Content uploaded by Satish Patel
Author content
All content in this area was uploaded by Satish Patel on Jul 27, 2021
Content may be subject to copyright.
1
"Managerial study of Micro, Small and Medium Enterprise in Saurashtra Region”
Dr. Satish Patel & Tushar D. Borad
Centre for Studies in Rural Management, Faculty of Management and Technology,
Gujarat Vidyapith, Randheja, Gandhinagar, Gujarat, India
Abstract
Gandhiji said, "Cities are getting bigger by exploitation the blood of the villages”. so the big
cities are developing at the expense of the villages and big business companies are
responsible for development is also important to remove the problem of poverty and
unemployment and leads the nation on the track of development we can't even imagine the
development of Nation without industrialization for that the middle way of this problem is
the decentralization of industries that means the industry in the form of MSME can play an
important role in the development of the country. By developing such industries in rural
areas, the rural economy can thrive and economic equality can be achieved. It can help in
reducing migration from rural to urban areas.
India's MSME sector is the second largest source of jobs after agriculture and serves as a
breeding ground for entrepreneurs and innovators, with substantial support for the strength
ening of the business ecosystem after COVID pendemic for economic growth.
Keyword: Managerial, MSME, Saurashtra, Management, COVID
1. INTRODUCTION
The Indian economy is based on Agriculture sectors and most of the population lives in rural
areas that are why the development of rural areas is a fundamental need development and
prosper villages will lead the Indian economy towards development and economical
equality. The most of the village economy is based on the Agriculture sector, which is based
on conversation methods and the Agriculture land is divided into small pieces as the rural
population is increasing that is why the gradual farmers becoming small and their capital
income is also decreasing, on the other hand, the multinational companies their Power and
business in the world more and more and sometimes their budget is larger than the annual
budget of some countries, which leads to the economical centralization and is not good for
the development of any country. we can't even imagine the development of a Nation without
industrialization that the middle way to this problem is the decentralization of industries that
means the industry in the form of MSME can play an important role in the development of
the country. By developing such industries in rural areas, the rural economy can thrive and
economic equality can be achieved. It can help in reducing migration from rural to urban
areas. According to Gandhiji's developmental vision, the economic-industrial inequality
prevailing in the area can be reduced from the development of small scale industries.
2
Long Term Strategy for Sustainability of MSMEs by the Govt of india is “Smart Industrial
Village” Policy, Promoting “Swadeshi” Ideology via Policy & Strategy Drafting, To
promote innovation and upscale MSMEs to withstand global competitions, Financial
Assistance to MSMEs
2. STATEMENT OF PROBLEM
According to the Report of the “Credit Suisse Global Wealth Databook-2015” In India, 50%
of Wealth is owned by only 1% population of the country, which clearly shows that
economical centralization is most in our country. A handful of people rule most of the
country's wealth. It is dangerous for the economy, big companies are mostly responsible for
increasing this economic concentration. on the other hand, it is also important to develop
the industries, without it we can’t develop our nation. then it’s important to develop MSME
as the resolution of this problem. It is also important in decentralizing the economy, equally
regional development, and generate employment. we can easily understand it by the
following information.
- MSME is the backbone of India's economy.
- MSME contribute 40% of the Indian GDP
- More than 8000 Products are produced by 11 million MSME
- Indian’s 90% industries are base on MSME
- MSME contributes 35% of India's industrial exports
To achieve rapid economic growth in post-independence India, the government has adopted
policies to encourage small and medium enterprises (SMEs) through various five-year plans
with large scale industries, leading to economic equality. The big cities will not increase
more and the rural area will be also be developed, which can lead to equal development of
cities and villages. MSME’s industries can generate employment but also some limitations
for such industries, like infrastructure facilities, technical support, scientific management,
transportation, Communication, Government administration system, Market produced
goods, financial procurement, lack of proper guidance, raw materials, lack of training, etc.
Big corporation fulfills their needs on the base of money and sufficient resources, But
MSME industries are declining due to limited resources. As a result, they sometimes lose
their existence. That's why this subject is selected so that MSME industries can get a proper
guideline to manage and can develop. Most of the farmland here is rainfed, Eight months of
the year people get employment from the non-agricultural sector. For this, he has to move
to cities like Surat and Ahmedabad. On the other hand, there are also coastal areas, ports,
and other many natural resources and small and heavy industries in these regions. Small
businesses here can be made more efficient through efficient management. Which can
generate balanced growth as well as local employment?
