Entrepreneurship: Small Scale Industries ( SSI)

What is a small-scale industry?

An industrial unit in which the investment in fixed assets in plant and machinery does not exceed rupees one crore is said to be small scale industry. Such plant and machinery may be owned or obtained on lease – while calculating the investment in plant and machinery items like land, building and some equipments required for quality control, pollution control etc, Are excluded.

In ancient India there used to be several people who were producing varieties of goods and selling them.That profession was providing them the means of livelihood.Traditional small scale industries include Pot weaving,carpentry,knitting etc.Their lives were spent in a happy and smooth way.But with the on set of machines,all those professions have lost their value.Unemployment has grown in villages and towns.

Industries and factories are highly necessary in any country for producing goods on a large scale and make it economically prosperous.The surplus of goods can be exported to other countries and foreign exchange can be earned.The developed countries of foreign nations are enjoying foreign currency by making use of these industries.As majority of population in India are middle class and lower middle class people,these industries should be encouraged to increase in their standard of living.

Industries are of two types:
Large scale
Small scale
Large scale industries are the key industries of any country and they require large scale investment to the tune of crores of rupees,huge number of workers and higher facilities.Iron and steel,manufacturing of tools,medicines,chemicals,transport facilities like cars,trains,airplanes,ships come under large scale industries.
Small scale industries require less investment and small number of workers.Goods that are not produced by large scale industries can be manufactured by these small scale units.The state government have opened a separate wing for small scale industries unit.It is probing into the availability of raw materials at different places for the manufacture of such useful articles and is encouraging those persons who are interested in the respective fields to start such small scale industries.It is also providing Raw materials,loan facilities,electricity,water-supply,transport facilities,exemption from taxes,subsidies and opportunities for sale of goods. 

  Small Scale and Ancillary Industries

Small scale industrial units are those engaged in the manufacture, processing or preservation of goods and whose investment in plant and machinery (original cost) does not exceed Rs.1 crore. These would, inter alia, include units engaged in mining or quarrying, servicing and repairing of machinery. In the case of ancillary units, the investment in plant and machinery (original cost) should also not exceed Rs. 1 crore to be classified under small-scale industry.

The investment limit of Rs. 1 crore for classification as SSI has been enhanced to Rs.5 crore in respect of certain specified items under hosiery, hand tools, drugs & pharmaceuticals, stationery items and sports goods by the Government of India.

Developing Country Entrepreneurs need small scale industries to drive their development.  The USA, the greatest industrial nation in the world, began its development with horse power, water power and low tech equipment, often made within the community at a blacksmith, woodworker, basket makers and other small scale industry.  These iron works, metal shops, led to industrial development.  

It was said of Americans with contempt by European royalty "They're just a nation of tinkerers". Tinkerers or people who often build their own small machinery.  When they purchased machinery, they immediately set out to improve them.  And that is why small scale machinery works in a developing country. Unlike high tech machinery, it is still reparable, upgradeable and modifiable by Third world entrepreneurs.

Small scale machinery and small scale industries have a wide variety of positives that lead them to be the needed mechanisms for sustainable development in Third World countries.  But small scale entrepreneurs need a source of knowhow they can afford.

Small scale industries are vital to economic development as they are more likely to become economically viable in a short time period & offer an incremental boost to the local economy.

They are also more likely to sustain operations over a longer time frame as they utilize a more community based sense of existence than some of the monolithic entities which will relocate causing unemployment & dissension.

Larger industries have become victims of their own largess in many cases & are unable to respond to changing times, & often don't have the ability to respond to the rapidly changing economic environment we now must adhere to.

Advantages of small scale industries

1.Self employment
2.Reduce the number of imports from other countries
3.Distribution of economic power.
4.Suitable especially for people in India
5.Improves the entrepreneur skill of people

Drawbacks

1.No Technical awareness
Rural People cannot get the technical skills required to establish these industries
2.Unable to market the goods
3.Problem gathering raw materials

In my opinion,Small scale industries are one of the best ways of employment because establishment cost is less and profits are more.The most important thing is these industries are less affected by recession.

