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A

WINTER RESEARCH PROJECT REPORT

ON

ROLE OF SMALL SCALE

INDUSTRIES IN ENTERPRENERSHIP

DEVELOPMENT

Submitted in partial fulfillment of the requirement for

the award of degree

Of

MASTERS OF BUSINESS ADMINISTRATION

SESSION (2011-2013)

SUBMITTED TO:- SUBMITTED BY:-

Ms. Megha Bhatiya Name: Priyanka

Gautam

(Assistant Professor) Class: MBA B

IFTM UNIVERSITY College Roll No.

11021146

MORADABAD

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IFTM UNIVERSITY MORADABAD

INTRODUCTION

SMEs are deeply affected by the globalization of the markets, which is forcing all

firms to act and think more globally. The world economy, the liberalization, the

increasing globalization, the internal market of the EU, e-commerce, and other

institutional changes are gradually shifting the behavioural pattern of the SMEs.

As far as the SME sector is concern, there is a logo for the 3rd Millennium: Think

global - Act local. The majority of the SMEs are working within the framework of a local

environment. Their consumers are their neighbours and in the vicinity of their

village/city/county/region. This is their strength and opportunity. However, they have to

act taking into consideration the influence and external factors of the globalization, the

particular stage of internationalisation including challenges of the competitive market

players, environment concerns, sustainable economic growth, international standards, and

information technology.

SMALL SCALE INDUSTRIES

Introduction

Small-scale industries play a key role in the industrialization of developing country.

This is because they provide immediate large-scale employment and have a

comparatively higher labour-capital ratio; they need a shorter gestation period and

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relatively smaller markets to be economic; they need lower investments, offer a method

of ensuring a more equitable distribution of national income and facilitate an effective

mobilisation of resources of capital and skill which might otherwise remain unutilized;

and they stimulate the growth of industrial entrepreneurship and promote a more diffused

pattern of ownership and location.

More recently, enhancing small-scale industries has been viewed as an effective way

of fostering the private sector's contribution to both the growth the equity objectives of

development.

SCOPE OF SMALL INDUSTRY

The importance of small-scale enterprises is a global phenomenon encompassing

both the developing and developed countries. Normal McRae (1979) predicts that the age

of Mammoth Corporation was over and the future lay with small, dynamic, efficient

production groups that could respond quickly to customer needs. Globally, the emphasis

is on the small enterprises holding the key to growth with equity and proficiency. .

In India, small industry refers to manufacturing activity. Recently, it has also

come to include, to a limited extent, servicing activities such as repair and maintenance

shops and few community services. It does not include wholesale and retail trading as is

done in Japan or the UK.

THE MEANING OF SMALL

Use of "Small" as a designation in industry differentiates one set of industries from

others. Comparatively small in operation, employment, products, capital, technology etc.

Thus, this small sector share unique problems compared to others. In the case of

manufacturing units, small industries are to be expected to have a unique set of problems

in relation to their 'smallness' that differentiates them from medium and large

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manufacturing units. At the same time, the small sector has unique advantages. And, as

such small is not only beautiful, but also beneficial, efficient and reliable.

Classification

Small-scale Industries are broadly classified into two sectors.

Traditional Industries

(1) Khadi and Village industries (96)

(2) Handlooms,

(3) Handicrafts,

(4) Coir, and

(5) Sericulture.

SSI Units

(1) Small-Scale Industrial undertakings,

(2) Export-oriented SSI units,

(3) Ancillary Industrial undertakings,

(4) Tiny Enterprises,

(5) Small-scale Services and Business Enterprises, and

(6) Powerlooms.

According to the second SSI census 50.2 per cent of the units were engaged in

manufacturing assembly only. Of the total SSI units, 96.2 per cent were SSI units, 0.5

percent was ancillary, 0.7 per cent were export-oriented and 2.5 per cent were Small

Service Establishments.

Of the SSI units 95.9 percent units were Tiny Enterprises and 87.8 percent units

employed less than 10 workers.

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The classification of the size, structure of manufacturing units in terms of the

monetary value of paid-up capital or fixed assets or plant and machinery is problematic

for a number of reasons including difficulties of measurement and poor data availability.

Smallness by itself does not identify any set of unique problems common to all

small businesses. Instead, smallness identifies a hodgepodge of businesses ranging from

family-owned neighbourhood stores to venture-capital owned, innovative computer

manufacturing firms. Identification of problems common to such widely differing

business entities clearly is difficult. Policy makers have the choice either of becoming

mired in a plethora of minutiae by prescribing policies for each retail store, service

station, or computer manufacturing firm almost individually, or of seeking a new, more

useful segmentation of the small industry sector that identifies common problems

amenable to policy prescriptions.

Concept of Small Enterprises

The definition of small enterprises varies from one country to another. In most of

the countries of the world, the criterion for defining a small enterprise is related to the

size of employment. For instance, in USA, small business is one which has employment

of less than 500 people. In U.K., it is less than 20 skilled workers, in Germany less than

300 workers, in Sweden and Italy less than 50 and 500 people respectively. In some

countries both employment and investment are taken into account. In Japan, the

investment in industrial undertakings should not exceed 100 million employing not more

than 300 employees. In South Korea, investment limit is 21akh dollars and employment

limit being 200 people.

The definition of small industry is an important aspect of government policy as it

identifies the target groups. The first official criterion for small-scale industry dates back

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to the Second Five Year Plan when it was in terms of gross investments in land, building,

plant and machinery and the strength of the labor force. Subsequently, on the

recommendation of the Federation of Association of Small Industries of India (F ASII),

an apex level organization of small-scale industry, set up under the aegis of the Ford

Foundation team, only the investment in fixed assets in plant and machinery, whether

held in ownership terms or by leese or by hire-purchase, instead of fixing the limit on

overall investment, was considered for granting the status of a SSI unit. From time to

time, there have been many changes in the ceiling limit of investment in plant and

machinery. In the beginning, for a small-scale industry the investment level was Rs. 5

lakhs and employment limit of less than 50 persons when using power and less than 100

persons without using power.

The term "small-scale industries" has been defined in three ways. The conventional

definition includes cottage and handicraft industries which employ traditional labour-

intensive methods to produce traditional products, largely in village households. They

employ none or almost a few hired hands. The handloom textile industry is an example.

Though once famous, this sector has been steadily declining.

