Problems Faced by Small Scale Industries

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CHAPTER – V
PROBLEMS FACED BY SMALL SCALE INDUSTRIES
The development of small-scale industries is hampered by a
diversity of problems. There are certain problems common to all types of cottage and small scale industrial units. In this context, the present chapter is devoted to a detailed study of the problems of the small-scale industrial sector. It also seeks to suggest remedial measures. The basic requirement for the industrial development of a region is the presence of entrepreneurship in that area. The non-availability of adequate finance, paucity of raw materials, absence of technical and managerial guidance, and non-availability of industrial accommodation and marketing facilities are the other major problems facing the small-scale sector. The slow growth industries in Tamil Nadu have been due to lack of entrepreneurship, which performs the function of initiating, establishing and organizing industries. The people of Tamil Nadu, in fact lack enterprising character as compared with people in other states. Under the circumstances, the state Government entered the economic field and established important industries in the public sector. Without private participation, it is very difficult for an under-developed state to active industrialization. Therefore, the development of local private talent is highly essential. In this connection, it should be kept in view that entrepreneurship talent is not the monopoly of any particular race. 210 Entrepreneurship can be developed by proper education, training, and provision of necessary cost and market data. It also requires complete reorientation of the curriculum so that young persons are provided with opportunities to develop new skills and attitudes that would turn them into entrepreneurs. The provision of proper training facilities helps in the development of entrepreneurship. Proper training, persuasion, guidance and assistance can bring about radical change. The self-employment schemes in the state can be made successful by the formulation of gainful schemes of industries mainly based on local factors, endowments and demand conditions.

Problems of Small Scale Industries
In this section problems faced by the small scale industrial units are discussed. Problems related with marketing, Labour, Production, Finance, Technology and Management are ranked and the scores are taken for analysis. Plan for expansion the units are also assessed in this section.

The problems of small-scale industries may be classified as external and internal. External problems are those, which are beyond the control of the industrialists, such as the availability of power, and other infrastructural facilities required for running the units. Contrarily, the internal problems are those which are not influenced by external forces like problems involved in organization, structure, and production process, channel of distribution, technology, know-how, training, industrial relations and inadequacy of management211

Marketing Problems
Marketers are increasingly recognizing the importance of formal approaches to market planning, to meet the challenges of growing competition, rising material costs, declining profit margins and limited cash reserves. Market decisions made by the entrepreneurs at a particular time influence the direction and fate of the small-scale units for a number of years. Successful market planning involves an analysis of market opportunities and assessment of the firm’s ability to take advantage of these opportunities. The success of an industrial unit depends on the marketing of its finished products.

Marketing is a crucial area especially in small units whose marketing infrastructure is susceptible to frequent and chronic illnesses. Units with strong marketing set-up grow better even in rough weather. The organizational design should be so planned as to meet any marketing situation. The marketing team should be dynamic and...
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