impact of global finaicial crisis in indian sme

8/3/2019 Impact of Global Finaicial Crisis in Indian Sme

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1

Reproduced in this document is an example of a students PhD proposal which has

since been

developed successfully, and the student has now graduated from Hull. The work

developed a lot

from the original proposal for example, it became more interpretive and

qualitative in nature.

You will work with your supervisor during the course of your PhD to develop your

work

appropriately. The proposal below therefore should be read in this context. We are

making it

available to give you an idea of the sorts of things you need to think about inconstructing your

proposal. A good proposal will show that you have a decent understanding of what

you want to

explore and how you might do that, that you have engaged with the relevant

literatures, and that

you can say why you think your study will be significant or interesting.

You might also want to take a look at the Academic Profiles of CMOL faculty

members and see the

range of work they are engaged in, the sorts of methods they use, and try to

identify how your

study might relate to their interests.2

PROPOSAL FOR Ph.D. THESIS

Area of Study

MANAGEMENT IN THE LOCAL GOVERNMENT

Proposed Title:

STRATEGIC MANAGEMENT PRACTICES IN THE LOCAL

AUTHORITIES IN MALAYSIA:

FACTORS ASSOCIATED WITH THEADOPTION OF


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STRATEGIC MANAGEMENT PRACTICES IN THELOCAL

AUTHORITES IN MALAYSIA3

1. INTRODUCTION

Strategic management has been touted as one of the effective management tools

in strengthening organization performance through effective decision making and

systematic strategic formulation and implementation. Although strategic

management was more prevalent in the private sector since the concept was first

developed, the interest of using strategic management in the public sector has

increased over the last decade (Smith, 1994). Since 1980s there have been a

series of reforms taking shape in the public sector, resulting from increased

awareness on the importance of quality in the public sector. According to Osborne

and Gaebler (1992), that strategic management appeared to be part of a package

management innovations design to reinvent or modernize the public sector.

Strategic management was found to be an effective management tool in

transforming a bureaucratic public sector to a more responsive and innovative

administration.

Local Authority in Malaysia (LA) is a government at local level in the

Malaysian Three-tier, Administrative System. It is responsible in providing urban

services as well as implementing economic, social, physical and urban

development within its gazetted administrative boundary. The role of LAs as the

catalyst of economic development as well as political and social stability is

undoubtedly critical given its status, as the government at the third level with

certain

autonomy power measured to enhance the increasing demands from the

communities for a more customer-oriented and higher standard of urban services. It

is this context that the study intends to investigate to what extent strategic

management is being adopted and practiced by the LAs in Malaysia and to


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determine factors associated to LAs in adopting a strategic management framework

as suggested by the western literature.

2. PROBLEM STATEMENTS4

While strategic management is widely practiced by firms and other profit oriented

organizations in this country, its adoption by public sector particularly in

government

agencies at operational level is less understood. Strategic planning in Malaysia is

still insubstantial and unknown in the sense that there is an absence of documented

proof of its practice (Mohamad , 1988).

This study is undertaken to fill this knowledge gap. It is imperative to study on how

strategic management is being adopted by government agencies as a tool of

enhancing performance their performance. LAs are chosen as the setting because

of their significant role as the third tier government in Malaysia. Not only LAs are

important in the provision of urban services to the taxpayers, they are also critical

as a catalyst in economic growth and well-being for the country.

3. RESEARCH QUESTIONS

a) What is the extent of adoption of strategic management practices among the

LAs in terms of:

i) Completeness of systems;

ii) Established direction and mission;

iii) Depth of analysis;

iv) Implementation task and skills; and

v) Control and feedback mechanism

b) What are the contributing and impeding factors in the LAs in successfully

adopting the strategic management practices;

c) How do factors such as leadership traits, organization culture and organization

structure have impact in the degree of adoption strategic management by the


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LAs.