3
3. OBJECTIVE OF THE STUDY
• To examine the condition of Human resource Management in MSME.
• To examine the condition of Finance Management in MSME.
• To examine the condition of Marketing Management in MSME.
• To examine the condition of Production Management in MSME.
• To examine the condition of the Management Information System in MSME.
4. RESEARCH METHODOLOGY
• Field Selection
There were many other options for the managerial study of MSMEs at the state as well
as the national level. In which the industrially developed or industrially backward
districts of the state can be selected. But here, the whole Saurashtra region is chosen.
Some of the districts included are backward. As most of the Agriculture here is rained,
people are constantly migrating for employment and settle in other areas. The proposed
study area has been selected keeping in view the objective of supporting the
development of the MSME industry and generate employment. The geographical area
of the research area is very wide. The growth of MSME industries has more in some
districts in this area while it has less in some. Thus, instead of selecting a single district
for research, the entire Saurashtra region has been selected. The field of study has been
selected keeping this objective in mind.
• Aggregate
The study area covers a total of 7 districts. (As per 2010-11) As per the 2011 census,
5% of the total MSME units operating in these seven districts have been selected as
samples. These units have been selected base on the total units operating in the district.
As well as the asymmetrical selection of micro, small and medium units. The particulars
of which are given in the following table.
Aggregation and Sample selection of MSME units
Districts
Aggregate
(Total Units)
Sample
Units
(5%)
Particulars of the selected sample
Micro
Unit
Small
Unit
Medium
Unit
Total
Sample
Amreli
126
6
2
2
2
6
Bhavnagar
331
18
6
6
6
18
Jamnagar
484
24
8
8
8
24
Junagadh
100
6
2
2
2
6
Porbandar
60
3
1
1
1
3
Rajkot
1917
96
32
32
32
96
Surendranagar
236
12
4
4
4
12
Total
3254
165
55
55
55
165
4
• Sample
A total of 165 units have been selected from seven districts of the study area. The owner
and employee of the unit are selected as the respondent from the selected units. Thus, a
total of 385 respondents have been selected from 165 units. It is also noted here that the
selected units have a symmetrical selection of micro, small and medium scale units. But
there is a difference in the number of respondents according to the size of the unit. In
which per unit 1 respondent is selected from micro, 2 from small and 4 from the medium
unit. Here, the sample selection has been done base on the MSME units operating until
the year 2011, as the appropriate time limit for evaluation has to be taken into
consideration. A total of 3254 MSME units were working in seven districts of the
Saurashtra region as shown in the table. Here, the researcher has selected 5% units from
every district wise and selected a total of 165 units. Which is done based on the Random
sampling method.
Proportion of Respondent
No.
Type of Respondent
Proportion of Selection
1
Primary Respondent (owner/manager)
165
2
Primary Respondent (employee)
220
Total
385
The numbers of respondents have selected the base on the size of units. Here two kinds
of respondents are selected as the Owner and employees of units in small and medium
units, while in micro-units only the Owner is selected as the respondent, which is notable
here.
5. FINDINGS
The findings of the research are based on statistical analysis, interpretation as well as face-
to-face interviews and observations. Managerial study of Micro, Small, and Medium
Enterprise in Saurashtra Region which is as given below.
A. HUMAN RESOURCE MANAGEMENT
• After the appointment of the employee, he should be assigned a phase-wise outline,
so that he can adapt to the new environment and daily work.
• For the right person to be appointed in the right place, the formality should be
enhanced in the selection of the candidate keeping in view the work-related study,
experience, efficiency measurement as well as aptitude.
• Employee training should be organized at different levels from time to increase the
understanding and implementation of technical, managerial, and other new concepts.
• Performance appraisal should be done to create Security as well as the competitive
environment in the employee and for promotion as well as an increment.
• The productivity of the employee should be measured for the analysis of the
expenditure incurred on the employee and the revenue generated by them and also
5
for manpower planning.
• The workplace design and production method should be adopted keeping in view
the human body and ergonomics so as not to waste energy and time of manpower.