THE ROLE OF SMALL-SCALE INDUSTRIES

Small-scale industries contribute significantly to social and economic

development objectives such as labour absorption, income distribution, rural

development, poverty eradication, regional balance and promotion of entrepreneurship. In

fact they play an important role in the process of a country's industrial development.

.

Particularly in developing countries, small labour intensive industries have been

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favoured basically to create employment opportunities in an economy with abundant

unskilled labour even though such industries may not always be supported on grounds of

economic efficiency. In addition, a low capital requirement, given an appropriate market

environment, is believed to stimulate growth of numerous indigenous industries with

wide regional dispersal. This helps to promote balanced growth, more equitable income,

distribution, as well as diversification of the industrial structure which often leads to

increased utilization of national resources. The process, if properly, nurtured, can help the

entrepreneurial class and boost capital formation as well as growth of industries in the

small sector in urban and rural areas. Such a process creates the basis for transformation

of technology, management and pave the way for creative development while sustaining

national heritage and skills. It will also pave the way for the growth of right type of

entrepreneurship in the country.

The major objective of the chapter is to evaluate the role of small-scale industries

in the country's growth experience.

Empirical studies have shown that small-scale enterprises are an important vehicle

for meeting the growth and equity with social justice objectives of developing economies.

In the Indian context, they playa key role in the economic development of the country.

What is more, they also act as a breeding ground for entrepreneur. In the post-

independence period, as many as 18 million entrepreneurs have established enterprises in

this sector and contributed to the advancement of industry in the country. More

importantly, it is a stepping stone for entrepreneurs to grow from small to big. It provides

implant training to millions of entrepreneurs and motivates them to become innovative

entrepreneurs to improve the economy. As such, development of small-scale industries

should be given special attention.

Promotion of small-scale industries has been one of the main strategies for

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economic development in the developing countries since the 1950s. The special feature of

the planning in India is that it does not stop at giving conceptual emphasis to the growth

of small-scale industries, but it has in particular drawn up a concrete and constructive

planned programme to attain the planned objectives. The development of small-scale

industries as the focal point of industrial development is evidence of the awareness of the

Government to propagate and develop this sector for the ultimate objective of tackling the

all-prevailing and ever-growing problem of unemployment.

Agriculture supplies certain indispensable primary requisites - food for the

population, raw materials for industries and surplus products for exports. No country,

which aspires to be reasonably self-supporting, can do without agriculture. At the same

time, no nation in modem times has grown .rich through agriculture alone. With the

growth of civilisation and the multiplication of human wants, the occupations associated

with manufacturing industries have increased in importantce and are very remunerative.

Industrialisation has become a necessity and is virtually synonymous with civilisation.

Small-scale industries play an important role in the productive activities of developed as

well as developing countries.

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OBJECTIVES OF THE STUDY

1.To study the concept of Small-Scale Industry.

2.To study the various types of Small Scale Industries.

3.To study the impact of Globalization on Small Scale Enterprises.

4.To study the policies governed by Government for overcome this problem.

5.To study the various dominating factor which the global companies have.

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REVIEW OF LITERTURE

GLOBALIZATION

Globalization refers to increasing global connectivity, integration and interdependence in

the economic, social, technological, cultural, political, and ecological spheres.

Globalization is an umbrella term and is perhaps best understood as a unitary process

inclusive of many sub-processes (such as enhanced economic interdependence, increased

cultural influence, rapid advances ofinformation technology, and novel governance and

geopolitical challenges) that are increasingly binding people and the biosphere more

tightly into one global system.

There are several definitions and all usually mention the increasing connectivity

of economies and ways of life across the world. The Encyclopedia Britannica says that

globalization is the "process by which the experience of everyday life ... is becoming

standardized around the world." While some scholars and observers of globalization

stress convergence of patterns of production and consumption and a resulting

homogenization of culture, others stress that globalization has the potential to take many

diverse forms.

In economics, a broad definition is that globalization is the convergence of prices,

products, wages, rates of interest and profits toward developed country norms.[2]

Globalization of the economy depends on the role of human migration, international

trade, movement of capital, and integration of financial markets. The International

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Monetary Fund notes the growing economic interdependence of countries worldwide

through increasing volume and variety of cross-border transactions, free international

capital flows, and more rapid and widespread diffusion of technology.Theodore Levitt is

usually credited with globalization's first use in an economic context.

Trends

Globalization has various aspects which affect the world in several different ways:

1.Industrial (alias trans nationalization) - emergence of worldwide production markets

and broader access to a range of goods for consumers and companies

Financial - emergence of worldwide financial markets and better access to external

financing for corporate, national and subnational borrowers

1. Economic - the realization of a global common market, based on the freedom of

exchange of goods and capital.

2. Political - Political globalization is the creation of a world government which regulates

the relationships among nations and guarantees the rights arising from social and

economic globalization. [4]

3. Informational - increase in information flows between geographically remote

locations

4. Cultural - growth of cross-cultural contacts; advent of new categories of

consciousness and identities such as Globalism - which embodies cultural diffusion,

the desire to consume and enjoy foreign products and ideas, adopt new technology and

practices, and participate in a "world culture".

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10.The push by many advocates for an international criminal court andinternational

justice movements.

Since World War II, barriers to international trade have been considerably lowered

through international agreements - General Agreement on Tariffs and Trade (GATT).

Particular initiatives carried out as a result of GATT and the World Trade Organisation

(WTO), for which GATT is the foundation, have included:

Promotion of free trade

1. Reduction or elimination of tariffs; construction offree trade zones with

small or no tariffs

2. Reduced transportation costs, especially from development of

containerizationfor ocean shipping.

3. Reduction or elimination ofcapital controls

4. Reduction, elimination, or harmonization ofsubsidiesfor local businesses

Intellectual property restrictions

1. Harmonization of intellectual property laws across the majority of nations, with

more restrictions.

2. Supranational recognition of intellectual property restrictions (e.g. patents granted

by China would be recognized in the United States)

Historical precedents

The term "globalization' was coined in the latter half of the twentieth century, and the

term and its concepts did not permeate popular consciousness until the latter half of the

1980s. Various social scientists have tried to demonstrate continuity between

contemporary trends of globalization and earlier periods..

