Abstract:
Any organization or institute stands on various pillars and spreads out in divisions. While the tasks and their responsibilities may be divided, the strength of any organization and its successful existence is a duty that rests on the entire organization as a whole. However, the job is easier said than done. Each such organization faces restraints, has its high and low points, has external and internal factors at play and depends heavily on its principle running members, i.e. employees. All these and many, in a complexly intertwined network, can have both, a devastating impact if even one is out of line or make the organization an epitome of success if all goes well. As closely knit as this network is, the accountability circle also encompasses all the elements. Thus, in case of failure no one can be blamed and in case of success all are, to some extent, worthy of praise. A report, the sort that we attempt to present here too, is an attempt to uncover these very complexities of a few but intriguing organizations of Pakistan.
For the purpose of this particular final project, we chose to present a thorough analysis on the organization, “Small and Medium Enterprises Development Authority” (SMEDA). An organization that once stood out as a role model and starting point for many new business ventures has transformed much in the years since its establishment. While the arena of its contribution in the practical field has increased, in terms of the categories of tasks it now undertakes, the organization has gone through various ups and downs within the walls of its office. While there are numerous points of analysis in the organization, we have narrowed down our scope in part to discovering the reasons of a downturn of SMEDA in its so many years and in part to exploring the difference between BDS, its core division, and CSD in terms of employee behaviour and organizational politics. The report revolves around points of contention regarding SMEDA as an effective organization and the tussle between two of its most important departments, and gradually establish and understanding of in what ways and how badly do all this effect SMEDA’s goal achievement.
SMEDA was found in 1998 with the aim of aiding the growth of small and medium enterprises in Pakistan. A non-profit and semi-government organization, SMEDA started off as policy mediator, plan constructor and, soon enough, the research and development hub for all such SME ventures. Since start till now, the organization has its assistance providing mechanisms in financial services, current industries’ support in terms of technical advancements, research and information, women empowerment, Youth Loans, legal services and technical support. SMEDA believes in the progress of SMEs as the driving force of the national economy and it aims to continue to play its due role in bringing about this development. The Vision of the organization is, "Growth of globally competitive SME sector, through a conducive environment and support services, serving as an engine of sustainable growth for national economy". Following from this, the Mission Statement of SMEDA is, "To assist in Employment Generation and Value Addition to the National Income, through Development of the SME Sector, by helping Increase the Number, Scale and Competitiveness of SMEs". Keeping the two in mind, the organization is accredited for a number of achievements and has held much significance not only in the economic sphere but also within the political avenues, especially in the course of structuring SME policies. SMEDA comprises of certain divisions, two of which, CSD and BSDS, are the focus of this report. Central Support Division (CSD) and Business Services and Development Sector (BSDS) are highly important as the latter carries out the tasks SMEDA was intended for and the former is the communication bridge and support provider within the organization.
However, SMEDA has changed immensely in the past many years and mostly this change has been negative. Once after providing a background on what the organization is, the report moves on to its analysis.
The first component of this discussion is a Strengths, Weaknesses, Threats and Opportunities (SWOT) analysis. The organization benefits from favourable team dynamics and an encouragement of initiative-taking behaviour which makes it possible for almost anyone in the firm to place their ideas on the table. More so, the offices at SMEDA have a professional and technically efficient working environment and this is topped by adequate knowledge instilled in its employees. The employees gain from this and from flexibility in their job description mostly in terms of department rotation. With various opportunities that they have, employees at SMEDA have mostly remained loyal to the organization. Apart from this, SMEDA strongly stands as close to a private organization as possible despite it being partially associated with the government. The organization also has a proper structure of top-down decision making within it and a mechanism of purely merit based selection of any incoming clients. All of these, in turn, majorly contribute in the successful projects which SMEDA is acknowledged for.