• Considering the nature of the business as well as the size of the unit, the work process
should be continuously improved by implementing new concepts and technologies
coming into the market.
• The Growth of the unit requires constant innovation in the management. It should
be increased in these units.
• Encouraging improvement in the workplace enables the employee to innovate new
ideas. Here, this type of Encourages should be increased.
• Most of the recruitment process in the units is done directly, here, this process can
be done by ‘outsourcing’ (by the agency) to get more candidates selected as well as
to reduce the workload.
• Here, the employee is often encouraged by the ‘salary increase’, but since man is a
social animal, so other incentives should also be given keeping in view the time and
place.
• The more types of employees there are in a unit, the more 'specialization' there is.
These units have the highest proportion of four or more employees. Thus, even here,
‘specialization’ should be enhanced.
B. FINANCE MANAGEMENT
• The proportion of units that have received money from a bank or other financial
institution for the initial investment of the business is very low. Planning should be
done at the government or other institutional levels to make this more available.
• These units are less likely to plan for higher funding is given future requirements.
which should be increased.
• It is imperative to analyze the return and profitability of any business before
investing in it. Here, this type of analysis is done. However, its proportion should be
increased.
• To grow a business, it is necessary to invest the profits from other sources in addition
to the investment received from them. Here, this type of investment is reported.
• Planning is essential to maintain a certain amount of financial liquidity for day-to-
day expenses. Here, in most units, this type of planning should be increased.
• Financial accuracy is key to business success. It requires periodic profit-loss
analysis, budgeting as well as internal audits. Here, even though these works are
being carried out, its quality should be improved.
• Financial management requires the appointment of a person with experience,
knowledge, and qualifications in that field. Here, this proportion should be increased
as it is less reported.
C. MARKETING MANAGEMENT
• It is necessary to analyze and plan the market demand-supply so that the right
6
quantity of product reaches the market at the right time. Here, it is planned, but it
should be more precise and modern.
• It is necessary to constantly innovate the product according to the market demand
and the need of the customer. Here, the proportion of such units is higher. However,
systematic research should be enhanced.
• Competitive advantage can be gained by being aware of the changes taking place in
the market. Here, although this is kept in mind, this proportion should be increased.
• Along with the quality of the item, its out image is also important. The proportion
of units that seek the advice of external experts to improve it is low. So the
importance of the external appearance of the object in these units should be taken
into consideration.
• Its medium plays an important role in advertising a product. Therefore it is necessary
to choose the medium keeping in view the type of product, utility, etc. As the
usefulness of social media and the internet, as well as dissemination, is increasing
among other media today, various platforms/techniques of this medium can be used
in advertising. Here, the use of this type of medium is less reported which should be
increased.
D. PRODUCTION MANAGEMENT
• Here, in very few units, the place of production has been determined keeping in view
the labor force, procurement of raw materials, infrastructural facilities, and market,
which should be increased.
• In today's fast replace new technology in the manufacturing sector, awareness and
implementation should be increased in these units.
• The proportion of units producing by-products from waste is higher. However, the
by-product should be systematically manufactured keeping in view the low cost of
the main product.
• Awareness and implementation of modern manufacturing concepts and techniques
like ‘Six Sigma’, ‘Five S’, ‘Quality Circle’ as well as ‘Total Quality Management’
should be increased.
• To increase the quality of the product and keep the cost price low, the product of
every hundred should be analyzed. Which here, is less reported.
• A specific method should be adopted to keep the vacuum of errors in the product.
Here, this proportion is less reported. It should be increased.
• The proper arrangement according to the priority of the item in the workplace is
required to avoid wastage of manpower energy and time. Here, since this proportion
is less reported, it should be increased.
• The non-essential item has to be constantly removed so that it does not become a
hindrance to the production process. Which is done in these units.
• It is necessary to store a certain amount of raw material so that the production
process is not delayed in case of an emergency. Here, the proportion is lower, which
should be increased.
7
• The regularity of production depends on the availability of raw materials. Here, the
proportion of the unit’s receiving regular raw materials is low.
• Research work is required for the quality of the item as well as other improvements.
Which should be increased as the proportion is less in these units.