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http://en.wikipedia.org/wiki/International_criminal_courthttp://en.wikipedia.org/wiki/International_Court_of_Justicehttp://en.wikipedia.org/wiki/International_Court_of_Justicehttp://en.wikipedia.org/wiki/International_Court_of_Justicehttp://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Tradehttp://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Tradehttp://en.wikipedia.org/wiki/World_Trade_Organisationhttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Free_trade_zonehttp://en.wikipedia.org/wiki/Free_trade_zonehttp://en.wikipedia.org/wiki/Containerizationhttp://en.wikipedia.org/wiki/Containerizationhttp://en.wikipedia.org/wiki/Capital_controlshttp://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/International_criminal_courthttp://en.wikipedia.org/wiki/International_Court_of_Justicehttp://en.wikipedia.org/wiki/International_Court_of_Justicehttp://en.wikipedia.org/wiki/General_Agreement_on_Tariffs_and_Tradehttp://en.wikipedia.org/wiki/World_Trade_Organisationhttp://en.wikipedia.org/wiki/Tariffhttp://en.wikipedia.org/wiki/Free_trade_zonehttp://en.wikipedia.org/wiki/Containerizationhttp://en.wikipedia.org/wiki/Capital_controlshttp://en.wikipedia.org/wiki/Subsidyhttp://en.wikipedia.org/wiki/Intellectual_propertyhttp://en.wikipedia.org/wiki/Patenthttp://en.wikipedia.org/wiki/China


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Globalization is a centuries long process, tracking the expansion of human

population and the growth of civilization, that has accelerated dramatically in the past 50

years. Earlier forms of globalization existed during the Mongol Empire, when there was

greater integration along the Silk Road. Global integration continued through the

expansion of European trade, as in the 16th and 17th centuries, when the Portuguese and

Spanish Empires reached to all corners of the world. The effects on European industries

were notable, e.g. the Silver Mining in Schwaz,Austria was partly abandoned, as silver

was available from the Spanish colonies for lower prices.

Globalization became a business phenomena in the 17th century when the first

Multinational was founded in The Netherlands. During the Dutch Golden Age the Dutch

East India Company was established as a private owned company. Because of the high

risks involved with the international trade, ownership was divided with Shares. The Dutch

East India Company was the first company in the world to issue shares, an important

driver for globalization.

Liberalization in the 19th century is often called "The First Era of Globalization",

a period characterized by rapid growth in international trade and investment, between the

European imperial powers, their colonies, and, later, the United States. The "First Era of

Globalization" began to break down at the beginning with the first World War, and later

collapsed during the gold standard crisis in the late 1920s and early 1930s.

Globalization in the era since World War II has been driven by advances in

technology which have reduced the costs of trade, and trade negotiation rounds, originally

under the auspices ofGATT, which led to a series of agreements to remove restrictions

on free trade. The Uruguay round (1984 to 1995) led to a treaty to create the World Trade

Organization (WTO), to mediate trade disputes and set up a uniform platform of trading.

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Other bi- and trilateral trade agreements, including sections of Europe's Maastricht Treaty

and the North American Free Trade Agreement (NAFTA) have also been signed in

pursuit of the goal of reducing tariffs and barriers to trade.

The world increasingly is confronted by problems that can not be solved by

individual nation-states acting alone. Examples include cross-boundary air and water

pollution, over-fishing of the oceans and other degradations of the natural environment,

regulation of outer-space, global warming, international terrorist networks, global trade

and finance, and so on. Solutions to these problems necessitate new forms of cooperation

and the creation of new global institutions. Since the end of WWII, following the advent

of the UNand the Bretton Woods institutions, there has been an explosion in the reach

and power ofMultinational corporations and the rapid growth ofglobal civil society.

The Global scenario group, an environmental research and forecasting

organization, views globalization as part of the shift to a Planetary Phase of Civilization,

characterized by global social organizations, economies, and communications. The GSG

maintains that the future character of this global society is uncertain and contested.

Measuring globalization

Looking specifically at economic globalization, it can be measured in different

ways. These centre around the four main economic flows that characterize globalization:

Goods and services, e.g. exports plus imports as a proportion of national income or per

head of population

Labor/people, e.g. net migration rates; inward or outward migration flows, weighted by

population

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http://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Pollutionhttp://en.wikipedia.org/wiki/Natural_environmenthttp://en.wikipedia.org/wiki/Natural_environmenthttp://en.wikipedia.org/wiki/UNhttp://en.wikipedia.org/wiki/UNhttp://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Global_civil_societyhttp://en.wikipedia.org/wiki/Global_scenario_grouphttp://en.wikipedia.org/wiki/Planetary_Phase_of_Civilizationhttp://en.wikipedia.org/wiki/Planetary_Phase_of_Civilizationhttp://en.wikipedia.org/wiki/Maastricht_Treatyhttp://en.wikipedia.org/wiki/North_American_Free_Trade_Agreementhttp://en.wikipedia.org/wiki/Pollutionhttp://en.wikipedia.org/wiki/Natural_environmenthttp://en.wikipedia.org/wiki/UNhttp://en.wikipedia.org/wiki/Bretton_Woods_systemhttp://en.wikipedia.org/wiki/Multinational_corporationhttp://en.wikipedia.org/wiki/Global_civil_societyhttp://en.wikipedia.org/wiki/Global_scenario_grouphttp://en.wikipedia.org/wiki/Planetary_Phase_of_Civilization


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Capital, e.g. inward or outward direct investment as a proportion of national income or

per head of population

Technology, e.g. international research & development flows; proportion of

populations (and rates of change thereof) using particular inventions (especially

'factor-neutral' technological advances such as the telephone, motorcar, broadband)

To what extent a nation-state or culture is globalized in a particular year has until

most recently been measured employing simple proxies like flows of trade, migration, or

foreign direct investment, as described above. A multivariate approach to measuring

globalization is the recent index calculated by the Swiss Think tank KOF. The index

measures the three main dimensions of globalization: economic, social, and political. In

addition to three indices measuring these dimensions, an overall index of globalization

and sub-indices referring to actual economic flows, economic restrictions, data on

personal contact, data on information flows, and data on cultural proximity is calculated.

Data are available on a yearly basis for 122 countries. According to the index, the world's

most globalized country is Belgium, followed by Austria,Sweden, the United Kingdom

and theNetherlands. The least globalized countries according to the KOF-index are Haiti,

Myanmarthe Central African Republic and Burundi.