4. RESEARCH OBJECTIVES5

The main objective of the study is to examine the adoption of strategic

management

practices in the Local Authorities in Malaysia. In so doing, the study will seek:

a) to investigate the extent to which strategic management is adopted by the LAs,

in line with the strategic management framework that suite its environment;

b) to ascertain factors that contribute and impede the smooth adoption of strategic

management in the LAs;

c) to see how factors such as leadership traits, organization culture and

organization structure have impact in adopting strategic management in the

LAs; and

d) to highlight any other finding that are of interest and contribute towards the

subject of strategic management in government agencies.

5. SIGNIFICANCE OF THE STUDY

Finding of the research will add to the knowledge and understanding of the subject

of strategic management and its application by the LAs. This study should be

significant in the sense that it will:

a) Allow the identification of the concept and framework of strategic management

that takes into account the nature of work and environment of the LAs;

b) Support and enrich theory and model of strategic management in public

organizations that have similarities in their nature of service with the LAs;

c) Generate greater awareness among public organizations on the importance of

having a proper and practical strategic management framework as a vehicle to

organizational effectiveness;6

d) Provide useful knowledge on factors that might have impact and contribute to

the successful adoption of strategic management in public organizations.


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6. SCOPE OF THE STUDY

The study will take all the organization of LAs in Peninsular Malaysia as the setting.

Organization of the LAs will confine only to the office of the LAs, being secretariat or

the administrative arms of the LAs.

7. THEORETICAL FRAMEWORK OF THE STUDY

The objective of the study is basically two-pronged. Firstly s to examine the extent

of adoption of strategic management practices in the LAs and secondly is to see

how factors such as leadership traits, organization culture do and organization

structure have impact in the adoption of strategic management that suite the

environment of the LAs.

Gathering of data on the extent of strategic management adoption in the LAs

will be based on models of strategic planning by notable strategic management

gurus such as Steiner (1979) and Glueck (1982). Amongst the dimension to be

investigated are:

vi) Completeness of systems;

vii) Establish direction and mission;

viii) Depth of analysis;

ix) Implementation task and skills; and

x) Control and feedback mechanism

The theoretical framework of the study is depicted by the diagram below:7

Factors Associated With the Extent of Strategic Management

Adoption in the Local Authorities in Malaysia

Leadership Traits

Organization Culture Size

Organization Structure Income

INDEPENDENT MODERATING DEPENDENT


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VARIABLES VARIABLES VARIABLES

8. DEFINITION OF VARIABLES

The dimensions of each independent variable are have been identified as follows:

a. Leadership Traits

- Degree of ability

It refers to ability to organize, supervise and dealing with issues. This variable is

adopted from Jameson and Soule (1991);

- Degree of Visionary

It refers to ability to redefine the purpose of organization and embody new

purposes into structure and systems; ability to design long-term plan and ability

to forecast incoming issues. This variable is adopted from Bryson J.M (1988);

- Locus of Control

Locus of Control refers the extent to which individuals believe that they can

control events affecting them. Individuals who have a high internal locus of

control or referred to as internals, believe that the event in their lives are

primarily the result of their own behaviour and actions.

Individuals who have a high external locus of control or referred to as external,

on the other hand believe that the events in their lives and organizations are

Extent of Adoption of

Strategic

Management

Framework8

primarily determined by chance, fate or other people. This variable is adopted

from Julian Rotter (1966) and Burger J.M. (1986).

b. Organization Culture

- Level of Team work.


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Refers to desirability of the personnel to work in a group accomplishing a given

task or assignment.

- Level of Commitment,

Refers to willingness among the personnel to complete the task at their level

best and having sense of pride for achieving organizational task.

c. Organization Structure

- Degree of Authority.

Refers to clarity of line authority from top management to the lowest level;

clarity of duties, responsibilities and authorities of each role in the organization

and degree to which authority is delegated. Degree of structural flexibility in

terms of adopting changes. Adopted from Fayols fundamental management

functions.

