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Managerial and Organisational Problems

Small scale firms are generally managed by the owners who very often does not possess

the skills required for the efficient management of the enterprise. There is lack of proper

division of work and benefits of specialization are not available. some owner-managers

are reluctant to adopt modern methods of organisation and management. There is

instability in business because the sickness and dearth of the owner manager directly

affects the survival and growth of the small firm.

Initiatives undertaken by the government include:

Management Training Programmes with the basic objective of improving the

productivity/profitability of existing entrepreneurs by upgrading their managerial

decision making capabilities and providing them an insight in the latest developments in

the area of industrial management, marketing management, financial management,

inventory control, human resource development, information technology, and e-

commerce, etc. Also, it aims to make them aware about emerging practices in the field of

industrial management.

National Institute for Micro, small and Medium Enterprises (ni-msme) has taken

gigantic strides to become the premier institution for the promotion, development and

modernization of the Small and Medium Enterprise sector. An autonomous arm of the

Ministry of Micro, Small and Medium Enterprises (MSMEs), the institute strives to

achieve its avowed objectives through a gamut of operations ranging from training,

consultancy, research and education, to extension and information services.

Human Resources(labor related issues)

The managerial skills required for the management of small/ medium firms are not very

much different from those necessary in large scale business. The managerial functions of

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planning, organising, staffing, directing and controlling are common to both. But, the

scale on which various functions are performed by owner and manager are different and

in small scale, the degree of complexity is lower. The organization structure of latter

firms is simple due to presence of few employees. The owner himself acts as the manager

and can exercise personal control. However as the business grows, owner/ manager finds

it difficult to manage even small business effectively. For this, it becomes necessary toincrease the amount of manpower in the enterprise.

Hence, several initiatives and steps are required to be undertaken to recognise the

weaknesses in management of small business enterprises, which are largely plagued with

difficulties and problems in relation to human resource management. There is lack of

trained and experienced employees because small/ medium enterprises find it difficult to

afford remunerative salaries as well as to provide adequate training facilities to their

employees. Further, they find it difficult to recruit and motivate skilled managerial and

technical personnel who tend to look for better opportunities in the large scale industries.

Hence, they are not able to get/hold best talent in the industry and/ or have to depend on

family members who do not have diversified and technical skills.

Although, small and medium sector is the second largest employer of human resources

after agriculture, providing employment to large number of people in the rural and urban

areas of the country. But, it is right to say that small and medium scale enterprises faces

huge problem of recruiting required number of manpower and managing effectively the

recruited employees. Thus, more initiatives need to be taken at the Centre and the State

level to ensure proper management of human resources in the small and medium scale

enterprises sector. This would raise their production capacity, improve their marketing

and distribution network, set links with people/ industries within different parts of India

and/ or abroad, as well as motivate new and talented manpower to join the sector.

HR in MSME

Outsourcing Human Resources functions like recruitment,training,payroll managementhave become trend in the indian market for the small and medium sized industries asthey have been realized the significance of human resource managemet and retention ofright talent for the growyh