• To maintain consistency in the quality of goods/services, it is necessary to set the
internal quality control system as well as specific standards. Here, since this
proportion is less reported, it should be corrected.
• It is essential to understand the needs of the customer and seek his/her opinions to
produce the corresponding product/service. Here, this proportion should be
increased.
• Since the quality of the product depends on the quality of the raw material, it is
necessary to purchase the raw material according to certain standards. Here, this
proportion should be increased.
• ISO, as well as other institutes, certify the quality by audit the quality according to
certain standards. Here, since this proportion is less reported, certificates should be
obtained by increasing its awareness as well as pursuance.
• Here, the machine and the production method are given the most important to keep
low product cost. but its importance should also be taken into account as other
factors also play a part in it.
E. MANAGEMENT INFORMATION SYSTEM
• An adequate computer is used in these units to maintain accuracy and fast exchange
of information. But here, the use of modern techniques and software should be
increased as per the need.
• These units store, process, analyze, and occupation information related to human
resources, marketing as well as production by the computer. But since it is a primary
level, it should use modern techniques and software.
• Today the use of a computer is becoming inevitable in every department of the
business. Here, in most units, the employee has basic knowledge related to the
commuter.
6. SWOT ANALYSIS
The SWOT analysis of the managerial condition is done based on research statistics,
observations as well as information obtained through interviews. Which is as follows.
• S: Strengthen
• Procurement of human resources at the local level.
• Commitment, loyalty as well as the mentality of owners in working human resource.
• Investing after return analysis.
• Change Acceptability: Since no bureaucracy is bound by inertia here, acceptance
can be done quickly so it is easy to react in the market.
8
• A strong relationship with the customer.
• Ability to modify product/services of units as per customer requirements. This
entrepreneur or manager knows his customer better.
• Innovation and creativity thrive in this industry more than big companies immersed
in bureaucracy. Here, the small size of the unit allows for quick decision and
experimentation.
• W: Weaknesses
• Reaching potential customers is difficult: Reaching a potential customer in the
market involves a lot of financial costs behind marketing. It often cannot afford
industries of this caliber.
• Funding for these units is a major weakness. Many owners invest their money early
in the business. Banks or other financial institutions are reluctant to lend money
• These units have high production costs
• Lack of skilled workers: There is a shortage of skilled workers in these industries.
Resulting in; There is a deficiency in project identification, consulting services,
training, and skills development.
• Here, the use of information technology and its application is limited
• Other vulnerabilities include obtaining permits and licenses from state and local
bodies. Often the owner of the unit has to spend a lot of time and energy on these
tasks.
• Marketing is a weakness for these businesses. They face many problems in
marketing; Such as Lack of standards, Poor designing, Poor quality, Lack of
accuracy, Poor bargaining, Product size, Lack of quality control, Lack of after-sales
service, Distribution contacts, Lack of marketing knowledge.
• Neglect potential market etc.
• O: Opportunities
The Central and State Governments provide opportunities for the development of
MSMEs through policies and schemes. Which is as follows.
a) Prime Minister Employment Generation Programme and Other Credit Support
Schemes
o Prime Minister Employment Generation Programme(PMEGP)
o Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE)
o Interest Subsidy Eligibility Certificate (ISEC)
b) Development of Khadi, Village, and Coir Industries
o Science and Technology Scheme
o Market Promotion & Development Scheme (MPDA)
o Revamped Scheme Of Fund for Regeneration Of Traditional Industries
(SFURTI)
o Coir Vikas Yojana (CVY)
o Coir Industry Technology Upgradation Scheme (CITUS)
o Science and Technology (S&T) for Coir
9
o Skill Upgradation & Mahila Coir Yojana (MCY)
o Export Market Promotion (EMP)
o Domestic Market Promotion Scheme (DMP)
o Trade and Industry Related Functional Support Services (TIRFSS)
o Welfare Measures (Pradhan Mantri Suraksha Bima Yojana (PMSBY)
c) Technology Upgradation and Quality Certification
o Financial Support to MSMEs in ZED Certification Scheme
o A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship
(ASPIRE)
o National Manufacturing Competitiveness Programme (NMCP)
o Credit Linked Capital Subsidy for Technology Upgradation
o Marketing Support/Assistance to MSMEs (Bar Code)
o Lean Manufacturing Competitiveness for MSMEs
o Design Clinic for Design Expertise to MSMEs
o Technology and Quality Upgradation Support to MSMEs
o Entrepreneurial and Managerial Development of SMEs through Incubators
o Enabling Manufacturing Sector to be Competitive through QMS&QTT
o Building Awareness on Intellectual Property Rights (IPR)
d) Marketing Promotion Schemes
o International Cooperation
o Marketing Assistance Scheme
o Procurement and Marketing Support Scheme (P&MS)
e) Entrepreneurship and skill Development Programme
o Entrepreneurship Skill Development Programme (ESDP)
o Assistance to Training Institutions (ATI)
f) Infrastructure Development Programme
o Micro & Small Enterprises Cluster Development (MSE-CDP)
g) National SC-ST-HUB
h) Scheme of Information, Education, and Communication
• T: Threads
• Lack of timely payment: Goods/services produced by this industry are purchased by
big enterprises but the payment period is long.
