CHAPTER ONE
INTRODUCTION
Nigeria is one of the countries
in West Africa with vast population of both human and natural resources for her
full development. One of the ways developing countries like Nigeria starts high
level development is through the establishment of different types of business
organisation that will help the country to channel her resources into
productive areas. This means that business organisation can play a major role
in the process of transforming an underdeveloped economy like Nigeria into a
developed one.
Business organisations form the
most important aspect of the economy of every developed nation. There are
different kinds of organisations such as governmental, religious, charity,
trade unions and associations but none of the above mention appears to be as important
to the economy as the business organisations, this is because they are closely
and generally identified as economic institutions. In most parts of the world,
the high value of small scale enterprises in the process of socio-economic
development has been well documented, particularly in developing countries. It
is now realised that large scale enterprise cannot be alone be expected to play
a dynamic role, that they are suppose to play in the rapid growth and
development of the economy. (Nwoye, 1994).
Business
organisations can therefore be described as an organised effort or activity by
a person or a group of persons employing the resources of the environment to
produce and distribute goods and services with objective of maximising profit.
(Barach, 1977). The major incentive for
setting up a business enterprise is the profit motive, There are many
entrepreneurs that do not easily recognise that they are established in other
to provide some services to the society. In such cases, providing services is
the same as creating a customer to achieve whatever objective he may have. A
business man or woman must be familiar with event in his or her environment.
Commencing
a new business like small scale business in Nigeria and making it grow involves
both the science of creation and art of management. It also entails a lot of
risk but chances of making it succeed will be better if one understand the
problems that will be met and work out as many of them as possible before the
business takes off and such Problems includes Failure to plan, skilled
manpower, infrastructure, finance, raw materials.
Another important consideration for any
businessman and woman is the decision to know about the form of business
organisation to adopt. Basically there are three forms of business ownership,
we have the single proprietorship, partnership and corporation. Single
proprietorship is an enterprise owned by an individual, the owner is the
manager, it is commonly found in the areas of retailing firms, professional
practice, repair shops e.t.c. The
formation of a small business under single proprietorship does not need any
legal formalities, since the business and its ownership are often one and the
same. (Nwoye, 1994). Partnership is a form of business organisation owned by
two or more persons by voluntary arrangement. As is sole proprietorship,
partnership is not a separate entity from the owners. The legal requirements in
formation of a partnership are also minor in registration of business and
securing of a license or permit. (Nwoye, 1994).
Small scale business is any business
organisation whose annual turn-over does not exceed five hundred thousand naira
(500,000). Its capital includes cost of machinery and equipment which does not
exceed six hundred thousand naira and employees not more than fifty workers
Corporation is the most complex type
of business organisation both in formation and operation. A business
corporation has been described as legal entity having separate life from its
owner unlike the two other forms of business organisation, The ownership is
represented by shares of stock in the company. Anyone who owns shares in a
corporation becomes part owners of the business. To determine which of these
three categories of organisations that best describe a particular business
organisation, a number of factors are considered such as availability of
capital required, ability and experience of owner, difficulty of organisation,
degree of control, types of business engaged, the size of the market and even
the location.
The
increasing rate of failure of many small scale business organisations in the
rural areas of Edo State, suggest that this kind of business is facing some
problems, this situation has prompted this study to wanting to examine both the
remote and immediate problems if any that faces this business organisation
Statement of the Problem
Small scale business in the rural areas
of Edo State have problems that are widely observed by the generality of the
people. Small scale business appears to be either disappearing or incapable of
growing and expanding. It appears that many undergraduates are roaming the
street without job, this existing and disturbing observation has prompted the
researchers to carry out this study to assess the problem confronting small
scale business from going into extinction, if this trend is not curtained now,
sooner or later, unemployment rate would be uncontrollable in Edo state due to
the unenticing nature of small scale enterprises in The rural areas . Most
small scale enterprises in rural areas are unattractive to graduates due to
lack of infrastructural development and other factors.
Purpose of the Study
The purpose of the study is to identify
the problem facing small scale business organization in Edo State. Specially, the study sought to ascertain:
1.
The way Financial problem affect small scale business
in Edo state.
2.
The way lack of infrastructures affect small scale
business in Edo state.
3.
The way failure to plan affect small scale business in
Edo state.
4.
The way lack of skilled power affect small scale
business in Edo state.
5.
The way raw material problem affect small scale
business in Edo state.
Research questions
The questions which this study
attempt to answer is:
1.
How does Financial problem affect small scale business
in rural areas of Edo state?
2.
How does lack of plan affect small scale business in
Edo state?
3.
How does raw materials
problem affect small scale business in Edo state?
4.
How does infrastructure
problem affect small scale business in Edo state?
5.
How does lack of skilled manpower affect small scale business in Edo state?
Significance of the Study
This
project is written with a view to presenting an examination in problems facing
small scale business organisations in the rural areas of Edo State, which of
course will enlighten the mind of scholars and other interested persons that
are inquisitive in knowing the problems confronting the small scale business
organisation.
This
study is expected to be of great benefit to all prospective and aspiring
individuals who want to operate business enterprises in rural areas of Edo
State. So also it is intended to benefit other researchers, policy planners and
government both at state and Federal levels.
Scope of the Study
This
study of the trends in business organisation is specifically related to small
scale business and in particular problems facing small scale problems in rural
areas. But this is not to say that large scale business organisation is not
facing some problems. But due to time and financial constraint, only a sample
of the small scale business organisations in the rural areas of Edo State will
be included in the study