CHAPTER TWO
REVIEW OF RELATED LITERATURE
1.0 Introduction
The research reviews literature and
detailed discussion of what the definition of small scale enterprises, its
characteristic, advantage and disadvantages. Problems of small scale business
government incentives. Failure signs and causes of failure will be extensively
in expounded in this chapter.
2.1 Definition Of Small Scale
Business
The definition of small scale
enterprises varies across the nation and the level of development at a given
period of time in practice, many standards have been adopted at various time to
fit particular government assistance, programmes legislation or research
studies thus, no univocal definition accepted. The institute for research
studies centre for management science of Delf University, Netherlands, in 1996
defines small scale business as “any business in which the manager personally
influence decision making without actually taking part in the production”
following this definition small scale centre can be classified under three
group first, handcraft and cottage industries which usually are establishments
employing up to nine person, second, small scale industries which are
establishment employing 10 – 19 persons. Third, medium scale industries which
are establishment employing 2,80 persons or more.
Nicolas C. Siropohis (1977: 42) shows the generic term associated to the small scale business
in a attempt towards a definition. He contends however with the fact that small
scale business has no universal accepted, definition. Yet he provided a working
considerable size. Capable of its total assets measuring the owner equity taken
proper records of the yearly sales and limited number of its employees in
Nigeria the industrial research centre at Ile Ife define a small scale business
industry as one whose total assets in capital are less than employing fewer
than so full – time workers this may be household, a college, a craft or a
factory industry and may or may not use multi power.
The Cross river state government use
the definition as given by the third national development plan “All the unit in
Cross river state included in the industrial directory are within our
definition of small scale industries (Cross River state of Nigeria official
document No 5 of 1977) thus the definition of small scale industries is a
capital investment not exceeding or service activity with equipment” The
national Development plan (1975 – 1980) But the most current definition given
by the federal government in 1996 budget by the minister of finance chief
Anthony Ani defined small scale business as any business with annual turnover
above N1 million”.
Many other authors also define small
scale business in their various ways. Thus HW
Brown and JH Longenecker (1971: 246) also expressed their views on small
scale business. Accordingly to their “A business may be described as small when
compared to large firm but large when compared with smaller ones.Due to
inflationary trends we shall adopt the definition given by the federal
government (minister of finance) for the purpose of this study.
To sum up. It will be observed that
small scale business enterprises does not have a generally accepted definition
but can be defined base on the person perception and the level of development
attained in that particular area in which the definition is being applied to
this end, one can easily say that there are as many definition of small scale
business as there are different economic system all over the world.
2.2 Characteristics Of Small
Scale Business Enterprises
In discussing the characteristic of
small scale business enterprises we adopt the work of Inuoha (1994) and N,wachukwu
(1990) before discussing their characteristics, it will be pertinent to mention
some business that can be operated under small scale as complied by Mr. A.O Akinyemi, in Nigeria
entrepreneur (June 1998) which are as follows:
·
Agricultural
and Agro – Allied industries
·
Leather
industry
·
Paper product
·
Textile
and associated industry metal and engineering
·
Service
enterprises
There is still other business that
could be operated under small scale business like wood and wood work,
traditional draft and cultural heritage, small business in Nigeria are
characterised by simple management, finance and production techniques. Apart
from these characteristics. There are other distinguishing characteristics. The manager/proprietor handle or supervisors
financing production, marketing and personnel of the enterprise.
Advantages
·
Lower
Capital Investment
The small business
general operates at a lower cost due to relatively low investment in plants and
equipment. it is also apply simple and appropriate technology where necessary
and appropriate the organization fall within the financial reach of any potential
investors and the demand for sponsors of equity is not too tasking.
In area where there is
scarcity of indigenous entrepreneurial skills small enterprises established for
relatively little capital investment can serve as training ground for the
development of entrepreneurial skill.
·
Flexibility
Of Management
Small business does not
require the specialization of the modern complex management techniques since
small business is flexible it can be operated 5/so easily by any individual
that wishes to go into the small sale business enterprises.
·
Responsiveness
To Local Needs
Most customers are
loyal to certain business because of the clo9se personal relationship between
the owner and employee .This in part is due to the fact that the business
response to the local peculiarities of the community where the business is
located.
·
Contribution
To Economic Development
The raw materials of
most small scale business are sourced locally and could save some foreign
exchange for the government. They are labour intensive and therefore more
employment potential, which means that they are likely to have a light capacity
of job creation for the unemployed.
for complete project material, visit www.researchshelf.com
No comments:
Post a Comment