- Extent of Coordination.

Refers to level of interdependence in work situations. How programs and tasks

are coordinated and what are the tools or mechanisms used to coordinate.

Adopted from Fayols fundamental management functions.

- Level of Communication

Refers to the existence of a strictly upward, downward and multidimensional

communication as oppose to a little two-way communication. Also refers to

level of participation of personnel in organization communication. Adopted from

Likerts Model of Organization Design.

d. Dimensions of Dependent Variable

The dimensions the dependent variable i.e. the extent of adoption of strategic

management by the Las will comprise of completeness of systems; established 9

direction and mission; depth of analysis; implementation task and skills; and

Control and feedback mechanism.


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The determination of those dimensions were based on Certo and Peter

(1990).These dimensions has been adopted with some modification from earlier

working of Steiner (1979), Van Gigch (1978) and Glueck (1982).

9. RESEARCH METHODOLOGY

Research Population

The population of this study is all Local Authorities (Las) in Malaysia. Currently

there 143 LAs nationwide with the break down of 97 in Peninsular Malaysia and

46 in Sabah and Sarawak. Nevertheless, this study will only take all Las in

Peninsular Malaysia as the setting. This is to ensure uniformity and

homogeneity as all Las in Peninsular Malaysia are created and governed by the

same law, i.e. Act 171 as opposed to LAs in Sabah and Sarawak which are

established and administered by their own states ordinance. All the 97 LAs in

Peninsular Malaysia come within three principal categories, namely City

Councils, Municipal Councils and District Councils. Table II shows the

distribution of local authorities according to various states in Peninsular

Malaysia.

Table II: Peninsular Malaysia: Local Authorities by States, 2004

State

No. of Local Authorities

City

Council

Municipal

Council

District

Council

Total


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Johore 1 4 9 14

Kedah 1 2 8 11

Kelantan 1 11 12

Malacca 1 1 1 3

N. Sembilan 3 5 8

Pahang 2 9 1110

Perak 1 3 11 15

Perlis 1 1

Penang 2 2

Selangor 1 7 4 12

Terengganu 1 6 7

Fed. Teritory 1* 1

Total 6 27 64 97

* Kuala Lumpur City Hall Source: Ministry of Housing and Local Government.

Unit of Analysis

Unit of analysis is organization i.e. the Local Authorities in Malaysia.

Data Gathering

A perception survey will be conducted to measure variables using structured

questionnaire. Questionnaire will be sent to all LAs via post. Measurement will use

Likert Scale. In addition, interviews will also be conducted at selected LAs to solicit

views from selected respondents especially top management in the LAs. Other

data will be gathered from records at Public Complains Bureau (BPA), departments

files, records and other documents. Secondary data will be obtained from relevant

Parliament Acts, relevant research and seminar papers, annual reports, statistical

abstract, magazines, newspapers and journals.

10. LITERATURE REVIEW


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Strategic Management An overview

Strategic management is defined as a systematic process for managing the

organization and its future direction in relation to its environment in a way that will

assure continuous success as well as secure from surprises (Ansoff 1984, Berry

1995). Strategic management encompasses the process of determining

organizations mission and goals; managing strategy formulation; strategy

implementation; and strategy control.11

Strategic management can be viewed as a series of steps covering the tasks

of analyzing the opportunities and threats that exist in the external environment;

analyzing the organizations strengths and weaknesses within the internal

environment; identifying agency stakeholders; establishing organizations mission

and goals; formulating strategies by matching the organizations strengths and

weaknesses with the environments opportunities and threats; implementing the

strategies; and finally engaging in strategy control activities to measure the

implementation progress and ensure achievement of the stated goals.

Ansoff (1984), clarifies that the first step in the evolution of strategic

management is known as strategic formulation, it began in 1950s when firms

started to invent a systematic approach in deciding on how and where the firms will

do its future business. The progress of which managers jointly formulate the

strategy was known as strategic planning. The term strategic management was

subsequently introduced to include environmental assessment and strategy

implementation. Thus, strategic management is defined as being where strategic

planning is coupled with strategy implementation.

