“Promoter” as an agency in decline of “market orientation” across small scale enterprises in Andhra Pradesh: Study on three selected districts

• Author: Siva Krishna Golla,K. Ramachandra Rao
• Date: 01 August 2020
• DOI: http://doi.org/10.1002/pa.2079
• Published date: 01 August 2020

ACADEMIC PAPER

“Promoter”as an agency in decline of “market orientation”

across small scale enterprises in Andhra Pradesh: Study on

three selected districts

Siva Krishna Golla

1

| K. Ramachandra Rao

2

1

School of Commerce and Economics,

Presidency University, Bengaluru, India

2

School of Economics, University of

Hyderabad, Telangana, India

Correspondence

Siva Krishna Golla, School of Commerce and

Economics, Presidency University, Bengaluru,

India.

Email: sivakrishna883@gmail.com

The study emphasizes the exploration of the influences that “promoter”of the small-

scale unit exerts in shaping the loss of market orientation in regional perspective. The

small-scale firm-based “inefficiencies”have been measured with aid of the factors

“promoter's entrepreneurial orientation,”“faulty resource based planning,”“ineffi-

cient managerial control,”and “improper capacity utilization.”The factors were sho-

rtlisted after extensive review of the existing literature, theoretical frameworks, and

the conceptual notes with regard to the phenomenon of the market orientation

decline or industrial sickness across the small-scale units. The study across promoters

of 300 sick industrial units observed the incidence of the sizable and quantifiable

impact of the promoter in shaping the prospects for small-scale unit-based survival.

1|BACKGROUND TO RESEARCH

The small-scale sector across develop ing economy of India has been

reportedly under stress and strain. The annual rep orts of ministries

and general economic reviews (Muthu , 2015) highlight the plight that

the sector is facing. The “small scale in dustries in India”has today

become a development engine for the financial system, contributing

significantly to increase in the gro ss domestic product, employment,

and exports. This is the second largest sector that gives most emp loy-

ment after agriculture. This sector has contin ued to boost its contri-

bution in India's economic progress, but small-scale industry (SSI)

cannot contribute perfectly in compari son with other industry

because of some complexities. There are some p roblems that are

responsible to prevent the growth of SSI in Indi a. At present, the

Government of India is attempting to expand the coun try's industrial

base and to increase the emphasis on employ ment and export indus-

tries. SSI comprises such facilities, which em ploy less capital and

more labor incentive. A review of the n ation's banking system

(Muthu, 2015) revealed the incidence of th e substantial funds that

have been locked across the nonperforming or decl ining small-scale

units who are finding it hard to thrive, sustai n operations, meet orga-

nizational requirements, as well as enou gh access to liquid assets and

resources. The industrial structure (Br own, 2012), macroeconomic

investments (Carree, n.d.), and economic st ability (De-Mello, 2007)

are all interrelated with each other. Some of the factors are visible to

the owners and the promoters, yet they are not acting in the manner

they are supposed to. The contextual deter minants of the promoter's

ability to manage the business affai rs seem to matter as the internal

and external dimensions do impact the abi lity of the promoter to per-

form consistently.

2|UNDERSTANDING “INDUSTRIAL

SICKNESS”IN TERMS OF PROMOTER'S ROLE

The foremost feature of the small-scale units (Dragnic, 2014) lies in

their abilities to focu s more on the personal- and i ndividual-driven

management attribu tes (the owner and the ma nager are one and

same person), usual r estricted access to mar ket, and economic fac-

tors of production an d to face the impact of external factor s like the

state authorities, p olicy change by banking a nd credit institutions as

well as the larger sensi tivity toward the inte rference from state an d

other contextual and s ocially determined factors. The exi sting litera-

ture (Lee, 2016) reports the small and medium enterprises (SMEs) as

risk takers, characteristically innovative, yet they are not aloof from

the challenges of the mi sfit across existing e nvironment (Autio,

2011), extensive competition from the established players, and the

managerial ineffic iency in decision-mak ing process. The exist ing

Received: 17 December 2019 Accepted: 2 January 2020

DOI: 10.1002/pa.2079

J Public Affairs. 2020;20:e2079. wileyonlinelibrary.com/journal/pa © 2020 John Wiley & Sons, Ltd 1of10

https://doi.org/10.1002/pa.2079