04 – ALANA SHAH 05 – SHARATH BANGERA 32 – ANUPAMA JHA 35 – SIDDHARTH JOSHI FOUR PILLARS OF INDIA INC.
CONTENTS SMALL AND MEDIUM ENTERPRISES (SMEs) FAMILY MANAGED BUSINESS SMALL SCALE INDUSTRIES (SSIs) PUBLIC SECTOR UNITS (PSUs)
Small And Medium Scale Industries(SME)
SME’s In developing countries SME’s are the backbone of nations Economy Significant contribution to GDP (7%) India has 3Million SME’s 50% Industrial output 42% of India’s Exports
SME Definition Various countries follow different definitions for the SME sector. The Indian definition based: Any Business Enterprise that involves manufacturing,processing and servicing operations or only trading activities with an annual turnover (sales/gross income) up to Rs 50crores
SME contd….. The Micro, Small and Medium Enterprises Development Act 2006 facilitates by providing: Promotion and development Enhancing competitiveness Act Categorizes SME’s as: Micro Enterprises Small Enterprises Medium Enterprises
Type of SME’s Ganguly Committee recommended three types of SME for India: TINY Type : Turnover Rs 2 crores Small Type : Turnover Rs 2 crores to 10 crores Medium Type : Turnover Rs 10 crores to 50 crores
Importance of SME’s in India Large scale generation of Wage Employment Dominant contributor to well being of India Low financial resources but still a growth driver Rapid progress and prosperity due to less time for business setup Based on 4 C’s Customer Focus Cost Control Cross Sale Containing Risk
SME’s in all Sectors Food Processing Agricultural Inputs Chemicals & Pharmaceuticals Engineering; Electricals; Electronics Electro-medical equipment Textiles and Garments Leather and leather goods Meat products Bio-engineering Sports goods Plastics products Computer Software, etc.
SME’s in Maharashtra ELECTRICAL Filter-On Pvt. Ltd., Pune Seva Engineering Pvt. Ltd., Pune ENGINEERING Atul Electro Formers Pvt. Ltd., Pune Mahavir Group of Industries, Pune FOOD PROCESSING Sairaja Fruit & Food Processing Pvt. Ltd, Phaltan Gadre Marine Products, Ratnagiri AditiPectins Private Limited, Islampur, Dist. Sangli Sushant Bio-Pharmaceuticals Pvt. Ltd., Kolhapur
Limitations of SME’s Low Capital base Low Technology base Comparatively lesser quality products Economic Efficiency limited Inadequate contribution towards R & D For India in specific threats from China Risk aversion in Lending due to high NPA
Solutions and Future Setting up of network of District Industries Centre (DICs) National Banking and Finance Corporations To Activate Small Industries Development Bank of India’s (SIDBI’s) Credit Delivery for SME to be speeded up
FAMILY MANAGED BUSINESS
INTRODUCTION A Family-owned business is one that is owned and managed (that is controlled) by one or more family members. Family-owned firms are – “Organizations where two or more extended family members influence the directions of the business through the exercise of management roles or ownership rights.” Over 80% of world business is controlled by families. Some of the world's largest corporations, from Wal-Mart to News Corp. to Ford Motor are family businesses.
Family-owned businesses continue to form the backbone of the American economy. In India too, the highest generator and creator of wealth are family – owned businesses. Some 35% of Fortune 500 companies are family-controlled. Family businesses account for 50% of U.S. gross domestic product. They generate 60% of the country's employment and 78% of all new job creation.
33% survive to the second generation
15% survive to the third generation
CHARACTERISTICS Loyalty Family Relationship Male dominated Active and non-active members
Tata Sons, the premier promoter company of the Tatas was established by JamsedhjiTata in 1868 and is India's largest and most respected business conglomerates, comprising 98 operating companies in seven industrial sectors Ratan Tata shook up the group, focusing on the development of high-tech companies and putting the Tatas at the forefront of the Indian economic miracle. Family values nurtured and unity shown by Tatas have made them successful. Tatas trust and respect enjoyed by them is unmatched in the history. They have managed their business without spilling the family beans Nurtured highly principled value system
Family values nurtured and unity shown by Tatas have made them successful. Tata s trust and respect enjoyed by them is unmatched in the history. They have managed their business without spilling the family beans Nurtured highly principled value system
ADVANTAGES OF FAMILY BUSINESSS Common Values Strong Commitment Stability Loyalty
CHALLENGES IN FAMILY BUSINESS Family Emotions Family or Business: What comes first? Succession Planning Retaining non-family proposals
Kongo Gumi-End of a 1400 yr old company KongoGumi,a Japanese construction company and was the world's oldest continuously ongoing independent family managed business, operating for over 1,400 years until it was absorbed as a subsidiary of another larger construction company. The world's oldest continuously operating family business -Japanese temple builder Kongo Gumi succumbed to excess debt and an unfavorable business climate in 2006.
KEYS TO SUCCESS OF KONGO GUMI The factors that were responsible for the success of the 1400 years old business was: The belief system of the business survived for thousands of years and had many millions of adherents. He has cited the company's flexibility in selecting leaders as a key factor in its longevity. The factors of Kongo Gumi’s success is a mixture of conservatism and flexibility.