Steiner (1979) and Barry (1986), argue that strategic planning and

management, regardless of why public and not profit organization engage in it, can

help an organization achieve the clarify future direction; think strategically and


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develop effective strategies; establish priorities; deal effectively with rapid

changingCircumstances; build teamwork and expertise; and solve major

organizational problems; and improve organizational performance.

Chart I: Generic Model of Strategic Management12

ENVIRONMENTAL OPPORTUNITIES

AND THREATS

Macroenvironment Industry

Environment

ORGANIZATIONAL DIRECTION

Mission and Goals

STRATEGY FORMULATION

Corporate Strategy

Formulation

Business Strategy

Formulation

Functional Strategy

Formulation

STRATEGY IMPLEMENTATION

Organization Structure

Leadership

Power

Organizational Culture

STRATEGY CONTROL

Performance

Local Authority in Malaysia

As the study will focus on strengthening the local Authorities, a general


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overview on the Local Authority in Malaysia is essential to form a context of the

study. Beginning with the creation of Committee of Assessors in Penang in 1801,

the administration of LA was subsequently governed by Sanitary Board Enactment

in 1907, before it was grouped into two major classifications namely Town Board

Enactment in 1945.

The administration of LAs falls under the jurisdiction of the State

Governments. In its capacity as a local government, LAs, perform a wide range of

functions. LAs are the provider of various urban services; the authorized parties in

the formulation of local and structural plan; catalyst for social and economic

development; caretaker of urban environment protection and cleanliness; and tax

and revenue collectors. Apart from Act 171 mentioned above, there are two more

prominent laws that form the power of LAs, namely the Town and Planning Act

1976 and the Street Drainage and Building Act 1974. In performing their

multifaceted functions, the LAs derive their revenues from various sources,

including

taxes, rents and license fees, profit from trade, services and undertakings, income

13

from property assessment and revenue from federal and state governments

(Ahmad Kamaruddin, 1999)

The issue on weaknesses of the LAs have been discussed time and again

by many interested and effected parties. The Chief Secretary to the Government, in

his opening speech at the Annual Working Meeting or Senior Officials of Local

Government Authorities in 1998, reiterated on the importance of LAs to improve

their service to the people through a strong communication and feedback system;

effective enforcement; high integrity and transparency; prudent financial

management system; enhancing people participation in their programs; and

continuous efforts in inculcating quality culture in their organizations. Further to

that,


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Dr. Mohd. Zin Mohamed in his paper, called for a re-examination of the LAs in

various areas including the organizational structure; the scheme of services; the

competency building program; and the new dimension of managing LAs in the

current changing environment. This study is undertaken to fulfil those expectations,

in line with governments policy to bring quality to the lower levels of the

administration, under the spirit of Excellent Work Culture Movement.

Creating strong and excellent LAs will benefit many parties including the

taxpayers; stakeholders; and the country as a whole. The roles of LAs in the

revitalization of the current economic slow down is highly critical. As the authority in

approving various permits and licenses for many types of trades and business, as

well as the authorized agency in issuing the Certificate of Fitness (CF) to all

residential, commercial and industrial buildings before they can be occupied and

operationalized, one could understand how an effective LAs could contribute to the

well-being of the country. As a frontline organizations dealing with the public at

grass-root level, the performance of LAs cannot but reflect the image and credibility

of the entire government.

Strategic Management in States and Local Governments14

The importance of strategic planning and management practice as an

effective tool in strengthening the performance in the states and local governments

has become a subject of interest in many developed countries since the last fifteen

years. In the US, concerted efforts have been undertaken to empower states and

local governments aimed at enhancing the capacity of these authorities. Much of

such efforts were sparked by the idea of strategic management and organizational

transformation inspired by Osborne and Gaebler in their Reinventing Government

(1992).

