Small And Medium Scale Industries Case Study
2.0 Overview and classification of small and medium scale industries in global context
Meanings of Small and Medium Industries differ from country to country, depending on one or more of thresholds laid down in respect of investment, employment, turnover etc. The issue of what constitutes a small or micro and medium scale industry is a major concern in the literature (Ward, 2005). Different writers have usually given different definitions to this category of 25 business. Small and medium scale industries have indeed not been spared with the definition problem that is usually associated with concepts which have many components. The definition of firms by size varies among researchers as well as writers. Others define Small and medium scale industries …show more content…
In using this definition, confusion often arises in respect of the unpredictability and cut off points used by the various official sources.
In struggling to theorize small and medium Industries in Ghana, some points need to be strained. Paramount, there is no universally acknowledged meaning of small or medium scale businesses because of the organization of businesses into large, medium or small scale is a subjective and qualitative finding (Ogboru, 2007). Secondly, small businesses are generally quite responsive to their environment and our environment changes fast. Changes in the environment therefore affect what constitutes a small business at a particular point in time. Thirdly, what the definition aims at is to set some limits (lower and upper) that will assist in achieving the set purpose. Such limits can be in terms of level of capitalization, sales volume, number of employees, etc. A clear definition may be useful in a particular national context but it may not be practical to attempt a universal definition. An attempt is made to present some definitions of SMEs to demonstrate the divergence in definition across countries. In the Ghanaian situation, there have been various definitions given for …show more content…
However, the National Board for Small Scale Industries (NBSSI) in Ghana applies both the “fixed asset and number of employees” criteria. It defines a small-scale enterprise as a firm with not more than 9 workers, and has plant and machinery (excluding land, buildings and vehicles) not exceeding 10 million Ghana cedis. The Ghana Enterprise Development Commission (GEDC), on the other hand, uses a 10 million Ghana cedis upper limit definition for plant and machinery. It is important to caution that the process of valuing fixed assets poses a problem. Secondly, the continuous depreciation of the local currency as against major trading currencies often makes such definitions outdated (Kayanula & Quartey,
Meanings of Small and Medium Industries differ from country to country, depending on one or more of thresholds laid down in respect of investment, employment, turnover etc. The issue of what constitutes a small or micro and medium scale industry is a major concern in the literature (Ward, 2005). Different writers have usually given different definitions to this category of 25 business. Small and medium scale industries have indeed not been spared with the definition problem that is usually associated with concepts which have many components. The definition of firms by size varies among researchers as well as writers. Others define Small and medium scale industries …show more content…
In using this definition, confusion often arises in respect of the unpredictability and cut off points used by the various official sources.
In struggling to theorize small and medium Industries in Ghana, some points need to be strained. Paramount, there is no universally acknowledged meaning of small or medium scale businesses because of the organization of businesses into large, medium or small scale is a subjective and qualitative finding (Ogboru, 2007). Secondly, small businesses are generally quite responsive to their environment and our environment changes fast. Changes in the environment therefore affect what constitutes a small business at a particular point in time. Thirdly, what the definition aims at is to set some limits (lower and upper) that will assist in achieving the set purpose. Such limits can be in terms of level of capitalization, sales volume, number of employees, etc. A clear definition may be useful in a particular national context but it may not be practical to attempt a universal definition. An attempt is made to present some definitions of SMEs to demonstrate the divergence in definition across countries. In the Ghanaian situation, there have been various definitions given for …show more content…
However, the National Board for Small Scale Industries (NBSSI) in Ghana applies both the “fixed asset and number of employees” criteria. It defines a small-scale enterprise as a firm with not more than 9 workers, and has plant and machinery (excluding land, buildings and vehicles) not exceeding 10 million Ghana cedis. The Ghana Enterprise Development Commission (GEDC), on the other hand, uses a 10 million Ghana cedis upper limit definition for plant and machinery. It is important to caution that the process of valuing fixed assets poses a problem. Secondly, the continuous depreciation of the local currency as against major trading currencies often makes such definitions outdated (Kayanula & Quartey,