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Socio Economic Problems, SME Management-Management-Assignment Solution, Exercises of Business Management and Analysis

Amity University - BiharBusiness Management and Analysis

This is solved assignment for Management course. It was submitted to Prof. Ethaha Grewal. In this course, i learned many different concepts and basic topics of Management. Like in this file, you can see I learned about Sme, Management, Requirement, Sector, Non-Agriculture, Labor, Force, Suitability, Development, Environment

Typology: Exercises

2011/2012

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SPRING 2012
SME Management (MGT601)
Sample solution of Assignment No.01
Requirement
1.
As mentioned above that SMEs are more critical for economic expansion of developing countries like
Pakistan. The environmental factors also support the fact that developing countries are more suitable for
SMEs growth. You are advised to probe the issue and give at least ten (10) arguments in the favor of
aforementioned the statement.
Introduction
SME sector is the backbone of Pakistan’s economy and playing a significant role in the economic
expansion of Pakistan. The government has declared this sector as one of the major drivers of growth.
According to census conducted by Pakistan Bureau of Statistics, there are approximately 3.2 million
business enterprises in Pakistan that fall under the category of SMEs. These enterprises have employed
up to 99 persons constitute over 90% of all private enterprises in the industrial sector and employ nearly
78% of the non-agriculture labor force. SMEs contribute over 30% to the GDP and account 25% of exports
of manufactured goods besides sharing 35% in manufacturing value added. These figures are the ample
evidences that SMEs are playing their due role.
Suitability for SMEs Development and growth in Pakistani business
environment
The suitability of SMEs expansion in the business environment of Pakistan is a question that needs to be
addressed. The suitability of SMEs expansion in the Pakistani business environment can be demonstrated
by following arguments keeping in consideration the characteristics of SMEs.
1
. Pakistan is a developing country where the per capita income of the people is $ 1254 (Economic Survey
of Pakistan, 2011-12). The financial capacity of people leads them to operate small or medium size
business as it requires less capital.
2. Pakistan is a country where out of 162 million people, 60% people are living in rural areas (World
Bank, 2011). The access to education is very poor thus they cannot capable to operate technology-
incentive business. They usually operate in SMEs which are more of labor-incentive with limited capital.
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Download Socio Economic Problems, SME Management-Management-Assignment Solution and more Exercises Business Management and Analysis in PDF only on Docsity!

SPRING 2012

SME Management (MGT601)

Sample solution of Assignment No.

Requirement

1. As mentioned above that SMEs are more critical for economic expansion of developing countries like

Pakistan. The environmental factors also support the fact that developing countries are more suitable for SMEs growth. You are advised to probe the issue and give at least ten (10) arguments in the favor of aforementioned the statement.

Introduction

SME sector is the backbone of Pakistan’s economy and playing a significant role in the economic expansion of Pakistan. The government has declared this sector as one of the major drivers of growth. According to census conducted by Pakistan Bureau of Statistics, there are approximately 3.2 million business enterprises in Pakistan that fall under the category of SMEs. These enterprises have employed up to 99 persons constitute over 90% of all private enterprises in the industrial sector and employ nearly 78% of the non-agriculture labor force. SMEs contribute over 30% to the GDP and account 25% of exports of manufactured goods besides sharing 35% in manufacturing value added. These figures are the ample evidences that SMEs are playing their due role.

Suitability for SMEs Development and growth in Pakistani business

environment

The suitability of SMEs expansion in the business environment of Pakistan is a question that needs to be addressed. The suitability of SMEs expansion in the Pakistani business environment can be demonstrated by following arguments keeping in consideration the characteristics of SMEs.

1. Pakistan is a developing country where the per capita income of the people is $ 1254 (Economic Survey

of Pakistan, 2011-12). The financial capacity of people leads them to operate small or medium size business as it requires less capital.

  1. Pakistan is a country where out of 162 million people, 60% people are living in rural areas (World Bank, 2011). The access to education is very poor thus they cannot capable to operate technology- incentive business. They usually operate in SMEs which are more of labor-incentive with limited capital.
  1. It is very unfortunate that in Pakistan, enterprises, either public or private, have not generated adequate employment opportunities for masses. Thus SMEs are best source of self-employment and absorb many potential candidates.
  2. There is an abundant of skilled, semi-skilled and unskilled labor in Pakistan at cheap wages. SMEs can absorb such labor as affordable with limited financial resources.
  3. Pakistan is a politically unstable country where the government’s inconsistent polices and tug of war among the political parties have made the political environment volatile. In such scenario, SMEs production facilities are faxable enough to absorb such unpleasant political shocks.
  4. The production facilities of SMEs are very flexible so they can avail any opportunity if exists.
  5. The legal system is very week in Pakistan and does not protect the rights of masses. SMEs require less legal complications, thus it is easy to start or windup a business in Pakistan. Such businesses are less affected by the legal disorders.
  6. In current situation where due to poor law and order situation and terrorist attack, multinational companies are reluctant to invest is Pakistan, SMEs are creating employment opportunities to bridge this gap.
  7. In Pakistan, the accessibility to finance is very poor. In addition to that, the financial institutions are very few in numbers. Thus starting a small or medium size business with personal capital is the most suitable choice for entrepreneurs.
  8. The government of Pakistan is also promoting SME development in the country and has established SMEDA (Small & Medium Enterprises Development Authority) for assistance.
  9. The existence of Large Manufacturing Units (LMUs) in Pakistan also supports the SME sector. LMUs provide the opportunities of sub-contracting and absorb the semi-finished or finished goods of SMEs in their production processes.

In short aforementioned facts are adequate to endorse the fact that Pakistani business environment is more suitable for SMEs development and growth.

  1. Why it is believed that SMEs growth can resolve many socio-economic problems faced by developing countries like Pakistan. Give at least five (5) arguments in the support of your answer.

Answer: Before sharing the arguments regarding the SMEs potential to solve socio-economic problems, let’s observe the basic socio-economic problems of Pakistan.

  1. Poverty
  2. Unemployment
  3. Health related Issues and population
  4. Acceleration of urbanization
  5. Illiteracy

Marking Strategy

1. It was required to generate arguments in the favor of your answer, thus each argument

contains 1 mark.

2. It was mentioned in the teacher’s guide that irreverent material will not be graded.

3. It was mentioned in the teacher’s guide that any text copied from internet without any

reference or from student’s blogs will be marked as ZERO.

4. Corrupted file (if not repairable) will be marked as ZERO.

5. Any file received after the due date will not be entertained.

6. Any identical answer copied from following or any other relevant source will be marked as

ZERO in the account of plagiarism.

Have a happy learning.