Wechsler conducted a survey in 548 state agencies in the United States in


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1995 to assess their experience in strategic planning and implementation. The

survey discovered that a majority of the agencies (60%) currently use strategic

planning and management in their organizations. It was also found that leadership

in the individual agency is the main factor (88%) for state agencies to initiate

strategic planning in their organization, while almost all respondents chose desire

to set program and policy direction as the most important objective of strategic

planning and management. It was also agreed almost unanimously that

clarification

of direction and goals is the most important outcome that strategic management

help achieve in their agency.

In the United Kingdom, a survey by Flynn, Talbot and Colin (1996) of over 600

UK public service senior managers in 1994 identified the element of competition as

a main driving force for local governments to revisit their existing service delivery

system. It was discovered that competition generates the need for a new strategic

thinking, strategy formulation and implementation. However, it was also revealed

that the undertaking of strategic planning in most local governments is normally by

state governments.15

Strategic Management Implementation Model

The Harvard Policy Model and the Stakeholder Management Model are two

common approaches to strategic management in the public sector (Bryson 1989).

The Harvard Policy model was developed as part of the business policy courses

taught at Harvard Business School since the 1920s. In the Harvard policy,

strategists assess organizational strengths and weaknesses, identify opportunities

and threats, and seek to coalign the organization with its environment.

Orgranization are rejoined to build on strengths, overcome weaknesses, exploit

opportunities, and block threats (Nutt & Backoff, 1992). Stakeholder approach to

strategic planning are concerned with identifying individual and organization actors


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who have an interest or in the focal organization and it strategic program. This

model placed important role on the leadership of an organization to maintain good

relationship with the stakeholder who have influence in agencys direction and its

capacity for realizing its strategy.

Factors that influence the successful implementation of strategic management from

internal organization point of view relate quite closely with the generic organization

development model suggested by management experts such as

Mc Kinsey, de Bono, Ishikawa to mention a few. Summary of factors contributing

to organizations excellence under generic organization development model is

tabulated in the table below.16

Variables Explanation Sources

Leadership Leadership is the main driver of organizations change.

Leadership will lead the direction, influence and

motivate the behavior of personnel to channel their

efforts into the desired direction.

Kroll (1992), Howe

and Kaufman, (1979),

Ansoff, (1965, 1984),

Bryson (1989)

Culture/

Behavior

Identification of the right attitudes and behavior of the

people is essential towards achieving strategy and

objectives.

Kroll, (1992), Hamel

& Prahalad (1994)


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Systems/

Process

Ability to perform and operate effectively rely heavily on

superior work systems and process

Kroll (1992), Howe

and Kaufman, (1979),

Ansoff, (1965)

Organization

Structure

An organization structure (OS) must be aligned to put

the strategy into effect. OS will cover responsibility and

authority; job definition and description; and line of

command.

Kroll, (1992) Ansoff

(1965)Bryson (1989)

Human

Resource

Architecture

Human resource is the ultimate resource. Thus a strong

organization must be supported by an effective HR

Management.

Hamel & Prahalad

(1994) Bryson (1989)

Technology

Architecture

Technology is key in coping with dynamic competitive


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situation

Ansoff (1984), Hamel

& Prahalad (1994)17

11. ORGANIZATION OF THE STUDY

The organization of the study is planned as shown below:

