A

Micro Project
On

“Study of management principles applied to a Small Scale

Industry”

Submitted in partial fulfillment of the requirement for the award of

Diploma of Engineering
in
Computer Engineering
By

Sukanya Jadhav
Prachi Jadhav
Tejashree Latke
Suraj Phirke
Priti Mali

under the guidance of

Prof. Muriel Dias

Department of Computer Engineering

2023 - 2024
 CERTIFICATE

VIVA COLLEGE OF DIPLOMA ENGINEERING & TECHNOLOGY

VIRAR (W)
2023-24

This is to certify that the micro project entitled “Study of management principles
applied to a Small Scale Industry” has been submitted under the guidance of Muriel
Dias in partial fulfillment of the requirement for the award of Diploma of Engineering in
Computer Engineering from Maharashtra State Board of Technical Education.

“Study of management principles applied to a Small Scale

Industry ”
GROUP MEMBERS

31.Sukanya Jadhav
32.Prachi Jadhav
34. Tejashree latke
36. Suraj Phirke
85.Priti Mali

Project Guide H.O. D

Prof. Muriel Dias Prof. Poonam Jadhav
 INDEX

Sr. Name of the Page

No. topic no.
PART –A PLAN
1 Brief Introduction 1
2 Aim of the Micro-Project 2
3 Action Plan 3
4 Resources Required 4

PART –B OUTCOMES
1 Brief Description 5-10
2 Course Outcomes Integrated 11
3 Skill Developed 12
Study of management principles applied to a Small Scale Industry MGT 22509 , Sem VI
Pratik Gurav
PART-A PLAN
1.0 Brief Introduction

The study of management principles in the realm of Small Scale Industries (SSIs) delves into the
nuanced application of fundamental managerial concepts to businesses of smaller scale and scope.
Despite their modest size, SSIs contribute significantly to economic development, employment
generation, and entrepreneurial endeavors. Management principles, encompassing planning, organizing,
leading, and controlling, are pivotal for steering the operations of SSIs effectively.p

Within the domain of planning, SSIs must navigate the intricacies of setting clear objectives and devising
strategies that align with their resource limitations. Organizing becomes a critical aspect, with the
challenge of creating efficient structures in lean organizational setups where adaptability is key.
Leadership in SSIs takes on a multifaceted role, involving the motivation of a smaller workforce and
fostering a culture of innovation. This adaptability is crucial as leaders often find themselves wearing
various hats to meet the diverse demands of a smaller enterprise.

Controlling processes is paramount for SSIs, necessitating a vigilant eye on financial performance, human
resource management, and quality control. Financial management assumes heightened importance,
requiring prudent budgeting, cost control measures, and strategic resource allocation to ensure both
sustainability and growth. The dynamic nature of small businesses calls for a proactive stance in
innovation and adaptability, encouraging novel approaches to products and processes to stay competitive
in the market.

Market orientation emerges as a key principle, demanding acute awareness of market trends and a keen
understanding of customer needs. Building and maintaining robust customer relationships become
indispensable for the success of SSIs. Furthermore, risk management takes on a critical role in the
uncertain environments within which SSIs operate. Identifying potential risks, developing mitigation
strategies, and being prepared for unexpected challenges are essential components of effective risk
management in this context.

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2.0 AIM of Micro-Project

 Explore the adaptation of management principles in Small Scale Industries (SSIs).

 Assess the effectiveness of adapted management practices in SSIs, focusing on organizational
structure and decision-making.
 Examine human resource management dynamics in SSIs, including recruitment, training,
motivation, and retention within smaller organizational structures.
 Analyze financial management strategies in SSIs, encompassing budgeting, cost control, and
optimal resource allocation.
 Investigate how SSIs foster innovation, maintain market orientation, and manage risks for
sustained growth.

