MANAGEMENT OF SMALL SCALE INDUSTRIES IN ENUGU STATE PROBLEMS AND PROSPECTS (A CASE STUDY OF ENUGU SOUTH LOCALGOVERNMENT AREA)
ABSTRACT
Management of small-scale industries is characterized by paucity of literature, mostly when it includes having a focus on a particular establishment.
In the views of different scholars and as has been established by the researcher, management of small scale industry is very important in any nation since it’s efficient management will lead to the attainment of objectives.
In chapter one, a general background of the topic was given. Also the statement of the problems of study, objective of the study, significance of the study as well as the scope and limitations of the study were discussed.
In chapter two related text as regards small scale industries were reviewed.
Finally, the summary of the findings and conclusion were made; it also made some recommendations.
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION
CHAPTER TWO: LITERATURE REVIEW
CHAPTER THREE: CONCLUSION
CHAPTER ONE
INTRODUCTION
The Nigerian Management of small business area is characterized by high cost of financial resources. A cursory look of the markets in Enugu South Local Government reveals an upward trend in prices of goods both consumer goods and capital goods. This is associated with the high interest rate prevalent in Enugu South Local Government Area of Enugu State.
Under the above mention condition, the question becomes that of the fittest. Large established merchandizing companies tend to marginalized that of small scale industry as small scale industries find it very difficult if not absolutely impossible to qualify for granting of loans from finance houses partly because of the high interest rate associated with such grants and partly as a result of absence of sufficient collateral.
In view of the above facts, it becomes pertinent for those small scale industries to resort to other means such as inventory control and management of cash, debtors and creditors which make for higher profit so as to survive the out threat competition with the large firmly established merchandising firms and industries.
There is no generally accepted definition of small-scale business. The committee for economic development of the united state gave a valuable list of characteristic which a small business will have, and these are:
Managers are also owners, area of operations are mainly local, owner supplied capital and small in size within the industry.
It is the low productivity of those small scale industry in Enugu that necessitated this study: an urge for an efficient stock control system in order to optimise investments in stock at minimum costs and at optimum profits.
This efficiency is achieved primarily by maintaining stock level at a balance between too much stock and too little stock and at the same time maintaining a given level of consumer service.
As regard to any other investment in small business, the costs of holding stock must be related to the benefits to be gained.
To do this effectively, the costs must be identified. Basically, the cost can be categorized into three groups: -
The overall objective of inventory control in small scale industries is to maintain stock levels so that the combined cost (i.e a, b, c) above are at a minimum. This is done by establishing two factors, when to order and how many to order.
As indicated above most management of small-scale industries in Enugu South Local Government neither plan nor control their stock.
This results in either overstocking or under stocking by those with loan financial resources.
The consequences of this inefficiency is just vident, high cost of goods sold thereby reducing profit made. The situation has led the researcher to ask the following questions:
1) Do small scale industries in Enugu South Control their investment in stock?
2) If they do, what is the system of control employed?
3) Does the system employed make for optimum stock level? In other words, is the system efficient?
As stated earlier, most small-scale industries neither plan nor control their inventory. As a result, those that have substantial funds ever over stock merchandise, while others that have problems of funds under stock merchandise.
This study therefore aims at the following objectives;
1) To identify the causes of the high cost of goods sold by small-scale industry in Enugu.
2) To find out whether or not small scale merchandising businesses control their stock and the system of stock control employed.
3) Where a system of control exists to appraise the efficiency of such system and
4) From the finding, to offer some suggestions on the efficient system that should be adopted by small-scale industries in Enugu to ensure optimum profit at minimum costs.
1.4 THE IMPORTANCE OF STUDYING THE AREA
The study is important at this period of time especially in view of our present economic development in that:
1.5 DEFINITION OF IMPORTANT TERMS
The important that are rested with appropriate statistical tools are mainly derived from the research questions asked above and are:
1) Small scale industries concerns in Enugu do control their investments in sticks, hence their investment in stock are necessary large in relation to sales.
2) Small scale industries concerns in Enugu do not control their investment in stocks hence their investment in stock are unnecessarily large in relation to sales.
3) The system of stock control operatives in Enugu; small-scale industries concerns is efficient.
1.6 SCOPE AND LIMITATIONS OF THE STUDY
A study of this magnitude ordinarily needs visitation to small-scale industry in Enugu to elicit information from various concerns.
As a result of constraints of money and time this study is limited to only three small scale industries in Enugu South Local Government selected by simple random sampling and it hoped that conclusions reached in the course of this study will have a far fetching generalization as to other small scale merchandising concerns in the country.
1.7 REFERENCES
ALLI K. M. Obityo (1991) Final Small and medium
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Bush V. N.(1988) Forecasting Demand in Cost
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Ezeife (1988) Problems & Prospects of Small Scale
Industries in Nigeria: Onitcha Fourth Dimension, Publishers.
Fayol Heri, (1983) Principle of MGX. Industries To
General Administration, 2nd ed, London: Chine Brigley Publishers.
Jessop & Morrison (1986) A Storage and Control of
Stock, London: ELSB 4th ed.
John L. C. (1986) In Inventory Management;
London: D. P Publication Ltd.
Meigg W. B. & Meigg R. F (1989) Accounting Basis
for Business Decision 5th ed, London: Gee & Co. Publisher Ltd.
Nwandu Ernma (1999) Principle of Management II,
Enugu Iyke Ventures Products.
Obeleagu C. E. Nzelibe (1985) Management of Small
Scale Business in Nigeria, Owerri: Macmillan Publishers Ltd.
Pandy I. M.(1991) Financial Management Rev.
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Robert, Murry M. C. (1978) Leadership Style in
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