An Analysis on the Critical Parameters Influencing Sustainability for Agri Business Industry: A Systematic Review and Conceptual Frame Work

 

Usha N.¹, Dr. G. Devakumar²

 

ABSTRACT:

In India the MSME sector inhabits the second position in terms of employment generation. In this context Micro, Small and Medium Enterprises (MSME) have considerably contributed to the fiscal progress of our country. The development of the MSME sector is exceptionally important, as it holds the key to ample growth and plays a crucial role in comprehensive growth of our country.The aim of this paper is to review the literature on sustainability of small business so as to identify the influencing parameters which are responsible for the long term sustainability of small business.This paper further aims to develop a Conceptual Framework for Business Sustainability in Agri Business sector. Various Scopus indexed journal articles from the year 2010 to 2017 were considered for literature review. Based on the literature survey and gap identified, the framework includes the three independent parameters such as Entrepreneurial Competency (EC), Business Model (BM), Innovation and Technology (IT). Hence from the summary of literature survey it was identified that, the collective contribution of EC, BM and IT leads to Business Sustainability (BS) of Small Agri Engineering Manufacturing Companies. Hence the measurability for the sustainability of the Agribusiness is developed through conceptual framework via three parameters namely EC, BM, IT. The outcome of the above study is expected to identify the, challenges faced by the small and medium size industries in the Agri Engineering sector for future sustainability.

 

 

INTRODUCTION:

Entrepreneurship plays an important role in creating a pathway for job requirement of unemployed community, thus contributing towards self-employment for budding entrepreneurs and increasing the financial status of the individual. Entrepreneurship has converted many individuals into prosperous business persons and brought about income to the individual and thus contributed to the Gross Domestic Product (GDP) (K. V. R. Rajandran, 2011).

 

Hence it is essential to create jobs by venturing more and more business opportunities. Entrepreneur has the ability to recognize the opportunity and accumulate the necessary resources to materialize the identified opportunity. Being risk takers, entrepreneurs produce new products and introduce new services, certainly add value to the society (K. V. R. Rajandran, 2011). Thus entrepreneurship proves to be the most important part of the growth of a Nation. According to various authors, Entrepreneurial Competency, suitable Business Model, critical Innovation and Technology contribute to business success.

 

The significance of the study is to develop the conceptual framework for the sustainability of small business by considering the parameters like, Entrepreneurial competency, business model or innovation and technology. Since small business is limited in size and finance, it has constraints with respect to manpower, quality and on time delivery.

 

Most of the small scale manufacturers do not have the expertise and resource to meet the demand of farm mechanization. The majority of the small and medium size industries in the Agri Engineering sector are facing tremendous challenges to meet the high standard of quality.To be competitive in this sector, it is the order of the day to inculcate innovative ideas for achieving quality work, less turnaround time, low operational cost for reaching grass root level in the market which is most essential (Mani andSahoo, 2016). Hence in-depth literature review has been carried out to identify the various parameters which will influence for sustainability of small business.The authorintends to inculcate innovative ideas for the future proposed framework for business sustainability.

 

A Conceptual Framework for Business Sustainability of Agri Engineering Companies has been developed by considering Entrepreneurial Competency, Business Model, Innovation and Technology through literature review.

 

BACKGROUND STUDY:

According to the author Parthajeet Das (2017), MSME shave contributed a lot to the fiscal progress of our country. Further the author highlights in India, the MSME sector inhabits thesecond position in terms of employment generation. This sector contributes towards 95% of the industrial units, 45% of manufacturing output, and 40% of total exports of the country. MSMEs have better prospects to grow as auxiliary industries to release higher industrial growth. Hence MSMEs are considered to be one of the most employment friendly and less capital intensive.

 

India has enormous growth potential to generate and increase the capacity of companies both in theservice and manufacturing sector by using the accessible resources. Hence the development of the MSME sector is exceptionally important as itholds the key to ample growth and plays a crucial role in comprehensive growth of the country.

