Ompetition with the Textile Industry of Surat - Assignment Example

How can the Human Resource department help a small business compete with a well-established company of the Surat textile industry? Introduction The Surat textile industry in India forms the countrys biggest man-made fabric (MMF) sector (Reggie, 2014:n.p.). This textile industry zone is a major competitive market, where small enterprises are constantly struggling to survive. This is because; the well-established companies in this industry have always obtained an upper hand in the market, owing to the fact that that their huge resource base enables such organizations to manipulate both the economic and the market factors operating in the Indian textile market, enabling them to guarantee their survival and profitability. However, the case is different for the small enterprises operating in the market, considering that their limited resources limit their ability to manoeuvre through the marketing and the economic factors that are a hindrance to their effective performance. Resource shortage is a major limitation that hinders the small enterprises from performing effectively in the textile market in India. This hinders their ability to gain competitive advantage over the well-established companies. Nevertheless, the human resource function has remained one of the most important factors in determining the success of a business whether small or large (Wong & Aspinwall, 2004:87). This is because; knowledge is one of an enterprise’s most valuable assets that influence its competitiveness (Lawton, 2001:12). In this respect, while the well-established companies may have an upper hand in terms of financial and other essential business resources, one area of competitiveness that the small business can manage to match or even overcome the large companies, is in the area of human resource development. Therefore, this study seeks to establish how the human resource department can play an important role in enhancing the competitiveness of small textile businesses operating in the Surat textile industry. The interest in this area of study emanates from the realization of the fact that; small business forms the fundamental backbone of most economies in the world (Susman, 2007:21). The importance of small business to the domestic economies of many countries derives from the fact that the highest percentage of small businesses operating within any given domestic economy, are locally owned (Susman, 2007:236). This simply means that even where the large organization, which are mainly either foreign-base or firms in partnerships with local enterprises, might opt out of the domestic market, the economy will continue to thrive, courtesy of the small enterprises which are locally-based. Therefore, this study seeks to emphasis the important of the small-scale business within an economy, through seeking for ways in which the small enterprises can manage to apply their most important asset, which is the human resource function, to take control of the Surat textile market, which forms an important part of the Indian economy (Wing, 1997:17). In the year 2013 alone, the USA imported textile and apparel products worth $104 billion from the Surat textile industry alone (Reggie, 2014:n.p.). This serves to indicate the magnitude of business in this market, while also demonstrating the existing potential available in the market for the small businesses to exploit. Therefore, the relevance of this study is that, it seeks to create new knowledge on how small businesses can apply their single-most important asset to compete in the Surat textile industry with the well-established companies. The human resource function is the only practical business area that small enterprises can use to effectively compete with the well-established companies in the market (Wing, 1997:22). Therefore, the impact of this study will be to enable the small enterprises already operating, or the ones seeking to venture into the Surat textile industry market gain a different approach to competitiveness, through applying the human resource function as the major competitive tool. Literature review Surat textile industry Surat is a city within the Gujarat State of India, which ranks as the eight largest city in India, and rank the fourth in the list of the fastest growing global cities (City Mayors Statistics, 2007:n.p.). The city also has a healthy population growth trend, standing at 2.1 million residents according to the 2001 census data, and growing steadily to 4.6 million residents according to the 2011 census data (Watson, 2012:77). The relevance of this market as an Indian textile hub emanates from the fact that, the Surat textile industry alone accounts for 40% of the total man made fabric production in India, and thus has been referred to as the silk city of India (Reggie, 2014:n.p.). Further, Surat City accounts for 18% of the overall Indian national textile exports throughout the world, forming the major textile hub of the country, especially in the area of manmade fibre production, where the city accounts for 28% of the total manmade national fibre production (Watson, 2012:72). The major textile activities that characterize Surat textile industry includes embroidery, weaving, fabric processing and yarn production, which mostly happens at the synthetic level, ranking this market amongst the popular synthetic textile cities globally (City Mayors Statistics, 2007:n.p.). On a daily basis, the Surat textile industry produces an average of 30 million metres of raw fabric and 25 million metres of processed fabric, while the market produces around 90% of the total polyester that is consumed in the Indian market (Watson, 2012:44). The major strength that characterises the Surat market is its ability to adapt to the changing market trends, making it effective in competing with the global textile industries. In addition, the industrialists in this market are highly entrepreneurial, making it possible for the Surat textile