PART I: RESEARCH BACKGROUND AND METHODOLOGY

Chapter 1: Introduction, Objective and Scope of the Study

Problem Statements

Research Focus

Objective, Scope and Significance of the Study

PART II: LITERATURE REVIEW

Chapter 2: Local Government in Malaysia

History of the Local Authority (LA) in Malaysia

LA in the Malaysian Three-tier System of Government

Laws and Regulations Governing the LAs

Roles and Functions of LAs

Issues Confronting LAs

Chapter 3: A General Overview of Strategic Management

Concept and Definition of Strategic Management

Historical and Evolution of Strategic Management

Schools of Thought in Strategic Management

Strategic Management Model and Dimensions

Chapter 4: Research Methodology

Research Design

The Population

The Survey and Interview Techniques


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Data Analysis18

PART III ANALYSIS AND FINDINGS AND CONCLUSION

12. CONCLUSION

This proposal is the first step of an endeavour to embark on a comprehensive

study on strategic management adoption in the LAs in Malaysia. It important to

see the extent of adoption and organizational factors that influence the application

of a practical strategic management practice in the LAs. It is hoped that the output

of study will be beneficial to all parties concerned while at the same time

contribute to the knowledge enhancement in the academic world.

13. BIBLIOGRAPHY

Ansoff, H. Igor (1965), Corporate Strategy, Penguin Books.

Ansoff, H. Igor (1984), Implanting Strategic Management, Prentice Hall.

Barry B.W. (1986), Strategic Planning: Workbook for Non-Profit Organizations, St.

Paul, Minnesota.

Berry, FS and Wechsler, B (1995), State Agencies Experience with Strategic

Planning: Finding From A National Survey, Public Administration Review,

MarchApril, 1995, Vol.55, No.2.

Bryson, J.M. (1989), Strategic Planning for Public and Non Profit Organizations,

Jossey-Bass Publishers.

Certo and Peter (1990), Strategic Management Process, Singapore, Mc Graw-Hill.

Flynn, N and Talbot, C (1996) Strategy and Strategists in UK Local Government,

Journal of Management Development, _ Vol. 15, Issue 2.

Glueck, W.F., et. Al (1982), Four Faces in Strategic Management, in Journal of

Business Strategy, Winter.

Joyce, P. and Woods, A. (2001), Strategic Management, Kogan Page Limited,

London.19

Kamaruddin, Ahmad, Bringing Quality to the Local Level, in Muhammad Rais


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Abdul Karim (ed.) Reengineering the Public Service: Leadership and Change in an

Electronic Age (1999), Pelanduk Publications.

Khandwalla, P.N. (1977), The Design of Organizations, Harcourt Brace Jovanovich,

Inc., New York.

Zin, Mohamad, in MAMPU, (1998), Laporan Mesyuarat Kerja PihakBerkuasa)

Tempatan, Kuala Lumpur: Malaysian Administrative Modernization and

Management Planning Unit.

MAMPU, (2000), Laporan Mesyurat Kerja PihakBerkuasa Tempatan, Kuala

Lumpur: Malaysian Administrative Modernization and Management Planning Unit.

Mohamad, Zainal Abidin (1988), Strategic Planning: An Exploratory Study of Its

Practice by Agro-Based Enterprises in Malaysia. Thesis submitted for the Ph.D.

degree in Business Studies, University of Edinburgh.

Nutt, Paul C. And Backoff, R.W., (1992) Strategic Management of Public and Third

Sector Organizations, Jossey-Bass Publishers, San Francisco.

Osborne, D and Gaebler, T (1992), Reinventing Government, Addison-Wesley,

Reading, Mass.

Peter, W., Pringle, CD, & Kroll, MJ (1992), Strategic Management,Text and Cases,

Allyn & Bacon.

Smith R.J. (1994), Strategic Management and Planning in the Public Sector,

Longman, Harlow.

Steiner, G. (1979), Contigency Theories of Strategy and Strategic Management, in

Schendel D.E. & HOFER, C.W. (eds), Strategic Management: A View of Business

Policy and Planning, Boston: Little Brown.

Van Gigch (1978), Applied General Systems Theory, New York: Harper and Row.