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3.0 Action Plan

Sr. Details of Activity Planned Planned Name of Responsible Team

No Start Finish Members
Date Date

1 Project selection 10/1/24 17/1/24 Sukanya Jadhav , Prachi Jadhav,

Tejashree Latke, Suraj Phirke,
Priti Mali
2 Identifying 17/1/24 31/1/24 Sukanya Jadhav , Prachi
project Jadhav, Tejashree Latke,
outcomes Suraj Phirke, Priti Mali
3 Identifying 31/1/24 7/2/24 Sukanya Jadhav , Prachi
resources Jadhav, Tejashree Latke,
required Suraj Phirke, Priti Mali
4 Implementation of___ 7/2/24 21/2/24 Sukanya Jadhav,Prachi
project Jadhav, Tejashree latke,
Suraj Phirke ,priti mali
5 Final outcome 21/2/24 13/3/24 Sukanya Jadhav , Prachi
Jadhav, Tejashree Latke,
Suraj Phirke, Priti Mali
6 Documentation 13/3/24 20/3/24 Sukanya Jadhav , Prachi
Jadhav, Tejashree Latke,
Suraj Phirke, Priti Mali

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4.0 Resources Required

Sr. Name of Specification Remarks

No Resource
1 Computer HP processor-Intel
System (R)Core (TM) is
9400T
CPU@1.80GHZ
Ram 8 GB
2 Software Microsoft word 2021
Package

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PART-B OUTCOME

1.0 Brief Description

This comprehensive study on the application of management principles to Small Scale

Industries (SSIs) delves into the intricacies of adapting fundamental managerial concepts to the
specific dynamics of smaller businesses. The examination spans various facets, beginning with the
strategic planning processes employed by SSIs to set objectives within the constraints of limited
resources. The study scrutinizes organizational structures, evaluating their effectiveness in fostering
adaptability and innovation, crucial elements for success in smaller work environments.

Additionally, the study explores the leadership landscape within SSIs, where individuals often play
multifaceted roles in motivating smaller workforces and cultivating a culture of resilience and
creativity. It further investigates decision-making processes tailored to the unique challenges faced
by SSIs, aiming to understand how these businesses navigate uncertainties and capitalize on
opportunities within their operational spheres.

The second dimension of the study shifts focus to specific functional areas. Human resource
management practices within SSIs are analyzed, considering the challenges associated with
recruitment, training, and retention within smaller organizational structures. Financial strategies take
center stage, examining how SSIs budget effectively, control costs, and allocate resources optimally
to ensure both sustainability and growth.

Moreover, the study explores how SSIs foster innovation in products, services, and processes,
maintain market orientation to stay attuned to consumer needs, and manage risks effectively in their
operational environments. This multifaceted examination seeks to provide a comprehensive
understanding of how the application of management principles contributes to the resilience,
efficiency, and sustained success of Small Scale Industries in dynamic and competitive business
landscapes.

Examples and Ideas of Small Scale Industries:

1. Artisanal Food Production
2. Handicrafts and Cottage Industries
3. Microbreweries and Distilleries
4. Local Clothing Boutique
5. Custom Furniture Workshop
6. Health and Wellness Services
7. Specialized Farming
8. Eco-friendly Products Manufacturing
9. Local Art Studios
10. Technology Repair Services
11. Tourism Services

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12. Personal Care Products Manufacturing
 Characteristics of Small Scale Business:

1. Ownership:
Small Scale Industries (SSIs) are characterized by a single ownership structure,
predominantly as sole proprietorships or partnerships. This model fosters a direct and
personal connection between the owner and the business. With streamlined decision-making
processes, this ownership configuration enhances agility and responsiveness. The owner's
direct involvement often extends beyond financial concerns, leading to a more holistic
understanding of the business's intricacies.

2. Management:
In SSIs, management and control are concentrated in the hands of the owner or a small
group of owners. This hands-on management approach enables swift decision-making and
efficient handling of day-to-day activities. The direct connection between management and
ownership cultivates a cohesive operational environment, where strategic decisions align
closely with the owner's vision for the business. This close-knit management structure
contributes to a responsive and adaptable business model.

3. Labor Intensive:
SSIs are often characterized by limited reliance on technology, resulting in a greater
dependence on labor and manpower for production activities. This labor-intensive nature
fosters a more personalized and community-oriented work environment. While technology
may play a role, the emphasis on human resources creates a unique dynamic, enhancing the
sense of community within the workforce and reinforcing a hands-on approach to production.