Measuring Attitudes to Globalization

Measurement of attitudes toward globalization were sought after in a 2003

worldwide globalization study. The study focused on teenagers' perceptions towards

globalization and globalism, because soon they will be the adults living out the results of

today's policy. The study examined the thesis of: Teenagers are natural globalists &

Teenagers are afraid of globalization. The sample for this study included two hundred

teenagers between the ages of 14 and 18, from New York, Lebanon, Azerbaijan, and the

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http://en.wikipedia.org/wiki/Think_tankhttp://www.globalization-index.org/http://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Haitihttp://en.wikipedia.org/wiki/Haitihttp://en.wikipedia.org/wiki/Myanmarhttp://en.wikipedia.org/wiki/Central_African_Republichttp://en.wikipedia.org/wiki/Burundihttp://en.wikipedia.org/wiki/Burundihttp://www.globalfuture.net/2006/11/research-on-teenagers-attitudes-toward.htmlhttp://www.globalfuture.net/2006/11/research-on-teenagers-attitudes-toward.htmlhttp://en.wikipedia.org/wiki/Think_tankhttp://www.globalization-index.org/http://en.wikipedia.org/wiki/Belgiumhttp://en.wikipedia.org/wiki/Austriahttp://en.wikipedia.org/wiki/Swedenhttp://en.wikipedia.org/wiki/United_Kingdomhttp://en.wikipedia.org/wiki/Netherlandshttp://en.wikipedia.org/wiki/Haitihttp://en.wikipedia.org/wiki/Myanmarhttp://en.wikipedia.org/wiki/Central_African_Republichttp://en.wikipedia.org/wiki/Burundihttp://www.globalfuture.net/2006/11/research-on-teenagers-attitudes-toward.html


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Philippines. The locations were urban. There was a survey administered with input from

Gene Ellis, a professor (Wirtschaftswissenschaft Seminar) at the Eberhard Karls

University of Tuebingen, and global consulting principal, economist, and former World

Bank employee Andrew Mack.

Topics of globalization and globalism were grouped into sub-categories.

Globalization categories included immigration, trade, and diplomatic relations. Globalism

included consumption, personal freedoms, technology, and culture.

The results of the research suggested that both American teenagers and

international teenagers are natural globalists and are largely in favor of globalization.

Teenagers in New York had higher levels of support for globalization than globalism.

International teens were more globalists. Importantly, all teens were very positive towards

technology, cultural exchange, trade, consumption of international goods, and

immigration.

The study suggested that the future of international technology, trade, and culture

will depend on bringing the concepts of globalization and globalism together. More so,

the Internet seems to be one of the most important tools in linking teenagers globally and

this suggests that this sort of communication should be developed around the world at a

faster rate. Finally, it was suggested that the future of culture and trade will depend on the

rate of technological progress.

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RESEARCH METHODOLOGY

The Advanced learners Dictionary of current English lays down the meaning of

research as a careful investigation on inquiry especially thorough search for new facts in

any branch of knowledge.

RESEARCH METHODOLOGY

1. It is a way to systematically solve the research problem.

2. It may be understand as a science of studying how research is done scientifically.

3. In it we study the various steps that are generally adopted by a researcher in

studying his research problem along with the logic behind them.

THE ELEMENTS ON WHICH RESEARCH IS DESIGNED ARE AS FOLLOWS:

1. EXPLORATORY RESEARCH

Search of secondary data and literature research.

Survey of knowledgeable persons or experience survey.

Case study

2. SECONDARY DATA

Secondary data are statistics not gathered for the immediate study at hand but for

some other purposes.

They may be described as those data that have been compiled by some agency

other than user.

TYPE OF RESEARCH

Analytical Research: In this type of research, researcher has to use or information

already available & analyze these to make a critical evaluation of the material.

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Fundamental Research: It is mainly concerned with generalizations & with the

formulation of the theory.

Qualitative Research: It is concerned with qualitative phenomenon i.e. phenomena

relating to or involving quality or kind.

EXTERNAL SECONDARY DATA:

They are generally published and are available in different sources.

Means of the sources are :

1. Libraries

2. Literature

3. Periodicals

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DATA ANALYSIS & INTERPREATION

Internationalization is one of the most difficult choices to make because it implies

numerous risks for the small and medium-sized enterprises (SME), which is already very

limited in its resources. Many SMEs, which act prosperously locally, fail in foreign

markets. The SMEs are deeply affected by the rapid globalization. SMEs, which are

newcomers of the new economic order in the majority of the emerging market economies

as well as in countries in transition, have to be prepared to the challenges of the opening

market economies, especially for the consequences of the enlargement of the EU.

Joining of Austria to the EU brought Austrian SMEs new opportunities but also

considerable threats. Gaubinger Kurt in his dissertation highlights, that the huge chance

lies in the internationalization of businesses of the SMEs using the enlarged economic

area, however, therefore the SMEs become in confrontation with a more complex and

dynamic environment. From this it follows that the marketing-management in SMEs

needs an adapted system of planning- and control-tool to secure and strengthen their

competitiveness in Europe.

Among the principle questions raised in the domain of international strategic

management of SMEs is that which is fundamentally related to the choice of strategic

maneuvers available to the company.

Numerous international strategies for the SME have been analysed and advanced

in recent years by OECD countries, but there exist a notable divergence as to the

importance and the utilization. However, an area, which has obtained fairly limited

attention, including the EU, is the internationalization process of SMEs.

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Since 1989, the CEI region has been undergoing a process of transformation of its

political, economic and social systems. The core element of the political and economic

transformation of any country in transition is the creation of a sound private sector and

further development of SME & entrepreneurship. These are considered one of the

principal driving forces in economic development. SMEs promote private ownership,

stimulate innovations and develop entrepreneurial skills. Their flexibility enables them to

match quick changes in market demands. They generate the majority of jobs, promote

diversification of economic activities, support sustainable development and make a

significant contribution to exports and trade. SMEs are vibrant and innovative and they

can adapt to changing circumstances and become the main engine in the economy and

society.

Seven million of SMEs in 16 CEI Member States employ over 25 out of 80

million employees in total, while the number of unemployed amounts to 9.2 million. With

a purpose to facilitate the transition process, increase the competitiveness of the

economies and reduce unemployment, a more supportive environment should be created

for SMEs.

