Role of Acceptance and Analysis in Business Situations

In the webinar on the above subject organized by Bija Training under their Mask Leadership series on 1st December 2021,  the speaker was Ms Renu Bohra, CHRO, DBShenker India Pvt Ltd. The webinar covered  aspects such as the relationship between acceptance and analysis, ways to enhance one's analytical skills, developing critical thinking skills and the significance of culture when it comes to rational and critical thinking. 

In this connection, she discussed  the air crash of the Korean air cargo flight 8509 in December 1999 which was the last such incident involving the airline resulting in a fatal accident. The aircraft crashed into the Hatfield forest shortly after take off from London Stansted airport, killing all the four crew members on board. The accident was on account of a technical snag when the plane was in the control of the senior pilot. The first officer (junior) whose Attitude Direction Indicator( ADI) was working correctly, knew that there was a mistake but was unwilling to challenge his captain's actions or make any attempt to take over the flight with his own controls.The following video in a nutshell gives the summary of the discussions.

Other things also touched upon during the discussion include the assertion of the speaker that while analytical thinking is important, we should not give a go by to holistic thinking wherein she mentioned Edward De Bono's "Six Thinking Hats" which gives sufficient place to  all forms of thinking including intuitive thinking.  It is often seen that analysis tends to be done when there is a failure. We would do well to analyse the reasons for success as well so that they can be replicated. To a question as to whether there are situations wherein analytical thinking is not valid or need not be done, the speaker pointed out that in occasions of an emergency like that of a fire, action rather than analyzing is the key requirement. It was pointed out from the audience that in matters of compliance also where the law has already been passed, you would simply have to comply and not much room would be available for analysis.  

The speaker concluded by stating that acceptance of everyone in the company, a culture of  analysis (both  it's need and embracing its results)  can be gained by involving people in the process of analysis and decision making.Making employees stakeholders and giving them sound reasons for decisions made will go a long way in building such a  culture. Overall, it was a very rewarding webinar which I am happy to share with my readers. 

Comprehensive Look at the Life, Times and Future of MSMEs in India

The Micro, small & medium enterprises (MSMEs) play an important role contributing almost 29% to the GDP  of the Indian economy . As per the 2018-2019 Annual Report of the Department of MSMEs there are 63.4 million MSMEs in India employing 110 million people. Around 51% of the MSMEs are in rural locations. Thus they not only provide opportunities for entrepreneurs but create jobs for a wider spectrum of the population in terms of age, sex, geographies and perhaps more job satisfaction than in depersonalized large organizations. They help in the development of local communities and enable people to find their livelihood closer home. Further, 40% of the total export from India are produced by this sector . Thus, the health of MSMEs are vital for the health of a developing economy like India. 

The classification for identifying small units which was based on the investment was recently amended in May 2020 by the Government of India to enhance the upper limit of the investment and also bring in the factor of turnover. Accordingly the units are classified as follows:  

Micro Enterprise:  Investment up to Rs 1 crore, turnover up to Rs 5 crores 

Small Enterprise:  Investment up to Rs 10 crore, turnover up to Rs 50 crores 

Medium Enterprise: Investment up to Rs 50 crore, turnover up to Rs 200 crores   

Some of the challenges that MSMEs have been facing over the years include are finance related, marketing and managerial related, technology related, competition related and labour related challenges. In a way they are inter connected and become a vicious cycle when the organization is operating within tight financial constraints. 

The sector which was already facing difficulties associated with demonetization (operating largely in the informal domain, the overall credit availability for the sector diminished considerably), the arrival of Covid 19 and the national lock down on March 24th 2020 struck further blows. Many countries to which the MSMEs exported were affected by the pandemic and they in turn reduced or cancelled orders. Similarly raw materials supply from abroad was also adversely affected. The sector is  grappling with  poor cash flow, slowing demand and rising unemployment.   

The Government of India has released financial package to tide over the Covid 19 financial crisis in the form of relief measures by RBI and announcements by the finance minister (20 Lakh crore package). This includes a special refinance facility to Small industries development bank of India to the tune of 15,000 crore for passing on to small businesses through non bank/micro finance institutions, moratorium on term loan EMIs for a period of six months, 20,000 crore subordinate debt scheme, Rs 3 Lakh crore credit guarantee( will be repaid to financial company by Government if remaining unpaid), Fund of Fund corpus (Rs 50,000 crore) with contribution from Government , LIC and SBI.   

It may be too early to come to a conclusion as to whether the relief measures have helped MSMEs to bounce back. It is however a fact that 35% of MSMEs and 37% of self employed persons have gone out of business. The relief measures have either not reached them or were not adequate enough as revealed by a survey conducted by the All India Manufacturers' organization(Results published in June 2020). The unemployment rate also rose from 4% in April 2020 to 6% in May 2020. The sentiment amongst MSMEs is that the Government should have extended upfront liquidity and that providing loans has only increased the burden on businesses. Being an important pillar, MSME revival at the earliest is most essential.

It is suggested that like the single window concept for processing applications for new units, Government consider arranging services under one roof connecting MSMEs and the service providers in the areas of marketing, accounting, technology and HR. This would be mutually beneficial to both the MSMEs and the service providers. Regular training similar to those envisaged under the ZED program (Zero defect maturity levels) as also entrepreneurial development program will go a long way in strengthening MSMEs to meet the challenges as they shrug away the impact of the pandemic and move towards a bright future.  

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