1.0 Introduction
1.1 Background Of The Study
In many year, most of developing countries, shared a common epoch of colonialism which made them primarily agricultural exploiting countries and importers of manufactured products.
This economic epoch of began to be substituted with a new one of modern growth soon after the exits of colonialism, particularly, in the year 1950s to 1960s. The most common strategy adopted by most countries to achieve this period of modern growth was import substitution that is industrialization which has as its main goal.
The replacement of traditional imported consumer goods and services with domestic substitute or domestic production of the imported substitution, it is assumed that there is already an existing market for the domestic industrial out put. Thus, high standards of efficiency are often not considered an important requirement for the new manufacturing industry to remain in business.
Small-scale manufacturing enterprises provide the starting only serve as the spring board and training ground for the later, but they are vital of the economic and social life of the community.
As such “academicians, businessmen and other had begun to recognize how small-scale business is really but business in microcosm. As Philip Clark puts “many small-scale businesses are small remain small will not aspire to anything larger because the world in which they function is suited to small scale operation not large ones” this means that environments and nature of products or service has great influenced over the size of the business. Nevertheless, some small-scale businesses go on to secure large scale.
In developing countries like Nigeria, where multinational corporations have tended to monopolies production activities the need for small-scale enterprises owned and managed by Nigerians is perhaps too evident. It is only by the active encouragement given to such enterprises that the nation can begin to diversify her productive activities.
Small-scale manufacturing businesses are the cove of larger scale industrialization and development.
Even in the industrialized nations, the larger corporations of today often evolved from early beginning as small-scale enterprises. Only recently (1984) over 75% of the three million new jobs created in the united states economy could be attributed to the employment opportunities in small-scale enterprises considering the present level of unemployment in Nigeria.
It is easy to see how timely and appropriate the promotion of small-scale manufacturing business will be although national accounts do not provide us with any quantitative data concerning the direct economic contributions made by small-scale enterprises so far.
However, due to the spring up of scale businesses is clear that on the aggregate, they made meaningful contributions to the level of production, the level of employment, and the conservation of foreign exchange earnings.
Small-scale manufacturing businesses about in the Ihitte Uoboma Local Government Area, although bit business overshadows small-scale ones in manufacturing, there are none less than two thousands of small-scale manufacturing industries in the area.
They include among others, manufacturers of soap and detergents, bread, and biscuit, furniture and a host of others too numerous to mention small-scale manufacturing businesses are not without problems which can be fundamental to their birth existence and growth, that generate private and public concern.
Therefore, in Aboh-mbaise Local Government Area in Imo State where the research was carried out, the activities that was conducted is to know the Problems and Prospects of Small Scale Manufacturing Businesses.
1.2 Statement of the Problem
It is a known fact that all manufacturing industries concerns be it small-scale, medium or larger scale businesses engage in the production of goods and services that appeals to the society.
An organization does not exist in a vacuum it exists in its environment, which provides resources and limitations, and continue to exist only when the environment desires its outputs and will accept its activities failure to adequately adapt to the environment is a major cause of organizational failure.
The elements in the environment of an organization include persons, physical resources and climate, economic and market conditions attitudes and laws. All those element have their own inherent problems.
The personnel in the organization has to be recruited, trained and above all integrated into the organization work to be done has to be divided into manageable units called tasks and people have to be assign duties with commensurate authority be enable them accomplish the tasks. Infact, the organization has to be managed by competent personnel. To properly manage the organization, the managers have to perform their managerial functions of planning, organizing, directing and controlling the activities of the organization to achieve its main objectives.
Before the products are manufactured funds have to be acquired from both internal and external sources. In the processes of acquiring the necessary funds, the financial manager has to encounter a lot of problems.
Acquisition of funds leads to production of the goods and services. To produce, raw materials we have to be secured, machines have to be organized in an acceptable manner to the organization and infact, the inventory has to be controlled to avoid over or under utilizations to the manager at different levels, goods and services of the organization have to be marked or converted back into money. The market has to be identified and all marketing plans and strategies employment to market the products produced. Indeed the market has to be studied carefully to know what they want and at what time.
All these means that there are problems at different stages of the organization, the functional area of the organization has their own peculiar problems at different or similar to each other. Some of these problems emanating from the environment in which the businesses operate. This study, will therefore, attempt to find suitable solutions to the numerous problems of small-scale business in Aboh Mbaise local Government Area and at the same time, make useful recommendations that will brighten the prospects of small-scale manufacturing business in general and industrialists.
1.3 Aim and Objectives of Study
The aim of the study is to examine the Problems and Prospects of Small Scale Manufacturing Businesses using Aboh-mbaise Local Government Area in Imo State as a Case Study. In achieving this aim the following specific objectives were laid out as follows:
- The problems of small-scale manufacturing businesses
- To find out causes of the problems and prospects of small-scale manufacturing businesses.
- To identify the effects of the problem of small-scale manufacturing businesses.
- To ascertain the possible strategies for improving the efficiency or the prospects of small-scale businesses.
1.4 Research Questions
The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:
- What are the problems of small-scale manufacturing businesses?
- What are the causes of the problems of small scale manufacturing businesses?
- What are the effects of the problems of small scale manufacturing businesses?
- What are the strategies for improving the efficiency or the prospect of small-scale businesses?
1.5 Significance of Study
The study was an in-depth examination of identifying the problems and prospects of small-scale manufacturing businesses with a view that the study will be of immense importance in many ways.
Firstly, businessmen will find the work of the nature useful as it is hoped that through it, the small scale industries, if properly managed, can give rise to large scale industries.
The findings also were intended to enable the government alleviate the problems so far identified. It will also create a greater employment opportunity to the people in Aboh-Mbaise in general.
The study will nevertheless be of very great importance to the entrepreneurs who will find the work very useful, for it aims at examining their background in order to identify their problems and possible chance of success.
The findings will also be of great importance to economists and students who will like to carry out a research of the nature.
1.6 Scope of the Study
The study areas consist of three zones in Aboh-Mbaise randomly selected covering the areas needed. The three zones selected are Amainyi, Isinweke and Abueke. The study is limited to the problems and prospects of small-scale manufacturing businesses on Aboh-Mbaise Local Government Area.
1.7 Limitations of the Study
The research has been down but not without some limitation. The researcher was confronted with some inhibiting factors during the time of study such as;
The researcher could have included many firms but because of limited time, the researcher could only study few firms.
In addition to this work, the researcher was faced with other problems such as attending lecturers, take home assignment in preparation for the forth-coming final examinations.
Secondly, it had been financial constraints, more questionnaires could have been printed and more places could have been covered to get more factual position of things.
Thirdly, some managers refused to give the actual information about their financial position as they thought it was for taxation purposes.
Also transportation problems should not be over looked, with the recent increase in transport fairs.
Because of the sensitivity of the topic, as it involves business secrets, the management of most of the companies approached by the researcher bluntly refused to give information especially those pertaining to the company's balance sheets and income statements notwithstanding the researchers' guarantee of confidentiality.
The purpose of this was for the researcher to asses the financial performance of the firm through the use of profitability ratios to see the change in the capital structure over time.
1.8 Definition of Terms
Industry: This refers to the manufacturing of goods and thus being different from agriculture. It is also a branch of trade or manufacture contracted with distribution and commerce.
Small-Scale Business: This is industries consisting of small firms ranging from household and cottage establishment of medium sized factories. And these types of industries start business with small initial amount of money.
Infrastructural Facilities: Things necessary to facilitate industrial operation such as pipe borne water, electricity, good road etc.