The concept of internationalization of enterprises comes to the force some twenty

years ago. We have gone from the idea that internationalization is taking place through

export-import activities and foreign direct investments (FDI), but we have to

acknowledge, that there is more than these ways of behaving in the international market.

By international strategy, under internationalization of enterprises we mean the group of

maneuvers or coordinated actions, which an enterprise may take to penetrate other

markets or to benefit from resources originating from other markets.

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GLOBALIZATION AND ITS CONSEQUENCE TO THE SMEs

"Globalization is an ongoing process that presents opportunities; as well as risks

and challenges. It has expanded the prospect for technological advances and for effective

integration into the international economy. It has increased prosperity and the potential

for countries to benefit. However, globalization also raises the risk of marginalization of

countries, in particular the poorest countries, and the most vulnerable groups everywhere.

Income gaps within and among countries remain wide, and the number of people living in

poverty has increased. Asymmetries and imbalances in the international economy have

intensified. Instability in the international financial system continues to be a serious

problems and requires urgent attention."

Kofi Annan, Secretary General of the United Nations, in his opening address in

Bangkok expressed his hope to launch very soon a new round of trade negotiations,

which would be called the Development Round, because it would at least deliver to the

developing countries the benefits they have so often been promised from freer trade. The

protectionism of the industrialized countries was blocked in Seattle by the peoples of the

world gathering together in the streets against "a group of faceless international

bureaucrats who wanted to force them all to eat the same generically modified food. In

other words, there was a kind of global grassroots uprising against globalization".

Rt. Hon. Mauro Fabris, Undersecretary of State of Italy for Industry, stated on the

CEI Meeting of Ministers responsible for SMEs on 24 November 2000, that

Several CEI countries, which are moving towards a free market economy, fear,

that the globalization process of the world economy and markets might affect an

economic texture that is still unprepared from a technical, financial, organizational and

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social point of view. They are worried, that there will be an effect of exclusion of SMEs,

which will be pushed to the margin of this process to the advantage of better financed and

more internationalized giant corporation. In some cases this risk may be a real one.

The GATT and later the WTO negotiations have been established a progressive

liberalization of economic exchanges at world-wide level, the European Single Market,

the signature of the Maastricht Treaty have been introduced deep changes, which are

accelerated the European integration. Social and economic operators, both public and

private, are not anymore operate only local or national, but European and global.

The conclusions of the International Ministerial Conference on Enhancing the

Competitiveness of SMEs in Global Economy organized by the OECD and the Italian

Ministry of Industry on 13-15 June 2000 in Bologna (Italy) and summarized in the

Bologna Charter, have emphasized a significant contribution of a dynamic SME sector

and entrepreneurship to restructuring of economies and alleviation of poverty. The

Ministers agreed that globalization, enhancement of technological changes and innovation

create new challenges for SMEs although they may also contribute to increased costs of

transition. Globalization should be considered as an important process impacting the

development of individual economies thus contributing to a higher standard of living for

all actors involved. To this end, globalization, opportunities and benefits should be

accessible to everyone. The Ministers have also recognized the role of international

institutions in fostering the development of SMEs and have, therefore, recommended

further multilateral exchange of experience and good practice in order to strengthen

partnerships and co-operation between countries.

Certainly these optimistic views are of ones of the most advanced market

economies. In reality the globalization of economic activity has a dual impact on SMEs.

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For some it provides new opportunities for expansion and growth by taking advantage of

international market possibilities. These are able to adapt and become internationally

competitive. For the majority, however, growing economic globalization is increasing the

competition with foreign enterprises and it is an inward process that brings competitive

challenges and threats. For those SMEs globalization brings risks that they unlikely

survive in their present form without improving quality, cost competitiveness and

management practices.

SMEs are deeply affected by the globalization of the markets, which is forcing all

firms to act and think more globally. The world economy, the liberalization, the

increasing globalization, the internal market of the EU, e-commerce, and other

institutional changes are gradually shifting the behavioral pattern of the SMEs.

As far as the SME sector is concern, there is a logo for the 3rd Millennium: Think

global - Act local. The majority of the SMEs are working within the framework of a local

environment. Their consumers are their neighbors and in the vicinity of their

village/city/county/region. This is their strength and opportunity. However, they have to

act taking into consideration the influence and external factors of the globalization, the

particular stage of internationalization including challenges of the competitive market

players, environment concerns, sustainable economic growth, international standards, and

information technology.

INTERNATIONAL REVIEW

The concept of internationalization has been changed in the last two decades. At

the beginning the internationalization processes took place mainly through expert-imports

and foreign direct investments. Today, there are more ways to interact in foreign markets.

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The different theories about internationalization analyses the choosing among the

various ways on which the firm can execute international activities, summarized in direct

investments, export activities, concession of licenses on manufacturing goods or

franchising services like fast food restaurants generally intangible. International

strategies differentiate between exportation, licensing, joint venture and the establishment

of foreign subsidiaries. Of these activities exportation is the most common.

The International Stages Theory had been developed around the works of

Johanson and Vahlne: the Uppsala Internationalization. According to this theory -

developed already in 1977 -, when faced with unknown markets, incomplete information,

and being in a state of constant uncertainty, an enterprise develops in foreign markets by

adopting a process, which evolves by increments. The enterprises pass from one stage to

another as it acquires more and more international experience. Otherwise said, on one

hand, the internationalization process evolves between the development of enterprises

foreign market knowledge and on the other, the growing commitment of its resources in

the market.

Johanson and Vahlne also mentioned the increase emphasis on R&D and its

impact on the internationalization process, but dont explain in what extent this factor

affects the international activities of the companies.

Bartlett and Ghostly put an emphasis on the management of the enterprises as an

explicative factor of internationalization.

Messrs. Zhan Su and Raymond Poisson describe the process of

internationalization based on the analyses of 39 small and medium sized high-tech

Quebec companies. The authors highlight that the majority of our sample enterprises

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have experienced an evolution in line with the Internationalization Stages Theory, they

equally use many other types of inter-enterprise accords (strategic alliances).These more

flexible methods insert themselves between the more "popular strategies" within the

Internationalization Stages theory (see figure 2). It is plausible to believe that the

utilization of accords, as well as alleviating the problem of constraints on resources,

which is a frequent problem among SMEs, opens the path towards the adoption of more

important strategies as the enterprises commits itself more and more in the foreign

market.

