities like z= Access,
fo sources of power: Industri
* Industries are usuall
to the source of power. When coal wa: Le
a ‘were located near coal mines, Even though electricity can
uted easily and cheaply, neamess to it may mean cheap,
aper
‘supplies of power and also aless interrupted supply.
: ~ Access to market: Bulky or heavy goods, suchas furniture
blocks and bottled drinks e.g, beer), are expensive to transport and
are, therefore, produced near the market. Also, perishable and fragile
Boods like bread, newspapers and glasses are located in large towns
is the main source of power.
fed in the towns and cities of West Africa
i-skilled labour force, used to factory
jabour trained by other firms, machine parts and processed raw
materials supplied by other firms as well as local services such as
banking and insurance. Such external economies are usually found in
the big towns and cities and hence many industries tend to concentrate
inthese areas.
7. Influence of Government: Governments often influence
the location of industries either by direct participation in the
establishment of industries or by giving firms encouragement to setup
in particular areas.
8. Natural factors: The location of extractive industries
depends on where raw materials areto be found. Mining, for example,
ispossible only where minerals can be obtained. Farming depends
on soil and climate conditions. Thus, cocoa nd oil palm are grown in
the forest areas and not in the grassland areas.
FACTORS RESPONSIBLE FOR THE CHOICE OF SMALL
BUSINESS LOCATION a
‘The following factors, though not exhaustive, are responsible for the
choice of small business locations.
1. Proximity to desired target market: Where
meants for desired target market is easily damage
or expensive to transport. The}!
the target market e.g, blocks, LOCATION AND LOCALIZATION OF
INDUSTRY
ADEBAYO, A.A.
LOCATION OF INDUSTRIES IN WEST AFRICA
Location of industry is the siting of an industry at a place in tune with
considerations bordering on raw materials, power, market, etc. To
achieve their major objective of maximizing profits, businessmen do
their best to cut down the cost of production (in monetary terms),
especially when they are considering where the site their industries.
Factors Influencing Location of Industries
The following are some of the factors which influence businessmen in
considering where to locate their industries.
7 Access to raw materials: an industry tends to be located
re sourc of ‘raw material if the material is bulky and involves
ao tation costs, whereas the Ni noite 5. Addition Method thisisanidea generation method in whig,
each member of a team adds new ideas to the already coniributeg
‘ones onalist goes round. These ideas continue to build up a, chain
form until a final ideaemerges
6. Features Method- Feature idea generation method involves
the giving of ony attributes or parameters of a problem to the ideas
contributors for consideration for ideas generation
Te ‘Case Study or Historical Method — Historical or case study
‘method isamethod in which the historical background of the problem
orof the entire organisation to date is given to the idea generators
for analysis for problem solving ideas generation. Case study is
“treated in a later chapter of this book. It is to be noted that a
“combination of two more of the techniques or method mentioned
ne for problem solving ideas generation, depending on the
tise of their users.
jlems Solving by External Means ~Thisis the use of
ora business to identify its problems, especially those that refuse to
unveil themselves for solution proffering purposes, it mustbe able to
analytically and thoroughly scan its environment. Environmentalanalysis
js dealt with ina later chapter of this book. as Problem Solving Model
Sensitivity to problem symptoms or signs
i: Identification of any symptom available
* Gathering ideal altematives from relevant bodies or quarters
* Considering the ideal alternatives or options on the basis of
theirefficacy
* Choosing the best from the altematives
* Applying the chosen alternatives
Reviewing the working of the option or options chosen in
terms of their effectiveness
Controlling the working ofthe altematives applied, ifneeded,
until results are achieved.
Problems analysis would be treated ina later chapter ofthis book. Let
ifbeknow that problem solving model does not guarantee the solution
Hblem, what is most important is getting the right ideas and the
on of the ideas which the model is after. Ideas generation
ly y for thse that are specially endowed with features like
Addition method
J Features method
i Case study or historical method
|. Brainstorming Method - This involves bringing everyone
in the business together to solve the, problem of the business. Thiscan
be individualistic or collective. Itis individualistic where people are
asked to do the brainstorming individually, while itis group where
various individuals come together to do it. Brainstorming can also be
‘verbal or written. Itis verbal where itis reported vocally and itis
written when tis reported in writing.
2. Open Group Method ~ this method is like a collective
brajnstomning method except that, aleader or acoordinatorischosen.
fiy-discussion under open group discussion, while there isno leader
or coordinator under brainstorming method. The discussion under a
trainstormingsa open one the identifying ofthe problem tothe group
atthe beginning of the assignment. y Employees, dishonesty and disloyalty
© Badcustomerservice and fraudulent practices.