market to remain highly innovative and trendy, thus keeping up with the global fashion developments (Reggie, 2014:n.p.). The role of Human Resource Department in promoting organizational competitiveness The major characteristic of small enterprises is that they have limited resources at their disposal (Susman, 2007:41). This being the case, most of the competent and effective employees are attracted to well-established enterprises and other competitive large organizations, considering the fact that they are assured of job security and associated benefits (Mayhew, 2012:n.p.). In this respect, the human resource function can play an important role in enhancing organizational competitiveness, through preparing a suitable working environment for the organization, which may in turn attract highly qualified and competent personnel. Knowledge is an important asset that enhances organizational competitiveness (Lawton, 2001:13). Therefore, the establishment of an effective knowledge management practices within a small enterprise will make it possible for the business to create a suitable framework for knowledge management, which in turn would enhance the competitiveness of the small enterprises. Individual competencies represent the cornerstone of the small business performance (Wong & Aspinwall, 2004:92). In this respect, the ability of the small enterprises to attract competent and knowledgeable individuals is vital for enhanced business performance, and its consequent market competitiveness. The core capabilities and the intellectual capital of a small business are deeply rooted in the personal knowledge (Wing, 1997:18). This being the case, it is through the effective development of the human resource function, that small enterprises can be able to capitalize on their fundamental strength, and thus be able to compete with the large organizations. The key to the competitiveness of the small enterprises is highly dependent on the ability of the human resource function within the small business to harness and utilize the knowledge capability of the employees, as the main source of competitive strength (Lawton, 2001:14). The human resource department is fundamental for projecting the likely future market trends (Ray, 2013:n.p.). Therefore, considering that the small enterprises are faced with the limitation of resource shortage, the leeway for overcoming this limitation is to apply the projection function of the human resource department. This way, small business will manage to predict the future trends, and thus prepare its workforce in advance for coping with the changes, to enable the small businesses compete effectively with the large enterprises, more especially in the future (Mayhew, 2012:n.p.). The recruitment and training process is another human resource function that is important for enhancing the competiveness of a business organization. Employee turnover is a major hindrance to the effectiveness of resource utilization, considering that there is a lot of resource wastage associated with the recruitment, training and then loss of employees to the competitor organizations (Wong & Aspinwall, 2004:85). In this respect, the human resource function has a major role to play in enhancing the profitability, quality and performance of an organization. Thus, whenever an organizations is able to sustain its labour force without encountering perpetual labour force turn over, the organization is able to save on the expenses that that are incurred through the recruitment, training and subsequent loss of employees (Ray, 2013:n.p.). Through applying the appropriate human resource practices, it will become possible for an organization to develop and retain its workforce, which in turn becomes a source of competitive advantage for the organization. Most fundamentally however, is the importance attached to matching employees with the career that suits their qualifications, abilities and passion (Lawton, 2001:12). This is an important step towards reinforcing the ability of the small businesses to retain their employees, considering that job satisfaction is an essential aspect of employee retention, as opposed to salaries and benefits. Therefore, the ability of the small enterprises to match their workforce with the right jobs will enhance their employees’ retention capacity (Mayhew, 2012:n.p.). This will make it possible for the enterprises to become competitive over the large organizations, which are highly vulnerable to employee turnover issues. References City Mayors Statistics. (March, 11 2007). The world’s fastest growing cities and urban areas from 2006 to 2020: Urban areas ranked 1 to 100. The City Mayors Foundation. Retrieved April 4, 2014 from http://www.citymayors.com/statistics/urban_growth1.html Lawton G. (2001) ‘Knowledge Management: Ready for Prime Time’, IEEE Computer 34(2), 12-14. Mayhew, R. (2012) ‘Ways HR Planning Can Enhance a Firms Competitive Advantage’, Demand Media. Retrieved April 4, 2014 from http://smallbusiness.chron.com/ways-hr-planning-can-enhance-firms-competitive-advantage-60313.html Ray, L. (2013) ‘How Can HR Become a Competitive Advantage for Any Organization?’ Demand Media. Retrieved April 4, 2014 from http://smallbusiness.chron.com/can-hr-become-competitive-advantage-organization-50913.html Reggie T. (Feb 15, 2014) ‘Surats textile exporters eyeing US market’, TNN Retrieved April 4, 2014 from http://timesofindia.indiatimes.com/city/surat/Surats-textile-exporters-eyeing-US-market/articleshow/30414837.cms Susman, G. I. (2007). Small and medium-sized enterprises and the global economy. Cheltenham, UK, Edward Elgar. Watson, J. (2012). The Textile Manufactures and the Costumes of the People of India. London: Spottiswoode. Wing, K. M. (1997) ‘Knowledge Management: An introduction and Perspective’, The Journal of Knowledge Management 1 (1), 12-35. Wong, K, Y & Aspinwall, E. (2004) ‘Characterizing knowledge management in the small business environment’, Journal of Knowledge Management 8(3), 81-92. Read More