Archibugi, Calcagno and Palma made an empirical analysis of the relations

between technology and internationalization through a survey of almost 4,000 Italian

companies.

Molar, Bursa and Funfairwithin the framework of the TSER Programmed of the

European Commission analyzed the relations among a series of variables that can help to

explain the link between the internationalization of SMEs and their innovative activities.

The internationalization process of firms in the EU has been studied extensively.

It is remarkable that the Nordic countries, especially Denmark, Finland and Sweden are

searching internationalization of SMEs. During the last decade outward

internationalization seems to have been the focus of main research interest.

In generally we can state that there are some specific factors that affect the way in

which an enterprise decide to internationalize. We can find some black boxes in the

various theories that should be analyzed. However, an area, which has obtained fairly

limited attention, is the internationalization process of SMEs. It is especially true for the

emerging market economies and the CITs, where there is a lack of sufficient theories

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about internationalization with theoretical and empirical studies that could explain the

technological determinants of the international expansion processes of SMEs.

Mr. Erika Likened, Member of the EC responsible for Enterprise and Information

Society development, sums up the experience of the European entrepreneurs in the field

of internationalization in the following way:

Often their (that means Entrepreneurs) first attempt at moving outside their local

market is to Europeanize their activities. At a European level we are trying to make it

easier for them to make that leap forward. It began with the single market process that

generated a great deal of excitement at the beginning of the 1990s. And while it is still too

early for many single market measures to have taken full effect, there are clear signs of

significant change in the European economy.

CHARACTERISTICS OF SMEs

In spite of the fact, that Governments recognizing the importance of the

entrepreneurship and SME-sector elaborate their national SME policies and support

programmers, it is evident that SMEs still face many problems. Some of these problems

are inherent and deeply rooted into the essence of the small business, others are direct

outcome of the ever-changing business, economic and political environment.

UNECE believes that the integrated approach to SME development is appropriate

and is being employed in more and more CITs.During the last decade sufficient

experience has been gained to allow analysis and to draw lessons from both best practices

as well as failures. SME support organizations are playing today very important role and

they constantly adapt their services in accordance with the changing conditions of the

national and international economy.

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The main problems faced by SMEs, that were identified by the UNECE in 1996

are still valid. Specific potential constrains and barriers to internationalization ranked in

descending order of importance from the point of view of the author, based on

government SME reports as well as discussions with entrepreneurs is shown in Figure

below:

The main constrains faced by SMEs is lack of entrepreneurial, management and

marketing skills. While most owner-managers and start-up entrepreneurs are experts in

their product and service, but often lack of wider managerial skills hinder their long-term

success. Strategic planning, medium-term vision, marketing, finding customers, patient

not to get rich overnight, management of innovation, , commitment to quality and

knowledge of quality systems, knowledge of foreign languages, cash-flow management,

information technology jut to mention a few which are all critical elements of

management required to meet challenges of the market economy, especially in the

international market environment.

SMEs in many transition economies suffer most from bureaucracy and red tape

and need maximum freedom from unnecessary regulatory burdens if they will survive and

flourish. Special constrains are in connection with regulation on establishment of a

company, licensing, taxation, control of central and local government authorities. This

issue is of primary importance event for the countries of the European Commission. This

is the reason why the theme of the UNICE Conference for SMEs held in May 2001 in

Brussels was Make it simple!

Lack of accessibility to information and knowledge: Majority of business

information and advisory services in CITs is set up on the example of the European

Commission. These centers are based providing information to SMEs with a well-

developed market economic infrastructure. Small enterprise need a wide range of

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information from issues like how to establish own small company, laws and regulations,

taxation, custom regulations, business advisory services, training opportunities, financing

sources, local and central tenders, and many others. In many cases only part of this

information needed by entrepreneurs are available in an orderly form, and access to this

information is difficult and expensive.

Financial intermediaries still feel that SMEs represent a high credit risks and

SMEs are requested to provide collaterals which value sometimes is higher that the

requested amount of credit. As a consequence, SMEs generally pay a higher rate of

interest than larger enterprises. After ten year in the road to market economies still many

CITs in the CITs as well as in the Commonwealth of Independent States have no start-up

capital and credit guarantee institutions.

Non-conformity of standardization, underdeveloped testing facilities, poor

national certification and quality counseling infrastructure and poor quality commitment

of SMEs hinder the entrance of these companies to internationalization. Standards

lower the barrier for entering a market. In the case of SMEs could be the only way to

enter a market. Governments should pay an active role in creation of an appropriate

environment in they field and they also are encouraged to create their national quality

award scheme to raise awareness towards quality and enhance competitiveness of SMEs.

IMPACT OF INTERNET ON SMEs

The INTERNET with its different components, especially with the foremost

World Wide Web (WWW) brought entirely new set of tools and a new way of doing

business especially in the filed of commercial operations both selling and buying -,

advertisement, servicing and training. The number of enterprises using Internet to market

their products and services is rapidly changing and more and more SMEs become aware

of the potential of this new technique.

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Hamlin and Gregory describe that Internet can provide a low cost gateway to

international markets and help to overcome many of the barriers and obstacles to

internationalization.

Poona and Jevons say that INTERNET has created unpredictable and

unprecedented opportunities for SMEs and they can access to certain markets similar way

as large enterprises and are able to engage international marketing which otherwise could

have been unaffordable due to huge amount of resources required.

At time being more and more SMEs are setting up their own web-sites as a mean

for disseminating their companies to potential customers and encouraging interaction. For

SMEs, a web-site is an attractive low cost methods for sale promotion to global

customers. Internet applications for SME internationalization are summarized in the

Table below.

Because the INTERNET could revolutionize the international trade operations,

SMEs will be able to compete more easily in the global marketplace, and consumers in

emerging market economies as well as in CITs will benefit from the expanded range of

information, products and services to which the Internet give them an access. The

INTERNET removes the barriers to communications with consumers if they are prepared

in an intelligent way. However,Linda Swenson (1999) draws attention, that SMEs, which

are starting to use the INTERNET for both domestic and international marketing, they

must understand how this new media differ from traditional marketing tools. The ability

to change is even more critical when being on-line since in the marketplace things change

much faster than in traditional ones. To keep steps with this new powerful tool, major

education and training is required to improve knowledge and understanding in the area

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and to encourage more effective use of the INTERNET to support SME

internationalisation.

