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MGT601 - SME Management - Lecture Handout 19

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POST AND FIELD PROBLEMS FACED BY A NEW ENTERPRISE

Chapter deals with post and field this problems faced by a new concern.

  1. Acquisition of land;
  2. Construction of building and other aspect of civil works;
  3. Acquisition of machinery and its installation;
  4. Preliminary work about the sources of supply of raw materials , labor and managerial inputs;
  5. Prospecting about marketing;
  6. Preliminary work regarding sources of working capital;
  7. Coordination problem connected with the acquisition of different kinds of assets or completion of jobs;

Unless care is taken to ensure proper sequencing of different activities, the project would have cost over-run and/or time over run. Here in some kind of PERT analysis could be quite helpful.

Post Operative Problems of a New Enterprise

Several problems can create hurdle to start any enterprise-whether small or large. They need not always arise but an awareness regarding them could enable their timely avoidance or prevention. Below are given some of the post-operative problems.

  • Lack or absence of profits.
  • Experience factor:
    • Unfamiliarity or lack of experience in product or services line.
    • Lack of experience in management. There is a vast difference between being a machinist and being able to manage a machine shop.
    • Over-concentration of experience e.g. focusing only on the area of interest say, sales, finance, production etc and neglecting others.
    • Incompetence of management.

    Read more: MGT601 - SME Management - Lecture Handout 19

MGT601 - SME Management - Lecture Handout 09

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ISSUES AND POLICY DEVELOPMENT FOR SME – I

This lecture is concerned with the different issue and other obstacles faced by the policy makers while forming an SME policy for Pakistan. This includes both long term and short term issues.

Issues and Policy Development

Pakistan’s economy is an economy of SME. Policies in the past have given a general perspective, direction and defining broad parameters of activity within the macro environment framework, but efforts have focused on large enterprises, neglecting SME, which are at the heart of our economy. Our SME suffers from variety of weaknesses, which have constrained their ability to adjust to the economic liberalization measures introduced and to take full advantage of the rapidly expanding markets of the world. But SME importance and contribution in the economic activity suggests that there is a significant potential to enhance their growth through appropriate regulations and promotion.

While SME are mentioned in some of our socio-economic strategies and policy documents, measures are not specified and prioritized for us to be able to speak of any coherent SME policy or approach. The SME Sector Development Program seeks to improve the situation by inviting all concerned stakeholders to draft Pakistan’s future SME policy.

SME promotion is an important issue for many government departments and central offices. However, there is an existing lack of coordination and regular information exchange mechanism among institutions which constraints their ability to deliver in the SME development process. The responsibility for facilitating the SME policy development lies with SMEDA, attached to the Ministry of Industry and Production. One of the major reasons for the lack of coordination is that SMEDA has not been provided with a mechanism to initiate, coordinate, monitor and evaluate initiatives of SME development outside of its own scope of activities. Therefore, cross departmental and stakeholder consultations, resulting in the preparation of our national SME policy are our key to success. A network of institutions stimulating the growth of SME is also being proposed. The issues highlighted in this lecture give a retrospective view of things while giving a current picture of the SME business environment in Pakistan. There are issues we may only solve in the long term and which therefore are beyond our current scope. And there are issues we may solve in the short to medium term. These issues should become the focus of our SME policy. Short to medium term issues revolve around three major topics:

Read more: MGT601 - SME Management - Lecture Handout 09