Wilkinson D, and Pedler, M (1996), Whole Systems Development in Public

Service, Journal of Management Development, _ Vol. 15, Issue 2.20


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SYNOPSIS OF

GROWTH OF In2O3, CuInSe2 AND CuIn3Se5 FILMS AND

ION BEAM STUDIES OF THEIR INTERFACES WITH Si

A THESIS

to be submitted by

P. MALAR

for the award of the degree

of

DOCTOR OF PHILOSOPHY

DEPARTMENT OF PHYSICS

INDIAN INSTITUTE OF TECHNOLOGY MADRAS

CHENNAI-600 036, INDIA

1. INTRODUCTIOn

2.

3. 2. OBJECTIVES AND SCOPE OF THE WORk


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IMPACT OF GLOBAL FINAICIAL CRISIS IN INDIAN

SME(SMALL AND MEDIUM COMPANIES/ENTERPRISES)

WITH SPECIAL REFERENCE TO TEXTILE SECTOR IN

TAMILNADU

Name of the Author ;G.Vairava Subramanian

Degree applied for ; PHd In Economics Dept

Date of submission ; 05/08/2011

Version Status ;Draft

Document Version ; MS word

Intruduction


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Small & midsized companies with the overall revenue of 1 crore-100

crores are there in India which is contributing to overall

GDP(Gross Domestic Product) to the tune of 8-8.5 %. Being the

major source of employment provider for the semi skilled and

unskilled labor population of India, this segment is the most

respected segment in India.

The sector is more or less dominated in to all ancillary units for

almost all the segment across India, very precisely,

manufacturing segment. The promoter of this type of companies

are basically, the domain experts and they have very thorough

knowledge in their segment of operation. Basically this type of

entrepreneurs are getting developed by way of their previous

experience in to some other companies and with their contact

getting developed with the parent companies, gaining theconfidence about their marketability, this companies are getting

started.

The promoters are investing very small amount of money as their

initial investment and engage only semi skilled labour along with

their personal involvement in the business in the initial stage of

operation. Over the period of time, when they start growing,

they start expanding their operation.

The impact for this specific sector was mainly because of sudden boost in

pre melt down period. Some of the key and note worthy activitieshappened in the sector during pre melt down period are as follows


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The industry was over optimistic because of the over demand for

their products,( pre melt down period.) Without thinking

professionally, the promotor started expanding their capacity

with additional manpower, without understanding the fact that,

in case of failure.

The manpower was also expanded very aggressively, with the future

need of employment, also competing with big giants in terms of

salary.(Normally, this industry is not the highly paid industry and

the employees are also understanding their capacity more

precisely, the employees of this segment are more loyal to their

promotor, suddenly, when there was an increase in labor

shortage for the bigger giants, they started looking to hire this

space employees, Because of the compulsion, where, the small

entrepreneur was forced to retain the labor by way of increasingthe salary and other perks without foreseeing the negative

impact expected in to India).

The entrepreneur has also been encouraged by the huge order book

for his products from their parent companies, thereby started

expanding his capacity in terms of business as well as his

personal wealth, (expecting huge profit from the business

looking in the size of order to his company, he started

expanding his personal wealth by way of increasing in life style,

change of car, change of House, buying Jewells, entertainmentetc, which resulted in to huge monthly outflow of funds for his

personal wealth creation in addition to his corporate liability)

Increased facilities for the labour like, lunch, pickup-drop from their

houses, tea/coffee/snacks etc, has definitely dented the profit of

the company.

Due to enhanced order book, working capital requirements has to

be met with high cost borrowing from the private lender, with

the assumption of increased profitability will support forservicing the high cost borrowing.

Delay in payment has also increased their interest liability with the

bankers by way of excessive out flow of money as interest.


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Excessive raw material ordered for the enhanced production has

also pare allay made the entrepreneur to earmark excess funds

for the payment to be made, resulted in to more inventory than

the normal level of maintenance.

Shortage of power supply in the last 2-3 years in entire India hasresulted in to low productivity with higher labor cost, as labor

will sit ideally during the electricity failure.

RESEARCH AREA

The specific research to be done


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impact of global finaicial crisis in indian sme

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