An other problem, which SMEs are facing, is the miss concept, that today

everything is available on the INTERNET. The ability of small businesses to survive in

the globalised market deeply depends on the existence and availability of relevant

information they require for their decision-making. Even in Singapore, which is

considered one of the most advanced societies using IT and personal computers, only 5%

of the businesses are connected to INTERNET. The bulk of the SMEs in both advanced

and emerging market economies and especially in CITs within the traditional

manufacturing and servicing branches not using web and will remain probably at that

level there for at least the next two decades. Even in the associated countries in the first

wave of enlargement many small-scale entrepreneurs, who are starting in using

computer with the help of their children, are still in the first stage of using computer in the

field of world-processing (typewriting), accounting by customized software and e-

mailing. Business calculations using Excel are seldom used and occasional surfing is

started only recently. Mastering search techniques and using them are rare birds.

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FINDINGS

SUCCESSES IN INTERNATIONALIZATION OF SMEs

About 25% of manufacturing SMEs in the OECD countries are now

internationally competitive, and SMEs contribute between 25% and 35% of world

manufactured exports, but account for a smaller share of FDI.[10]

More and more SMEs are finding that if they are to be successful, they must

compete effectively in the global market as well. An international perspective for the CEI

countries is vital since their domestic market except of Italy is too small for many

enterprises to be viable and growth. Small businesses can be competitive in acting in

foreign markets, if they have necessity skills and are committed to move outside of their

countries, first of all to start with their neighboring ones.

The Regional Adviser on Entrepreneurship and SMEs of the UNECE identifies

five factors that SMEs can use to leverage their resources and overcome barriers to

internationalization.

The first factor is to build and obtain managerial skills. Management is science

and art. The first can be acquired; the second one can be developed through commitment

and by learning by doing. For many enterprises, then, venturing into global markets

implies a change in management strategy. There is a lot of evidence that successful

internationalizing SMEs have a particular management style. Generally they have a well-

structured management, which concentrates on core activities, often buying-in not only

physical inputs, but also business services.

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The second factor is good planning. Entry into international market must be

carefully prepared for. In generally, enterprises are waiting a few years entering these

market to set concrete goal for sale revenue and profits. As earlier SMEs set goals for

volume of sale, expenses and profit, the y move higher, because they could control the

whole process of international activities.

The third factor is to find appropriate foreign strategic liaisons/partners, who

know the domestic environment, legislative and non-legislative barrier, language, and the

customer requirements. It also includes the right market orientation. this encourages a

culture of learning about the markets and activities required to enter foreign markets. In

connection with this it is extremely important that the accession countries reinstall the

confidence between them and strengthen to build strategic alliances within and linked to

the CEFTA agreement. In the course of the process of enlargement of the EU it would be

necessity to have a deeper integration among the Central-European economies.

The fourth factor is technical capability and knowledge. Many experts believe,

that the key to a successful launch onto the global market is the capability of technical

advantage, derived from advanced scientific knowledge. Yet, while it is undoubtedly

important to continue to encourage the exploitation of new scientific knowledge, this

must be understood in the right context.

The fifth factor for success is quick adoptively and respond. What really

characterizes the successful globalizing enterprise, whether large or small, is that it

correctly identifies market opportunity and is able to organize itself quickly to respond to

that opportunity. In that sense technical capabilities are secondary. They are a means to an

end.

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In addition to the key-factors of success, the author believe that national SME

authorities should initiate measures to support the development of the SME sector and

promote internationalization of SMEs. The three major tools of primary importance

should be oriented to the following issues:

1. Information centre for SMEs

In order to minimize mistakes during the decision making process in consequence

of lack of information, it is essential to have a comprehensive databank that could provide

the necessary information and provide with it to SMEs at low cost and via easy access.

Such database should include all types of relevant business information that can be

defined. Similar information centers were initiated by the Slovenia Government at the

Small Business Development Centre based on the Euro Info Center EIC SI 751

Ljubljana as well as by the Israeli SME Authority at the Small Business Information

Centre in Tel Aviv.

2. Training programmed in the field ofinternationalization

The operation of SMEs in not anymore only local/national, but European/global.

Because of the complexity of the legislation, problems for the application at the local

levels, a specific know-how is required for surviving and growth. The EU countries are

developing their national policies and strategies for enterprise internationalization. It is

advisable to create special tailor-made training programmers for SMEs, similar to many

programmers offered by many EU training institutions and consulting companies, like

e.g. the EUROSTRATEGIE (Perugia, Italy) , which purpose is to reply to those new

needs which appears in the concrete application of the European politics at local level.

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3. Promotion of Foreign Direct Investment

FDI by is a reservoir for economic development by bringing a package of capital,

technology, managerial skills and access to market, and this is why there is a need to be

tapped much more than in the past. FDI by SMEs is still relatively low. Special attention

should be devoted to cross-border cooperation, which also strengthen the good

neighborhood among the CEI CITs. In a liberalizing and globalizing world economy,

competition is everywhere and SMEs therefore increasingly need to supplement their

national sources of efficiency, management skills and competitiveness with a portfolio of

local assets. As regards outward FDI, Governments should help SMEs to invest abroad,

including providing targeted assistance to SMEs through different support programmers.

One of such kind of activities should be oriented towards creation of special supplier

programmed, in which domestic SMEs become supplier to multinationals.

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CONCLUSION

In spite of the fact, that Governments recognizing the importance of the

entrepreneurship and SME-sector elaborate their national SME policies and support

programmes, it is evident that SMEs still face many problems. Some of these problems

are inherent and deeply rooted into the essence of the small business, others are direct

outcome of the ever-changing business, economic and political environment.

1. Training and entrepreneurship development

Three institutes engaged in training of small-scale entrepreneurs are National

Institute of Small Industry Extension Training (NISIET), Hyderabad, National Institute

for Entrepreneurship and Small Business Development (NIESBUD), New Delhi and

Indian Institute of Entrepreneurship (IIE), Guwahati.

2. Modernisation and technology upgradation

A Technology Management Division was set up in SIDO in January, 1997

technology upgradation and modernization of the small scale sector under one umbrella.

The areas to be covered under this division are:

Awareness & Motivational Programme on ISO 9000

Energy Conservation

Integrated Technology Up-gradation and Management Programme (UPTECH)

Incentive Scheme for Acquiring ISO- 9000 Certification

Technology Trust Fund.