END OF THE BUSINESS Two factors were primarily responsible: First, during the 1980s bubble economy in Japan, the company borrowed heavily to invest in real estate. After the bubble burst in the 1992-93 recession, the assets secured by debt shrank in value. Second, social changes in Japan brought about declining contributions to temples and the demand for Kongo Gumi's temple-building services dropped sharply beginning in 1998.
SMALL SCALE INDUSTRIES
WHAT IS SSI? Initially SSI were classified into two categories- those using power with less than 50 employees and those not using power with the employee strength being more than 50 but less than 100. An industrial unit can be categorized as a small- scale unit if it fulfils the capital investment limit fixed by the Government of India for the small-scale sector. Key parameters Investment – Upto 5 crores Employment – Less than 200 Products – Mostly unbranded
SSI in INDIA Contributes almost 40% of the gross industrial value added in the Indian economy. Employment generation next only to agriculture. Contribution to exports
Percentage of SSI in total exports
Importance of SSI Employment Rural development Reduces inequality of income Operational flexibility Assists large scale industries Foreign exchange
Types of SSI SSI Traditional Modern Khadi Ancillaries Handlooms Tiny/Small /Medium Enterprises Cottage Small-Scale Service and Business Enterprises Sericulture
SuccessStories Bombay Dyeing
Founded in 1879 by Sir NowrosjeeWadia
Floated on a capital of Rs 1 lakh
Engaged in manufacture of yarn and textile fabrics
Started in 1931 by D. P. Dandekar
Initially called Camel
Today has a wide range of stationery products
Problems faced by SSI Internal
Lack of professional expertise
Lack of training
External Financial and credit support Technology Marketing Competition
Finance and Specialised support service providers FINANCE SIDBI Co-op banks NABARD MARKETING NSIC SIDO EPC S S I ENTREPRENEURSHIP DEVELOPMENT SIDO EDI Special Institutes TECHNOLOGY UPGRADATION SIDO SISI
Government initiatives Exemption for excise duty limit raised from Rs. 50 lakhs to Rs. 1 crore The composite loans limit raised from Rs. 10 lakhs to Rs.25 lakhs The Nayak Committee's recommendations regarding working capital
PUBLIC SECTOR UNIT
Public Sector Enterprises are those enterprises which are directly or indirectly managed by the government, local public bodies and other public agencies or companies in which the government owned a majority of the company equity.
Public Sector occupies a significant place to achieve systematic and planned growth especially in developing countries like India.
An effective instrument to regulate the pace and composition of private economic activity in a mixed economy.
Classification of Public Sector Commercial Public Enterprises: Eg: State Trading Corporation of India Ltd., Minerals and Metals Trading Corporation Ltd., Food Corporation of India, Indian Oil Corporation and Cotton Corporation of India. Manufacturing Public Enterprises: Eg: Enterprises engaged in the manufacture of steel, oil, machinery, chemicals, fertilizers, engg equipments, minerals etc.
Financial Public Enterprises : Eg: IDBI, SBI, State Finance Corporations, Nationalized Commercial Banks etc. Promotional Public Enterprises : Eg: National Industrial Development Corporation Ltd, Indian Mines Bureau are promotional by nature. Public Utilities : Eg: Doordarshan, Akashavani, Road Transport Corporations, Railways, Post and Telegraphs etc.
Objective To promote export to reduce imports To eliminate dependence on foreign aid and foreign technology To attain Self-reliance in different technologies To control the sensitive sectors such as distribution system, allocation of scarce imported commodities etc To bridge the gap between rich and poor
To create and enhance employment opportunities
To exercise social control and regulation through public finance institutions
To check monopolies and concentration of power in few hands
To promote infrastructural facilities for the growth of the economy
Performance of PSU Public enterprises do not run on considerations of profitability like Private enterprises. They have wider social responsibilities to discharge such as: Securing a balanced regional growth. Redistribution of income and wealth. Providing infrastructure for development. Employment generation. Generating resources of development.
The record of public enterprises, on this count has been discouraging Year GP 1980-1981 : 8% 1990-1991 : 11% 1995-1996 : 16% 2005-2006 : 13-15%
Steel Authority Of India LIMITED
Largest steel maker in India
Owned and operated by Government of India.
The Government of India owns about 86% of SAIL's equity.
The company is among the top five highest profit earning corporate of the country.
Incorporated on January 24, 1973
Turnover of Rs. 48,681 crore
Annual production of 13.5 million metric tons
CLASSIFY THEM SAIL Indian Railways ONGC State Trading Corporation of India Ltd Unit Trust of India State Electricity Boards
ANSWERS SAIL : Manufacturing Public Enterprise Indian Railways : Public Utilities ONGC : Manufacturing Public Enterprise State Trading Corporation of India Ltd : Commercial Public Enterprise Unit Trust of India : Financial Public Enterprises State Electricity Boards : Public Utilities
Role of PSU Development Orientation Share in net domestic product Development of Natural Resources Generation of Employment Infrastructure Control over Economy Social Welfare Balanced Regional Development
Problems of Public Sector Lack of Clear Cut Objective Inefficient Management Increase in Cost of Construction due to Delay in Completion. Defective Location due to Political Interference . Price Policy Labor Problem Faulty Planning