4. Flexibility:
An inherent characteristic of SSIs is their high adaptability to changing business
environments. Owners can readily adjust to amendments or unexpected developments,
ensuring the business remains resilient. This flexibility allows for swift responses to market
fluctuations and evolving consumer preferences. Unlike larger industries with more complex
structures, SSIs can implement changes efficiently, contributing to their overall sustainability
and success.

5. Limited Reach:
SSIs typically operate within confined geographic zones, catering to local and regional
demand. This limited reach allows for a more localized and community-centric approach to
business operations. While it may pose challenges for market expansion, it enables SSIs to
establish strong connections within their immediate communities. This localized focus
enhances customer relationships, facilitates better understanding of local needs, and fosters a
sense of community engagement.

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6. Resource Utilization:
Small Scale Industries prioritize the utilization of local and readily available resources.
This deliberate focus on local resources contributes to economic efficiency and minimizes
wastage. By sourcing materials locally, SSIs support the regional economy and reduce their
ecological footprint. This localized approach ensures that natural resources are fully utilized
within a specific region, promoting sustainability and responsible resource management. In
essence, SSIs play a crucial role in fostering economic development at the local level while
maintaining an environmentally conscious operational philosophy.

 Role in the Indian Economy:

Small Scale Industries (SSIs) play a crucial role in shaping the Indian economy, especially in the
context of employment generation, production, and contributing to the nation's export industry.

1. AQGTV1. Employment:
Small Scale Industries (SSIs) stand as pillars of employment generation in countries like
India. With constraints in technology and resource availability, these industries rely heavily
on labor and manpower for their production activities. In a nation marked by a diverse
demographic and varying skill levels, the labor-intensive nature of SSIs becomes instrumental
in providing job opportunities. This not only addresses unemployment challenges but also
contributes to poverty alleviation, supporting socio-economic development. By fostering a
work environment that depends on human capital, SSIs play a crucial role in harnessing the
potential of the workforce, particularly in semi-urban and rural areas.

2. Total Production:
SSIs play a substantial role in the overall production landscape of India, contributing
to approximately 40% of the total production of goods and services. This statistic
underscores their significance in the economic growth and consolidation of the nation.
Despite their relatively smaller scale, the cumulative impact of SSIs on the production
sector is profound. These enterprises operate in diverse sectors, ranging from
manufacturing to services, collectively shaping the nation's economic trajectory. By
being major contributors to the production landscape, SSIs demonstrate their
resilience and adaptability in driving economic development.

3. Make in India:
Small Scale Industries epitomize the essence of the Make in India initiative. By
focusing on local production and subsequently selling products globally, SSIs align
with the mission to promote indigenous manufacturing. This initiative, launched to
boost domestic manufacturing and position India as a global manufacturing hub, finds
resonance in the operations of SSIs. Through their commitment to producing goods
within the country's borders, SSIs contribute to the expansion of the manufacturing
sector, creating a positive ripple effect on the economy. This not only fosters self-
sufficiency but also positions India as a competitive player in the global market.

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4. Export Contribution:
The export industry in India relies significantly on the contribution of Small Scale
Industries. Nearly half of the goods exported from India are manufactured or
produced by these industries. This export contribution highlights the pivotal role that
SSIs play in enhancing India's global trade competitiveness. By engaging in
international trade, these enterprises not only contribute to the country's foreign
exchange reserves but also broaden the reach of Indian products in the global market.
The export-oriented focus of SSIs enhances the visibility and market presence of
Indian goods, further stimulating economic growth.

5. Public Welfare:
Beyond their economic contributions, Small Scale Industries play a vital role in
promoting public welfare. By providing avenues for wealth creation and employment,
SSIs contribute not only to individual prosperity but also to the overall development
of the community. The impact of these industries extends beyond economic
indicators, influencing social growth and development. Through job creation and
localized economic activities, SSIs foster inclusive growth, reducing socio-economic
disparities. This engagement with local communities aligns with broader goals of
sustainable development, creating a harmonious relationship between economic
progress and social well-being.

In essence, the multifaceted contributions of Small Scale Industries in India extend far beyond the realms
of employment, production, and export. These enterprises become integral components of the socio-
economic fabric, contributing to the holistic development of the nation. The significance of SSIs lies not
only in their economic impact but also in their ability to act as agents of positive change, fostering a
balanced and inclusive growth trajectory for the country.