3. Training in industrial co-operatives

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The National Council for Co-operative Training (NCCT) is responsible for

organising training programmes for human resource development in the co-operative

sector.

4. Integrated Infrastructure Development (IID) Scheme

This scheme launched in 1994, to facilitate location of industries in rural and

backward areas, to promote stronger linkages between agriculture and industry and to

generate employment, to create and develop infra-structural facilities like developed sites,

power distribution network, water, telecommunication, drainage and pollution control

facilities, roads, banks, raw materials depots, storage and marketing outlets, common

facilities and technological back up services.

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SUGGESTIONS

The small-scale industrial sector has vast potential in terms of employment,

output, export promotion, expansion of base for indigenous entrepreneurship and

dispersal of industries and entrepreneurship skills in rural as well as backward areas. The

small-scale industries sector showed a remarkable progress during 1980s. This sector

accounts for nearly 35 per cent of the gross value of output in the manufacturing sector

and over 40 per cent of the total exports from the country. The level of employment in the

sector has been over 140 lakhs and increasing by 3.5 per cent per annum. With the

opening of the economy and rapid stride in liberalisation, the small-scale industries sector

is at the threshold of major challenges which needs to be addressed squarely. The

strategy, therefore, should be one of making the best of the available resources,

opportunities and entrepreneurial skills to expand the scope of its activities horizontally

and gain vertical integration.

Well-Designed Programme

Broad programmes designed to provide equal incentives and access to scarce

resources for all enterprises, irrespective of size, are likely to be more beneficial in the

long run than special programmes tailored exclusively to suit small-scale enterprises,

which, as seen, can often yield perverse results.

A well-designed programme is likely to include many of the following components:

Credit:The availability of credit to small enterprises can often be increased by removing

- or at least raising - the interest rate ceilings and permitting a "spread" that makes it

worthwhile for banks to lend to small enterprises; or by increasing the number and range

of intermediaries allocating foreign exchange for investment. Refinancing facility can be

useful, as can credit guarantee schemes (with costs passed on to borrowers) and training

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of local bank staff in simplified project appraisal and supervision methods. More

importantly, credit should be made available at the appropriate time.

Develop Capabilities

Advanced economies have grown through the centuries with the development and

diversification of the industry and the resultant commerce. Every country slowly, .and

many times unknowingly, develops a sense of economic proportion. This sense ultimately

determines, along with the economies of scale, the scale of economies. This sense of

economic proportion brings with it the consciousness of capabilities - technological,

managerial, financial and organisational. The advanced economies in the developed

countries are due to the advanced and developed capabilities. So long as such capabilities

have not been developed, large projects and larger conglomerates would prove to be

sterile, difficult to establish, and much more rigorous to manage. Any national industrial

economy must develop, as far as possible, naturally. On its birth, it must be properly

protected and nourished. Then, with the passage of time, it will grow into healthy

proportions. It will outgrow the gestation stage and eventually become self-reliant, self-

sustained and self-accelerating, with stout muscles and stronger nerves. The national

enterprise, which is equivalent to the sum total of the entrepreneurial, managerial,

financial, and technological capabilities, is the growth of time; therefore, small industries

in underdeveloped countries when they are emerging out of traditional agricultural

economy provide a cradle for modern medium and larger industries.

Industrial Integration

In the initial period, national entrepreneurship can certainly be nurtured and

nourished in the small-scale sector much more assuredly than in any other sector. Small-

scale industry assumes a special role in this context in the industrialising economies of

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Afro-Asian countries. When small businesses, enterprises, and industries first make their

appearance, they have to be properly and carefully nurtured. Like children, they have to

be protected from unequal competition and unfair practices of other sectors of the

industry. This period of teething troubles and protection will depend upon several factors,

such as the access to and availability of raw materials, credit on equitable basis, etc. There

have to be several organisation of monitoring and Supp011ing services that can rush to

the help of small industries in times of need.

Develop Appropriate Technology

The underdeveloped countries face a number of problems which are both serious

and complex. The problem of unemployment is one of them which demands early and

effective solution. Blind imitation and wholesale adoption of the established technology

from industrialized countries may aggravate the problem of unemployment in several

Afro-Asian countries. The traditional agricultural economics are capital-short and labour-

affluent, while the industrialist countries are enormously capital-affluent, and .relatively

labour short. Whether or not the technology which is being developed in the advanced

countries with the help of scientific discoveries and invention is in its original from really

going to benefit the underdeveloped countries is a fundamental issue, to which the

economic, scientific, and technological genius of Africa and Asia should address itself.

Development is a means that should lead to the efflorescence of human qualities of the

vast manpower sheltered in these two ancient continents. Small industries would offer at

least a partial remedy for the mounting problem of unemployment in these societies.

Perhaps a new type of technology would have to be developed which will take

cognizance of millions of idle hands and at the same time, will facilitate production of

goods of comparable 'quality at a reasonable cost. Such a technology should be developed

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through the small industry. However, the development of such a technology, which can

be legitimately termed as "appropriate technology", is not entirely in the hands of small

industries. It is scientific capability and innovative talent that could really provide a

solution. Necessity is the mother of invention. Perhaps the urgent necessity of developing

a new type of technology, appropriate to the economic facts and factors of Asia and

Africa, may give birth to that bonny and brainy baby - a new technology. We all have to

pray for its birth at no distant date.

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LIMITATION

1. Difficulty to find secondary data that exactly the needs of some specific research

investigation.

2. Error may be there in recording or transferring information from secondary

sources.

3. Accuracy: It is observed that it is rather difficult to measure the degree of

approximation used in the collection of information as well as the competence of

the investigator in motivating the persons to supply the desired information.

4. The facilities or capabilities of the agency that originally collected the data might

be questionable.

5. Relevance: The data may not fit into the needs of investigation. There may be

difference in the units of measurement, there may be surrogated data, discrepancy

of class & data may pertain to some other period of time.

6. Difficulties in the identification of the source.

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BIBLIOGRAPHY

REFERENCE BOOKS

1) Kotler Philip- Marketing Management, Person Education (Singapore), Second

Edition,2004,

2) Yadav,P.K., Marketing Strategies, Anamika Publishers & Distributors.

3) Research Methodology

By Kothari.C.R. New age international publishers, New Delhi, Second Edition:

2004

WEBLIOGRAPHY

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