Though the organization also suffers from numerous lacks, even though, it is autonomous of government control, the recent management hierarchy holds much resemblance to that of governments and a bureaucratic culture has crept in. There is evidence in the organization of contradictory resource allocation and unfair promotions based solely on superiority in SMEDA. Such demotivation translates further into work procrastination. Apart from all this, the dependence of SMEDA on the government is proven by the drastic effects certain recent policies have had on the organization, upsetting it to a great extent.
Looking at the current situation of SMEDA, it is claimed that, besides its faults, the organization has some opportunities in its reach. They may still be able to gain importance if they successfully widen their base of clients and this is especially possible since there are a number of young entrepreneurs in the process of surfacing. Moreover, with the modern media in action, SMEDA holds a good chance at popularity through advertisements. However, in this same scenario, SMEDA faces a couple of threats that can further push down the organization. With the recent involvement of government personnel in the organization, a huge risk emerges in the face of increasing number of government employees coming in. Furthermore, SMEDA is threatened by non-serious clients and by the advent of private consultation firms which may deplete the organizations prospective clientele.
The report’s analysis is built-on by providing the Political, Economic, Social, Technical, Environment and Legal (PESTEL) analysis. It is hereby argued that SMEDA is closely tied to political factors as not only does its own functioning depend on policies set by the government and, in general, the government’s backing of the organization but also because in the current picture there is a large space taken up by bureaucrats. Moreover, SMEDA now must simultaneously represent the private sector in negotiations with the government but also incorporate in its projects the Youth Business Loans introduced by the Sharif government. It must do all this while being surrounded by the political situation of Pakistan which is full of dismay and uncertainty.
On the economic front, SMEDA has to balance the government’s economic policies, tax rates, inflation and recession, restrictions of the banking sector and sufficient funding by the government. It must also be aware of the instability of various costs, especially labour costs in Pakistan.
The social aspects hold an equally important role to play as an impacting factor. First and foremost, with the concepts of freedom and individuality prevailing in the society, SMEDA can now have more clients to guide who all want to do their own businesses. Also, with the rising education levels, there are not only more able candidates available for SMEDA to employ but also it has a widening client base. The growing numbers of prospective clients are now becoming more accessible with the use of internet and media. Lastly, the most important impact has been in terms of emergence of an increasing number of females in the workforce, both, for SMEDA and for the entrepreneurs it counsels.
Speaking about the technical factors, SMEDA is again affected from more than one side. The organization must be aware of new technologies for the sake of its own efficiency and also for advancement of the industries it has to support in terms of research. More so, technology has a crucial role to play in the daily workings of SMEDA, be it transferring of files through internet or printing for filing, some technology or the other is being continuously used.
Further, environmental factors produce certain consequences for SMEDA as well. The organization has to abide by its social responsibility of protecting the environment and needs to specially cut down its paper use for that. Moreover, the organization stands vulnerable to any natural disasters, like the fire in SMEDA’s office approximately a year ago.
Lastly, on the legal side, SMEDA has to mainly deal with the laws set up by the government for it. These guide basic actions, like hiring, of the organization. Apart from this, SMEDA has a planning and policy division dedicated to monitoring any legal issues in its projects. The organization has to conscious of not breaking any rules and starting up legal fiascos.
Another means of analysis that the report mainly puts forth after these two models is the Force-field analysis whereby certain restraining and driving forces of the organization are identified and analysed. Along with this, a critique is presented of the Vision, Mission and Objectives of the firm. Here the points of difference between the words and actions of SMEDA are highlighted and these then help extend our understanding of why has the organization failed.
Crucial at this point then are the results of the surveys we conducted. A sample of 20 CSD and 20 BSDS employees were surveyed and their findings support the already established ideas and also provide a few more insights. Fundamentally, they indicate that while the CSD is mostly satisfied and agrees with the organization’s working manners, BSDS has a lot of reservations. With the emergence of a bureaucratic trap and organizational politics, BSDS feels pushed behind and thus, lacks motivation. Along with this, the loyalty of the employees seems unstable in case of BSDS.
Towards the end, through this report, we intend to propose certain recommendations which are aimed at overcoming the weaknesses, facing the threats and growing out of the shackles of government control.