 Objectives Of Small Scale Industry.

●To create more employment opportunities.

●To help develop the rural and less developed regions of the economy.
●To reduce regional imbalances.
●To ensure optimum utilization of unexploited resources of the country.
●To improve the standard of living of people.
●To ensure equal distribution of income and wealth.
●To solve the unemployment problem.
●To attain self-reliance.
●To adopt the latest technology aimed at producing better quality products at lower costs

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 Registration of Small scale Industry .
SI registration is a registration provided by the Ministry of MSME. A business should obtain SSI
registration in order to be eligible for a number of schemes, subsidies and other incentives provided
by the Government to such SSI’s. SSI registration can be obtained online tooSmall Scale Industry
(SSI) Registration in India:

1. Eligibility Criteria:
 The enterprise should fall under the definition of a Small Scale Industry.
 The enterprise may be a sole proprietorship, partnership, or a private limited company.
2. Documentation:
 Identify the type of business entity and gather necessary documents such as address proof,
identity proof, and proof of business ownership.
3. Visit the District Industries Center (DIC):
 The registration process is usually carried out at the District Industries Center (DIC) or the
Small Industries Service Institute (SISI).
 Obtain the SSI registration form from the DIC.
4. Completion of the Form:
 Fill out the SSI registration form with accurate details regarding the business.
5. Submission of Documents:
 Submit the completed form along with the necessary documents to the DIC.
6. Inspection:
 The concerned authorities may conduct an inspection of the business premises.
7. Registration Certificate:
 Upon successful verification, a registration certificate is issued.

Important Points to Note:

 SSI registration is not mandatory, but it offers several benefits, including eligibility for
government schemes, subsidies, and priority in government procurement.
 The Micro, Small, and Medium Enterprises (MSME) sector has replaced the term SSI in recent
years.
 Online registration processes may be available, depending on the region.
Changes and Updates:
Since regulations can change, it's crucial to verify the current registration process with the relevant
local authorities or consult with a professional who can provide up-to-date information on SSI or
MSME registration in your specific location.

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 Sickness in SSIs:
.
The Sick Industrial Companies (special Provisions) Act 1985 defines sick industrial company to
mean an industrial company which has at the end of any financial year accumulated losses equal to
or exceeding its entire net worth and has also suffered cash losses. According to Development
Commissioner (SSI), a unit is sick, if:
a) Capacity utilization is below 50% in comparison to highest capacity utilized during preceding
five years.
b) Erosion of net worth by more than 50%.
c) Closure of the unit for a period of more than six months.

Thus, the sickness is failure to generate internal surplus on a continuous basis.

 Causes of Sickness:

1. Marketing problems.
2. Raw material shortage.
3. Inventory control problems.
4. Inadequate working capital.
5. Power shortage.
6. Poor management.
7. Diversion of funds.
8. Disputes among partners.
9. Delay in Govt. approval/sanctions.
10. Lack of infrastructural facilities.
11. Changes in market conditions.
12. Miscalculation of project cost.
13. Defective plant and machinery.
14. Defective layout.
15. Poor manufacturing methods.
16. Untrained and unskilled Workers.
17. Higher rates of interest on borrowed funds.
18. Loans not sanctioned at needed time.

 Measures for Avoiding Sickness:

1. Estimation of realistic project cost taking into account possible price escalation.
2. Completion of project on scheduled time.
3. Commercial production to start at the earliest possible.
4. Market should be as wide as possible.
5. Judicious mix of cash and credit sale should be worked out.
6. Adequate limits for working capital requirements should be got sanctioned.
7. Right type of manpower in right quantity is employed.
8. Quality concept at all levels should be implemented

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2.0 Course Outcomes (CO)

a) Use basic management principles to execute daily activities.

b) Use principles of Planning and Organizing for accomplishment of task.
e) Understand various provision of industry act.

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3.0 Skill Developed

Therefore we studied how Small-Scale Industries has acquired an important place in the socio-
economic development of the country. The number of Small-Scale Industries stood at 28.03 lakhs in
1996-97 and increased to 34.64 lakhs in 2001-02. After the policy of liberalization and establishment of
the WTO several challenges and new opportunities have grown for the Small-Scale Industries

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