Growth pattern of Small Scale Units of Women Entrepreneurs:
||Growth pattern of Small Scale Units
of Women Entrepreneurs:
A Study of Ernakulam District - Kerala
MolÃƒÂ P. Koshy*
Mary Joseph T.
Women entrepreneurship in Kerala, though lagging behind
many other states in India, has taken an upward swing lately.
Growth of small scale industrial units by women entrepreneurs
reflects their grit and tenacity in staying in the market. This
paper analyses the growth patterns of the SSI units of women
entrepreneurs in Kerala, Ernakulam district, which is the most
industrialized district in the State, was chosen as place of
reference for the study.
The growth of small scale industries is an important factor
contributing to economic development and the generation of
employment especially in developing countries like India which
are rich in human resource. Entrepreneurship has been
recognised worldwide as an essential tool for the development
and growth of economics. Women entrepreneurship in particular
acts as a catalyst for social change and development. The entry
of women into organized business is fairly recent. Most of the
women entrepreneurs start with micro-enterprises because of the
flexible nature of work and low barriers to entry. Sometimes
these enterprises will grow and become larger established
*Moli P. Koshy is lecturer and Mary Joseph, T. is Professor, School of
Management Studies, Cochin University of Science and Technology,
Cochin-682 022.Page 2
Growth is a relative term and cannot be measured in
isolation or absolute figures. Growth is usually assessed in terms
of sales turnover, profit, market share and such other indicators.
Downing1 studied the growth strategies used by male and female
entrepreneurs in many developing economies and asserted that
men and women employ different strategies due to their different
circumstances. For example, while male-owned enterprises
usually growth vertically, women's enterprises tend to grow by
diversifying into other activities. A female entrepreneur tends to
involve her family in her business, with very few exceptions.
Women involved in micro enterprise are largely concerned with
survival of their family rather than running successful business.
According to Cromie1. Women see entrepreneurship as a means
of simultaneously meeting their career needs and childcare role.
In general, an entrepreneur is always interested in business
expansion or growth.
Looking at the indicators of social development, Kerala is
at par with many developed countries. The economic indicators,
however, are not that laudable. The female work participation
rate in Kerala is only 15.85 per cent while it is 22.26 for India as
a whole. During the; Second All India Census of Small Scale
Industrial units in 1988, only 5.95 per cent of units in Kerala
Were owned by women against the All India average of 7.69
percent3. In the 1990s women entrepreneurship in Kerala
Registered an upward trend much to the delight of policy
formulators and decision makers. In 1997, the percent of units
owned by women in Kerala rose to 15.77.
The universe of the study was restricted to the modern
small scale manufacturing units of Ernakulam district.
Ernakulam was selected because it is the most industrialised
district in the state and has the maximum number of SSI units.
Non-manufacturing units were excluded, because Â¢ the
heterogeneity of their problems would make the scope of the
study too wide to be effective.
SEDME 27.2Page 3
Growth Pattern of Small Scale Units/ 59
Intensive case study of 65 (10% of the population) small
scale industrial units of women entrepreneurs was undertaken.
The SSI units which satisfied conditions such as registering with
the Department of Industries in the name of a woman or women
sponsored manufacturing organisations, investment in machinery
and equipment, not exceeding Rs.60 lakh and completing at least
five years of operations as on 31 March 1997 formed the
sampling frame of the study. Simple random sampling method
was adopted to choose the units.
Product group-wise classification of units was done to
analyse the date relating to business condition, expansion,
entrepreneurs' involvement in other business, and sales growth
rate of the sample units. The growth trend of sales has been
calculated using time series analysis to analysed the average
annual growth rate in sales by the sample SSI units.
Business condition of the units reflects the growth and
survival of their business in the market place. Table 1 gives the
business condition of the sample units. About 88 percent of the
units were running on profit. Only 3 percent of them were
making loss. One of the units manufacturing" rubber bands and
gloves was making profit until the last year. A high level ofÃ‚Â»
stock of raw materials was procured at a higher price and
subsequently rubber price fell. Because of this the firm was
unable to sell the finished products at reduced market prices.
Another unit making loss was manufacturing food products,
which almost stopped production owing to technical problems
and intervention of authorities.
One entrepreneur was not able to manufacture and market
her ready made garments due to prolonged ill health, and
reported the business as running on no-profit and no-loss
condition. A rubber foam-manufacturing unit was cutting down
production, and stated no-profit-no-loss condition. FourPage 4
'charitable societies-manufacturing curry powders, electrical
items, and miscellaneous products-who also undertake printing
works-stated no-pro fit-no-loss condition for their units.