 

SIGNIFICANCE OF THE STUDY:

According to the study done by Matejun, 2016the major challenges encountered by MSMEs include; lack of infrastructure, capital, marketing linkages, innovation, skilled human resource, entrepreneurial competency, technology and appropriate business model.Though there are many research scholars addressed on the individual components of business model for its sustainability. Hence this researcher is intended to few parameters like EC, BM and IT and their influencing factors so as to develop the conceptual framework for the sustainability of Agri Engineering Company.

 

METHODOLOGY OF THE SYSTEMATIC REVIEW:

It is indeed to analyse the various parameter which will bring out measurability of the sustainability of business. Hence various Scopus indexed journals have been reviewed and the gaps identified are listed as below (Table 1).

Table 1: Literature Review

Author/ Year	Research Focus	Research Findings	Scholar’s Comments about the Research work
Siwan Mitchelmore et al. (2010)                       David L. Brannon et al. (2016)                     Marek Matejun (2016)                                     José Sánchez (2011)         M Botha, J.J. van Vuren et al. (2015)           Syed Abidur Rahman et al. (2015)               Se´rgio Cavalcante et al. (2011)                 Fredrik Hacklin et al. (2012)                 Alexandre Joyce et al. (2016)               N.M.P. Bocken et al. (2016)         Sukanlaya Sawang et al. (2011)             Jun Yan (2011)               Barbara Bigliardi et al. (2011)                 Nicole E. Coviello et al. (2012)                       Teresa Krasnicka et al. (2013)         Daniel I. Prajogo et al. (2013)                           Andre´ Spithoven et al. (2013)   Jeroen P.J. de Jong (2013)           Minna Halme et al. (2014)	To initiate a literature review on the research done by various authors of various countries at different times on the contribution of entrepreneurial competency and furnish a consolidated report. Also to evolve avenues for future research on entrepreneurial competency           To experimentally scrutinize the effect of business model innovation on performance of the SMEs                     To perceive and assess the duty of technology entrepreneurship in the accomplishment of innovativeness of SMEs                                 To explore the effect of entrepreneurial competencies on the performance of SMEs through a model     To explore the supportive skills and important skills required to be added to the entrepreneurial training model and program         To experimentally analyze the impact of support from Large Private organizations on entrepreneurial success among the base of economic pyramid division through entrepreneurial competencies       To explore the necessity to stimulate the concept of business model and suggest a new categorization to differentiate the various types of business model           The purpose of this study is to propose to view business model as strategy and to explore the conclusion and constraints of exercising business model as planning equipment         To analyze the business model canvas tool which is triple layered and to explain its features via nestle nespresso business model           To explore the potential of sufficiency-driven business model and to inspect the way they are designed, maintained and the way the approaches are used.   To verify the present perfect practice of innovation application efficiency in SMEs and to further increase the efficiency of the model.         To examine the relationship between task conflict and innovation in small business             To explore the technological inventive characteristics of SMEs of Italian production segment               To find the involvement and contribution of the customers towards major innovation                       To explore the effect of innovation on the performance of SMEs         To explore the performance of small service firm in comparison with the performance of medium service firms with reference to innovation and their influence on the performance.                   To explore the influence of open innovation on the performance of SMEs compared to large firms   To study the choice of the SME owners to accomplish the opportunities found         To explore the innovations of SMEs concerned with habitat and communally responsible in context of resources	The entire research has focused on the aspects of competencies like skills and knowledge which makes the entrepreneur competent enough. Performance of an organization highly depends on the capabilities of an entrepreneur. Entrepreneurial competencies consists of both inbuilt qualities of an entrepreneur as well as the skills acquired through education and training. The required entrepreneurial and managerial capabilities are different at different stages of growth of enterprises and at different contexts.     The base model was statistically significant. There was improvement in the base model, innovativeness variable was positive and important                     In Most of the medium sized companies the effect of technology entrepreneurship accomplishment on technology innovation is found with a difference of 20% in alignment to application of innovation in technologies. The purview of application of innovation in firms and management to a very small extent depends on the purview of accomplishment of the idea of technology entrepreneurship mostly applicable to medium sized companies.                   Entrepreneurial competencies directly or indirectly affects the performance of small firms       Established enterprises give more importance to functional competencies than start-up SMEs. Skills like marketing, financial management, operations, securing resources, motivation and legal are important for both established and start-up SMEs     The impact of support given from Large Private organizations through technical and training enhanced the entrepreneurial competencies among Base of Pyramid (BOP) entrepreneurs. Entrepreneurial competencies add to the generation of BOP entrepreneurial success and form a bridge between business success and training and technical support.   