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It’s Entrepreneurship and beyond leadership in a small scale enterprise which gains more focus. This is nothing to do with the choice which the Entrepreneur or the business or the other stakeholders make but that is the art of survival. The value/focus on attributes of the founder would be enterprising than leadership.  By structural characteristic, a small scale enterprise is different in many ways compared to large scale corporation.   This note is based on a study of various small scale enterprises for the last 50 years.

1. It is generally initiated by a single person with his intrinsic passion in his core area of strength: Engineering/Agriculture/Pharma/medicine/Service, etc.

2. This single person’s initiation can lead to a multiple group (within family or friends) or it can be a lonely venture to start with.

3. The journey starts with an incremental grasping of the entire gamut of the business – it is time consuming and gets into all “nervous system” of the business – inventory and sales – bound by a simple profit/loss accounting system.

4. It is not “academic/qualification” based beginning.  Most of the large corporations was born out of passionate entrepreneurs, who do not have “fancy degrees from famous Institutions”.

5. There is an element of “sacrifice” in their business journey.   A single minded focus on building the business.


6. It also revolves around the “fundamental” business values created by the entrepreneur.

7. As far as they stick to these fundamentals – business values and focused – very few small scale enterprises have wilted under pressure.  We could observe that small scale enterprises, who could not sustain the business in whatever form/structure, mainly, was due to:

• Their inability to manage the affairs due to ambition to grow fast,

• Non-interest of second generation on the business, and their move to move to their interested areas.

• Split of business amongst the team, who have initiated the business

Therefore, a small scale enterprise is run with the following management characteristics, and challenges.  These challenges become monumental for a few to grow into large business organisation and they continue to grow in the same space and pace.

Characteristics Challenges    

• High Control – Micro Management                       Delegation – letting go “of Control”

• Centralised decision making                                Decentralisation of Decision making

• Focus on Short-term                                         Bringing Long-term perspective

• Lack of seamless - systems and process                Building seamless Systems and process

• Reasonably cash rich, debt free                           Fund availability & debt management

• Highly cost-sensitive                                           Focus on result oriented expenses

• Focus always on the Entrepreneur                       Building succession -early process.

 

Any small scale enterprise, who could manage these challenges have grown substantially over the last 30 years and also could bring in their second generation into the same business more successfully and expand the business into even very large Corporations in the last 5 decades of Indian Business scenario.  A glimpse of this can be seen even in global business scenario.

 

Author: Mr.Baburaj Nair, Chief People Office of Rasi Group has around 30 years of exposure to Social, Academic, Consulting and Corporate organisations.  He is a prolific writer and speaker on management areas and known for bringing different perspectives on various subjects, especially on small scale organisations.

 

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