Business condition of units
Running on profit
No. ot units
No protit-no loss
Expansion of the units
Of the sample, 75 percent of the units had expanded since
establishment. The other 25 percent had no expansion plans.
The unit-wise expansion undertaken is presented in table 2.
Expansion of Sample Units since Establishment
Figures in parentheses represent percentages.
Note: P.R-Plasticâ€Rubber; R-M-Readymade Garments, C.W.C- Concrete-
wood-Carton, Priâ€Printing, F-C- Foodâ€Chemical, Elee.-Electrical, Misc.
All the units of readymade garments and concrete-wood-
carton units, 80 per cent of miscellaneous, 70.59 per cent of
food-chemical, 60 per cent of plastic-rubber, and 50 per cent
each of printing and electrical units expanded production
capacity after inception.
SEDME 27.2Page 5
Growth Pallern of Small Scale Units/ 61
One printing unit procured additional machines and
increased capacity, but later on sold off some of the machines.
In all the categories, 50 per cent or more of the units had
undertaken expansion. .
///. Starting new units
Three entrepreneurs, one in each of plastic, readymade
garments and food products categories had-set up additional units
in the same line. Two of these units are in partnership and one in
IK Entrepreneurs' involvement in other business
The entrepreneurs were asked to state their involvement in
other business, if any, and the responses are presented in table 3.
Excluding the charitable societies and co-operative societies, 51
entrepreneurs were considered for their involvement in other
Involvement in Other Business
figures in parentheses represent percentages.
About 57 per cent of the total entrepreneurs were involved
in other business. Twenty-four (82.76%) of them were in the
same line and five (17.24%) in a different line of activity.
Involvement in other business was highest in concrete-wood-
carton units (80%), followed by miscellaneous (6.67%),
readymade garments (64.29%), plastic-rubber (60%), printing
(50%), food-chemical (41.67%) and electrical (33.33%) units.
June 2000Page 6
Sales growth rate
The growth rate measured in terms of sales is one of the
indicators of the effectiveness of various strategies adopted by
the entrepreneurs in the market place. The growth achieved in
sales depends on factors such as the marketing mix, the initiative
and drive of the entrepreneurs and the changing market
conditions. The problem of small firms wanting to remain small
forever for fear of losing the concessions available has been
pointed eut by a number of writers such as Tyabji (1989)Ã‚Â® and
The growth rate of the sales of the sample units was
analysed using time series analysis. Linear trend values were
calculated using the equation:
Where y represents the sales, t the time variable, and a and b are
parameters to be estimated from the equation.
Sales figures relating to six years, starting from the year 1992 to
1997 were collected from the units. All the units were in
existence for at least one year in the year 1992 and hence were
able to provide the sales figures. Even though the entrepreneurs
were reluctant to give the sales data, assurance of confidentiality
with respect to the identity of the units made them provide the
sales data. Using the sales turnover of six years, average annual
growth rate was calculated assuming a linear trend with sales as
the dependent variable and time as the independent variable.
Linear trend was assumed because the data showed linear
movements during the period. Table 4 presents the average
annual growth rate for different units.
SEDME 27.2Page 7
Growth Pallern of Small Scale Units/ 63
Average annual growth rate (percentage)
^\. Period of
groups & ^^^^
No. of units ^*\
Growth rate of the unit excluding the sales figure of 1997
June 2000Page 8
1. Plastic-rubber units
In this category, two units showed negative values of
growth rate. The first unit, a crumb rubber manufacturing one
established in 197S, had its peak sales during 1993 and 1996 with
more than Rs.l.S crore. But the sales fell to less than one crore
in 1997. The fluctuation in the price of rubber and the general
slump in the economy were stated to be the reasons for' such a
growth pattern. The other, foam bed manufacturing unit with â€
5.75 per cent growth rate, was deliberately bringing down the
-production level due to environmental and personal reasons.
Of the two plastic units, the one which was established in
the late 1980s showed 6.8 per cent growth, wliile the other one
established during 1990-92 period showed 12.76 per cent growth.
The highest growth rate of 158.57 per cent in this category
was seen in a Medicare product-manufacturing unit, which was
started during 1990-92 period. Even though 71.2 per cent growth
rate was seen in one unit, it was facing difficulty in staying in
the market on account of the fluctuations in rubber prices at the
time of the study. This unit is a typical example of Kerala based
units having high inventory of finished goods and raw materials
indicating marketing problems.