IPR: Patents

A patent is an exclusive right granted for an invention, which is a product or a process that provides a new way of doing something, or offers a new technical solution to a problem.

1888	CONSOLIDATED AS THE INVENTIONS & DESIGNS ACT.
1911	THE INDIAN PATENTS & DESIGNS ACT.
1972	THE PATENTS ACT (ACT 39 OF 1970) CAME INTO FORCE ON 20TH APRIL 1972.
1999	ON MARCH 26, 1999 PATENTS (AMENDMENT) ACT, (1999) CAME INTO FORCE FROM 01-01-1995.
2002	THE PATENTS (AMENDMENT) ACT 2002 CAME INTO FORCE FROM 2OTH MAY 2003
2005	THE PATENTS (AMENDMENT) ACT 2005 EFFECTIVE FROM Ist JANUARY 2005

 A patent provides protection for the invention to the owner of the patent. The protection is granted for a limited period, generally 20 years.

 Patent protection means that the invention cannot be commercially made, used, distributed or sold without the patent owner's consent. These patent rights are usually enforced in a court, which, in most systems, holds the authority to stop patent infringement. Conversely, a court can also declare a patent invalid upon a successful challenge by a third party.

 A patent owner has the right to decide who may - or may not - use the patented invention for the period in which the invention is protected. The patent owner may give permission to, or license, other parties to use the invention on mutually agreed terms. The owner may also sell the right to the invention to someone else, who will then become the new owner of the patent. Once a patent expires, the protection ends, and an invention enters the public domain, that is, the owner no longer holds exclusive rights to the invention, which becomes available to commercial exploitation by others.

 Patents provide incentives to individuals by offering them recognition for their creativity and material reward for their marketable inventions. These incentives encourage innovation, which assures that the quality of human life is continuously enhanced.

 

Patented inventions have, in fact, pervaded every aspect of human life, from electric lighting (patents held by Edison and Swan) and plastic (patents held by Baekeland), to ballpoint pens (patents held by Biro) and microprocessors (patents held by Intel, for example).

All patent owners are obliged, in return for patent protection, to publicly disclose information on their invention in order to enrich the total body of technical knowledge in the world. Such an ever-increasing body of public knowledge promotes further creativity and innovation in others. In this way, patents provide not only protection for the owner but valuable information and inspiration for future generations of researchers and inventors.

The first step in securing a patent is the filing of a patent application. The patent application generally contains the title of the invention, as well as an indication of its technical field; it must include the background and a description of the invention, in clear language and enough detail that an individual with an average understanding of the field could use or reproduce the invention. Such descriptions are usually accompanied by visual materials such as drawings, plans, or diagrams to better describe the invention. The application also contains various "claims", that is, information which determines the extent of protection granted by the patent.

 An invention must, in general, fulfill the following conditions to be protected by a patent. It must be of practical use; it must show an element of novelty, that is, some new characteristic which is not known in the body of existing knowledge in its technical field. This body of existing knowledge is called "prior art". The invention must show an inventive step which could not be deduced by a person with average knowledge of the technical field. Finally, its subject matter must be accepted as "patentable" under law. In many countries, scientific theories, mathematical methods, plant or animal varieties, discoveries of natural substances, commercial methods, or methods for medical treatment (as opposed to medical products) are generally not patentable.

 A patent is granted by a national patent office or by a regional office that does the work for a number of countries, such as the European Patent Office and the African Regional Industrial Property Organization. Under such regional systems, an applicant requests protection for the invention in one or more countries, and each country decides as to whether to offer patent protection within its borders. The WIPO-administered Patent Cooperation Treaty (PCT) provides for the filing of a single international patent application which has the same effect as national applications filed in the designated countries. An applicant seeking protection may file one application and request protection in as many signatory states as needed.

 

Management: Organizing, Staffing and Motivation

        Management has been described as a social process involving responsibility for economical and effective planning & regulation of operation of an enterprise in the fulfillment of given purposes. It is a dynamic process consisting of various elements and activities. These activities are different from operative functions like marketing, finance, purchase etc. Rather these activities are common to each and every manger irrespective of his level or status.

        Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”. According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

        For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.