© Application of poor wrong marking strategies, etc,
+ Failureto pay salaries, wages and operational bsinessexpenses
or delays in such payment.
fee 9 tabi . Increasing labour tumover
ae a ss en, Gite Absenteeism and other negative attitude of employeesto
indiretly and threatening tothe suviv tinuity ofa business, ‘work and management
Every business small or large in level can be affected by anypf these ¢ ee i
f ‘but while the large ones can be less affected and can solve . ae use of old machines area
more easily, the small-scale business are more affected © Continuous recording ofosses :
‘more difficult to solve their own problems because of © ospRedundaney atework sling z
Loss of franchise or patent rights
Solving Business Problems
To prevent the failure of a business, the problems ofthe!
themanagement ofa business ores
Problems Solving by Internal Means
‘onin facts and cireumstances that su
solving ideas raised. to solve the ‘+ Employees, dishonesty and disloyalty
9 Bad customer service and fraudulent practices.
* Application of poor wrong marking strategies, etc,
Any of these problems would be threatening to profitability directly or
indirectly and threatening to the survival and continuity ofa business,
Every business small or large in level can be affected by anpof these
problems but while the large ones can be less affected and can solve
their problems more easily the small-scale business are more affected
nd find it much more dfficultto solve their own problems because of
size differences.
__ Business Failure Warning Signs
be alert and sensitive to these signs or symptoms
ness will fil and the entrepreneur will start seeking
Failure to pay salaries, wages and operational business expenses
ordelays in such payment
«Increasing labour tumover
* _ Absenteeism and other negative attitude of employees to
work and management
© Inability to settle trade creditors
© Continuous use of old machines or equipment
© Continuous recording oflosses
© Redundancy at work
© Lossof franchise or patentrights.
Solving Business Problems
To prevent the failure of business, the problems ofthe businessmust
be addressed early enough. A problem can be solved intern
the management ofa business or extemally by consultants.
Problems Solving by Internal Means ‘
Usually, there is no one particular way in which,
internally solved as the successful solving of
onin facts and circumstances that sun
solving ideas raised to solve the pr
ideas chosen and applied to sol ENABLING ENVIRONMENT FOR SMALL,
BUSINESS AND ENTREPRENEURSHIP
MANAGEMENT
OSHO, O. T.
Industrial infrastructure or enabling environment is one of the many
environments within which small business organisations operate. The
‘elements of the enabling environment include electricity, transportation,
‘communication, water supply, financial infrastructure, and educational
infrastructure, among others. These elements of the enabling
nvironment are salient factors to be considered in the operation and
sement of small business enterprises in Nigeria.
to examine the adequacy, ot otherwise, of these elements of the
enabling environment or industrial infastrctur, This chapter examines
the problems and prospects of industrial infrastructure in Nigeria, as
they constitute the enabling environment for efficient and effective
participation in, and management of, small business enterprises in
Nigeria. We now examine the problems of industrial infrastructure in
Nigeriain the following areas
ELECTRICITY
Electricity supply to existing small business firms in Nigeriais usually
inadequate and unreliable. Although, the National E] lectric Power
Authority (NEPA), now Power Holding Company of Nigeria
(PHCN), nominal generation capacity of 4550 megawatts farexceeds
clients’ peak load demand of 2000 megawatts, ' problems resulting
from transmission and particularly distribution networks have created
‘unnecessary differences between demand requirements and generated
and delivered electricity. The consequence of this is that most small
business enterprises in Nigeria operate their own electric generators.
In some cases, itis the PHCN’s /’ NEPA’ electricity that ison “stand-
generators it costs substantial sum of
these electric generators, and the
‘unto the final consumers or cies a Higher probability of success because oF goodwill of
franchiser.
Quality produets or services:
Free advertisement and business promotion.
Possible financial assistance from franchise. t
Sure source of products supply
Possible technical and management suppor from tet
Business project cost reduction is possible as the costar
wen ee eS
setting up an entirely new business will be avoided 1 Som
ae: ;
10. Centralized stocks purchase which reduces stock cost 10 the
franchisee.
11. Products improvement done by the franchise would help the
franchisee. 0
Disadvantages of Franchise Business tothe Franchisee”
1. Profit sharing with the franchisee by the franchiser in addition
advantages of Franchise business tothe franchiser.
Dis
pailure or closure of the franchser’s business canlead to the
Joss of business by the franchisee,
meaning *
i
‘No direct cost of investment to the franchiser.
Cheap means of expansion.
Franchisees are more motivated than employeesto operate
better and make more profitwhich franchiserscan benefit from.
Franchisees understand local markets oe
franchisee or franchisor.
Economies of scale or cost saving in bulkpurchaseofraw
‘materials, semi finished or finished goods. po
Risk sharing with franchisees.
vantages of Franchise esi tothel Some of these reasons are to reduce monopoly. raise more fundg
for government. to reduce government borrow! ing and charged taxes,
to redistribute income and wealth, etc. In Nigeria, nationalizeg
industries and other enterprises of the federal government ATE now
being privatized. mostly for efficiency, effectiveness and profitabi
Examples are Power Holding Company of Niger! Ple (HCN),
Nigerian Telecommunication Ple (NITEL) National Petroleum
Investment Services (NAPIMS), Nigerian Petroleum Developmen”
Company (NPDC), Nigerian National Pexoleun Company (NNEC)
Nigerian Gas Company (NGC). te.