2. Ready-made garments
The readymade garments units showed an average annual
growth rate in the range of 8.33 to 20 per cent, except in the case
of one unit with a growth' rate of -9 per cent. Credit realisation
problems and low level of demand were reasons assigned for the
negative growth rate. The readymade garment units operate in a
highly competitive market and no drastic increase or decrease in
sales turnover was visualised in these units.
All the units in this category were established during 1990-
92 period. Concrete product units recorded high growth rates of
SEDME 27.2Page 9
Growth Pattern of Small Scale Units/ SS
370 per cent and 156 per cent. The units expanded their
customer base during the six to seven years of their existence and
showed a high growth rate. Lack of demand is not a problem for
these units. The characteristics of the products and difficulty in
arranging wide distribution limit the growth of these units.
The two wood product units showed a growth rate of 45.7
and 20.08 per cent. The carton-manufacturing unit showed a
growth rate of 56.38 per cent even though the unit operated in a
highly competitive market.
4. Printing units
The two units that showed high growth rates of 18.81 per
cent were charitable society units. They have big customers and
the members in the board of directors play a major role in getting
customers. One of these units was doing binding of notebooks
and supplying to schools. The unit earns substantial part of the
revenue through this activity.
The growth rate envisaged in the proprietary units ranged
from 1.87 to 7.78.
Two units in this category showed negative growth trends.
The unit with growth rate -7.89 per cent was started in late 70s.
This unit was doing very well in the.1980s, even exporting their
products. The unit achieved a sales turnover of Rs.25 lakh in
1987. About 300 people were given indirect employment by this
unit in addition to the regular workers. But, as raw material
availability and labor became scarce and the entrepreneur was
getting older, the unit had completely stopped production. The
unit had gone in for packing and selling of the products
manufactured and delivered by other small units.
Another unit which showed negative growth rate was a
pickle manufacturing one. The unit had to stop production for
some time due to technical problems.
June 2000Page 10
The units that registered the lowest growth rates were
being run by charitable societies. The highest rate of 382.85 per
cent was also recorded by a charitable society.
One curry powder manufacturing unit showed a growth rate
of 204.28 up to 1996 and due to deliberate reduction in
production and marketing, the average sales growth rate came
down to 86.43 per cent in 1997.
The three chemical units, all of which were established
during 1990-92 period showed growth rates of 185, 78.75 and 41
per cent. One unit anticipated a 400 per cent increase in sales
turnover in 1998 over the previous year.
6. Electrical products
A unit established during 1985-90 period got the highest
growth rate of 138.4 per cent in this category. One unit, due to
incapability in marketing the products, showed a negative growth
trend of 7.01 per cent.
7. Miscellaneous products
The highest growth rate was 105 per cent and the lowest
0.09 per cent, which was that of a charitable institution.
Conclusions and future perspectives
The small scale units exhibited a satisfactory growth rate
in most of the cases. About 88 percent of the units were making
profit. Only two units reported losses, while 75 percent of the
units expanded since establishment. Fifty-seven percent of the
entrepreneurs were involved in other business and about 83 per
cent of them were in the same line of activity. Only the rest of
them were involved in a different line of activity. Very high
growth rates were recorded by a few units, which had been only
six to seven years in the market. Only one unit from the
electrical products that was established in late 1980s was an
exception to this.Page 11
Growth Pattern of Small Scale Units/ 67
The food-chemical units registered a higher growth rate in
general. Very high growth rates Were not evident in readymade
garments and printing units. These two categories faced stiff
competition in the market. None of the enterprises studied grew
into medium or large scale enterprises.
The overall growth rate of the sample units was
satisfactory, even though three was much more potential to grow.
Most of the entrepreneurs limited their growth due to reasons of
fear of managerial problems, loss of tax incentives for SSI units,
marketing problems, scarcity of finance and other related units.
Promotional measures to alleviate the fears and change the
mindset of entrepreneurs are necessary to make the units grow
into medium or large enterprises. Most of the women
entrepreneurs faced problems with respect to marketing and
finance. Training and development in imparting professional
management skills will be a boon to women entrepreneurs, most
of whom were first generation entrepreneurs.
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Enterprises Development 2(1), 4-12
Cromie S. (1987). Motivations of Aspiring . Male and Female
Entrepreneurs." Journal of Occupational Behavior, vol.8, 251-261. DC,
SSI (1992). Report on the Second All-India Census of Small Scale
Industrial Units (All-India). Ministry of Industry, New Delhi, Government
Tyabji N. (1989). The Small Industries Policy in India- Calcutta, Oxford
University Press '
Vepa, Ram K. (1988). Modern Small Industry in India: Problems and
Prospects, New Delhi: Sage.