Planning

It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, “Planning is deciding in advance – what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.

Organizing

It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves:

• Identification of activities.
• Classification of grouping of activities.
• Assignment of duties.
• Delegation of authority and creation of responsibility.
• Coordinating authority and responsibility relationships.

Staffing

It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”. Staffing involves:

• Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place).
• Recruitment, selection & placement.
• Training & development.
• Remuneration.
• Performance appraisal.
• Promotions & transfer.

A nutshell of Management ...

Management : A Definition (courtesy - wikipedia)

“Management” (from Old French ménagement “the art of conducting, directing”, from Latin manu agere “to lead by the hand”) characterises the process of leading and directing all or part of an organization, often a business, through the deployment and manipulation of resources (human, financial, material, intellectual or intangible).


Meaning Of Management

Management is an organizational function, like sales, marketing or finance. It doesn’t necessarily mean managing people. We can manage ourselves or the material assigned to us at work. If you managed a project very well on your own, it would mean that you did the job in a well-organized, efficient manner, making good use of all resources at your disposal.
Management is like investment. Managers have resources to invest - their time, talent and, possibly, human resources.


Management Concept

Team Work
A great emphasis is placed on teamwork throughout our organization.  Task force teams are created and given responsibility for various functions aiming to meet the customer's requirements and the technical specifications.

Quality System
Total quality management is our pledge throughout our organization in operations and management.  The latest quality control and assurance system and the specialized training our staff undertake allows us to meet both the international quality system standards and the high standards set by our customers.

Flexibility
During business discussions and production planning we aim to be as flexible as possible.  Our customer relations team endeavor to meet any special requests made by customers and aim to respond quickly and effectively.

Pro-active
We aim for a pro-active approach to maintain a high level of customer satisfaction.  Our Customer Service Team continually liaise with customers.  Contacts whether formal or informal present the opportunity to receive the customer ideas and suggestions.

Planning
The key to a successful operation is in good planning.  Careful plans are made and discussed before any action is taken.  A complete schedule is drawn up identifying action items, an action timeline and the parties responsible for the various stages of implementation.


OBJECTIVES OF MANAGEMENT

• Protecting the owner's Interest
• Helpful in achieving the predetermined objectives
• Development of Labor force
• Getting maximum results through minimum efforts
• To increase the efficiency of the factors of production
• Maximum utilization of available resources

Management As A Process

Managemnt is a process, as it includes the following components:

i) Social process

The main function of management is to deal with the human element in the business. Human factor is the most sensitive factor of production. It activates other factors of production in the business. Therefore it is essential that the management deal with human factor with care and skill.



ii) Integrating process

Every business requires the right combination of human, physical and financial resources. Management integrates the factors men, machines, materials, methods and money to achieve organizational goals.


iii) Continuous process

Since business is a continuous activity, the management is a continuous process. It is the constant process of leading the business activities in the pre determined course. It involves verifying results at every stage with the targets set. Management continuously identifies the potential areas of trouble and implements corrective measures before they become crisis in business.


iv) Universal process

Management functions are not restricted to business alone. They are important in every form of organization whether it is social, religious or cultural organization. When there is an activity to be performed by a group all managerial functions such as planning organizing, directing and controlling becomes essential to make that group activity successful.


Management as an Art and Science

No matter how competent or hardworking managers are, they understand that no one can achieve an organization's goals alone. Management involves working with and through other people. Because people are unpredictable, and because the interaction between managers and employees is unpredictable, it is impossible to impose a rigid set of rules that will work in every situation. That's one reason management is as much an art as a science.


Management as an Art

• The process of management does involve the use of know-how & Skills like any other art such as Music, Painting etc.
• The process of management is directed to achieve certain concrete result as other fields of Art do.
• Management is creative like any other art

Management as a Science

• Universally accepted principles.
• Establish relationship between causes & effects
• Predictability of the result.

Management:As a Social Responsibility

• Towards Employee
• Towards Community
• Towards Self
• Towards Government
• Towards Consumers etc

Importance of Management

• Reduces Costs
• Establish a sound Organization
• Generation of employment
• Growth of an organization
• Overcome competition
• Development of the Nation