‘me urplusmade on these sales are used to finance some government
for the benefit of the citizens of the boards owning government.
ties of marketing boards reduce the income that go to the
producers and for this reason, marketing boardshave been eradicated
jn Nigeria to raise the income of the producers especially the farmers.
to consequently raise their standard of living. This however, makes
the surpluses that usually acerue to various govemments from marketing,
poards cease.
SPECIALIZED BUSINESSES
‘These are businesses is
are ebeinzgperalest They nian Bate ee —_
2. Investment companies: Theseare companies incorporated
by government to establish offspring-companics or subsidiaries and
investin otherexisting companies, While nationalized industries are
federal government business concerns, government investment
‘companies are mostly owned by regions and states. Examples of this ‘
type of business are: O’dua investment Company Ltd, covering Oyo, Joint Ventures
Lagos. Ekiti and Osun states constituting a region, Oyo State Ajoint venture isa business formed by two.
Investinent Corporation owned by the Oyo State Government; business oriented individuals by contrib
Gateway Holdings Ltd, owned by Ogun State Government and the Ss
Ondo State Investment Holding Company, owned by Ondo State Advantages of Cooperative So
‘of'scale suchas low production cost, which result fr 5
scale production aided by combine resources, “oma
Consumers Cooperative Society: A, ertpofconsies
combine resource to handle the distribution and :
of finished products among themselvesat prices Be
market prices.
Thrift and Credit Cooperative Society: A coopera
formed for the purpose of collecting saving, fom member
Jending back to the loan seeking ones among them at red
interest rates.
Mll-ferpose Cooperntve Society: Thisie eg
cooperative society that carries out the functions ofo
more of the other societies
es
Members show more interestn the operations of the bus
‘They help members to get reduced prices on products
“They help membersto get funds at reasonable interest
encourage savings from members, é
Dis:
advantages of Cooperative Societies
Limited capital and fund raising ability.
Lack of qualified or skillful personnel to handle activities.
Some members may not know their Fights and obligations as
result ofilliteracy or ignorance, which may lead to cheating
from some unscrupulous officer or members. d
Cooperative societies may pave way for fraudulent and other
sharp practices because of weak internal jcontrol systems,
Most ofthe time, the committee members elected torunthe
affairs of the business do not have much time: foritandwhere
theyhavetime, they may notbe entrepreneurially comm
the activities of the business. c -_ TST
10. Tax: Corporations are taxedat the corporate level g,
‘are also taxed as income to the stockholders. Thus, creating
{ax issue. For tax purposes, ifthe company has an ope
{oss can be passed to the shareholders (subject to some
Advantages of Joint Stock Companies 7
aks
nea
es
1.
Risk are reduced as they are shared among the shareho
the company. "ony
Disadvantages of Joint Stock companies
High cost of set-up and incorporation
Complexities of incorporation as a result various legal and
regulatory requirement. '
Double taxation against the shareholders as they suffer both
corporate and corporate and individual taxes.
Loss of possible control by founders as outsides can buy.
2. Very large capital possible controlling interests in companies.
2 eA atityas itis diferent and separate From its oypy Reduced personae oe eee
legally. and staff members.
MS Ea ms conti asthe death 6 a eee ae om
Apatite Seca, fen ‘conflict of personalities clashare possi
5. Limited ti a; ‘Theyare not flexible like one-man businesses or partnership
-unlimited liability company.
ity of shareholder. where a company isnotay_
par from large capital possibility joint stock comy
panies
Cooperative Societies
as theiractivities go with beaurecriic processes,
managing but are financial members, ¥
interest in the business profit alone. company is usually governed by a board ofdi tors,
5, Ownersand profits: The owners of the ‘corporation type of
pusinessare the shareholders who have shares (received stock inthe
corporation). Such tock istypcally common stock, but ean sometimes
be preferred stock (which gives the stock/share holders eertain
ts over holders of common stock). To the extent that
id, the common stock holders are toapro. !
ividends made of the common stock shareholders. |
rights for preferred shareholders depend on what has /
privileged
dividends are
forthe corporation’s debis and
inthe company signs a guaran
“can bea factor.
2 Perpetua to partn
Proprietorship types of businesses, corporations ger
forever. However. a corporation type o ;
by voluntary action,
directors and shareholders.
7. Stock transferability: Shareho canst
orporations type of business make a lot of sense for
ro. This means that where a company has ibility whieh its
snot take care ofin ful, personal asset ofits owmners.ean Pe
applied in the setlementof te full ability
embe
or shat
cevanslered withouthe consent of the company. A private company
canbe incorporated as either limited or unlimited.
the general or public
in be individ i ie ‘Sita requirements than companies
9. Ot thal al : tock Companies
company isabusit in sal
100" his tala Rec with 2 1 group of people. With the legal entity status, itean sue and be
Skies ively personal relationship with stafr, is ‘of law. A, jot stock company is. mere Rec! cr
Ae ries a sngnssombined one NE SNS
ability is possible for some partners (the lim sbination af the share ofa company. Ashore isaunitof,
se liming yeompany'smemberealleda shareholder of hecompany:
13, ‘another name for jointst is ‘ion. Acorporation
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