• Low purchase price of manufactured goods and demand for some other discounts.
• Obstruction of certain laws and policy-rules.
• 'Dumping' of goods from other countries.
7. CONCLUSION
From the overall study, it can be said that modern and systematic management is required
to be enhanced in the management of this industry. In human resource management,
emphasis should be laid on employee training, skill development, the recruitment process
10
as well as reduction of employee turnover. There is also a need for a change in mental
attitude towards human resources. Financial management lacks bank or other institutional
funding for investment that needs to be removed. Marketing management needs to be
improved in terms of lack of specific standards, designing, quality, poor bargaining, product
size, quality control, after-sales service as well as increasing reach to potential customers,
etc. Production management requires constant innovation in the product/service, low cost
as well as an emphasis on the implementation of modern methods/techniques. While the use
of information technology and applications in management information systems should be
increased. However, following the above managerial aspect, the units are reported to be
functioning as per the department. This can be considered a progressive aspect.
Moreover, post COVID-19 situation focused to empower MSMEs. These measures are:
Definition level change for MSME, Credit and Finance Scheme, Allocating Fund of Funds
for Equity Participation, Relief in Non-Performing Asset, Clearing off dues to MSMEs and
Disallowing Global Tenders.
Action taken by Government of India after COVID-19 situation are Access to Information
Technology Enabled Services at an affordable cost would bring the MSME sector on a level
playing field with bigger players. To promote innovation and upscale MSMEs to withstand
global competitions. Technological upgradation of the MSMEs to minimize external risks
to tolerable levels. Encouraging corporatisation of the MSME sector Encouraging
innovations through setting up of large number of business incubators in educational
institutions; Formulation of long-term policies for the timely receipt of payments by
MSMEs.
References
• Annual Report (2017-18. Ministry of MSME, GoI.
• Borad, T. D. and Patel, S. P (January-2019), “A STUDY OF ‘KAIZEN’ PRACTICE IN
MSME”. Journal of Emerging Technologies and Innovative Research, 6, 517-524.
• Dr. Arunkumar Panda. (November-2017). “Empowerment of Indian's MSME”. Yojana, 5-8.
• Borad, T. D and Patel, S. P (February-2018). “ MSME ( Situation of
human resource management in MSME of India) published in Journal of Multi-Disciplinary, Knowledge
consortium of Gujarat, ISSN No- 2279-0268, December-2018, issue-22.
http://kcgjournal.org/kcg/wp-content/uploads/MultiDisciplinary/issue22/Issue22TusharBorad&DrSatishPatelN.pdf
• Gade, D. S. (2018). “MSMEs’ Role in Economic Growth – a Study on India’s Perspective”.
International Journal of Pure and Applied Mathematics, 18.
• Borad, T. D. and Patel, S. P (January-2020), “Micro, Small and Medium (MSME) in Indian
perspective and SWOT Analysis in the National Conference on Emerging Trends in
Management and Information Technology” organized by K. S School of Business Management,
Gujarat University, Ahmedabad, 8 February 2020.
• Borad, T. D. and Patel, S. P (2020), "Human Resource Management in MSME in Saurashtra
Region" Published in International Journal of Trend in Scientific Research and Development
(IJTSRD), ISSN: 2456-6470, Volume-4 | Issue-6, October 2020, pp.873-876,