Strategically it is very important to adapt business model towards a firm's innovative activity which will be a part of organization’s dynamic capability. The literature on dynamic capability reveals that there exists a regular pattern of activities in an organization.         A commendable elemental pattern is provided by the business model for mapping the existing business model of an organization. Business model acts as an illustrative product encouraging  artistic decision making process in the process of evolving and discussing strategic alternatives than a logical tool with apparent consecutive steps     Triple layered business model canvas (TLBMC) supports analysis of the business model and innovates viable business models by providing a horizontal consistency within every canvas layer by evolving a profound understanding of economy of organization. The TLBMC works towards value creation.   Sufficiency approach influence the life cycle of the product from extraction of the raw material to production. Thus it causes change in production and consumption     Supportive top management results in positive implementation environment, smart employees with good communication skills contribute to find solutions to the problems, organizations which realizes the benefit of implementation of innovation would likely to adopt innovation in future also.   Task conflict give way to creative ideas and enhance the performance of small firms. Participative leadership style help in conversion of assignment clash into innovation in small business. Goal orientation of the entrepreneur is positively related to the innovation and performance of small business network.   The commitment level of a proprietor is higher towards product and process innovation in innovation oriented firms. Market, product, technology and process knowledge is higher in innovation oriented firms than less innovation oriented firms. The important restraints for innovation in SMEs are consumer need, weak learning approach and network   New product development activity fails when customers won't participate. Major innovation and new product development was successful in the organizations where customer participation was there. Major innovations are successful in technology oriented firms with the involvement of customers in the process. Success of the new product development process depends on the customer's technical eagerness and feedback. Successful major innovation takes place in technology oriented organization which is open for innovation and experiments. There is no sturdy optimistic relationship between innovation and SME performance in context of profits, economic and finance, more the no of production innovative measures more will be the market innovation   There is no noticeable difference between small and medium service firms in discovering and making use of innovative measures. Innovation has higher influence on small firms compared to medium firms. The implementation of innovative measures shows constructive result on the performance of small firms compared to medium firms. Implementation of innovative measures gave a constructive result in profits. Innovation in SME s is affected by inside obstacles like conventional leaders and shortage of resources and outside obstacles like govt support.   Innovative behavior is important for the growth of dynamic capabilities that enable and support innovation in open innovation   Attitude is not concerned with opportunity identification and exploitation. The opportunities which were found attractive were identified and exploited. Support from family or friends is required for the success of innovation   Finance, business expertise, contacts, research & development assistance and fame are imp for innovation. Innovation may result from the availability of few of the resources. For technological innovation business expertise is important.	The article speaks about the competencies required by the entrepreneurs and managers to enhance the performance of the organization. But further there are many areas which require to be focused on. Hence Entrepreneurial Competency has been identified as one of the major factor which would have a significant impact for the business sustainability in the proposed framework development for Agri Engineering manufacturing companies         The importance of innovative business model is emphasized and the article experimentally proves that innovative business model improve the performance of the firm through collection and processing of the data. Hence Innovative Business Model has been identified as one of the major factor which would have a significant impact for development of the framework and there by the business sustainability of Agri Engineering manufacturing companies can be attained.     The entire study focus on technology entrepreneurship results in bringing in innovativeness in products and in medium sized firms. Here the author has identified bringing up the innovation and technology from the grass root development of any organization will lead to organizational success and business sustainability. Hence the author has considered Innovation & Technology as another important factor along with Entrepreneurial Competency, Business Model for the sustainability of the business. In conclusion the author has considered the following for development of business sustainability framework and also measurability for sustainability of business, 1. Entrepreneurial Competencies, 2. Business Model 3. Innovation & Technology. This will lead to business sustainability     Entrepreneurial competencies play a major role on the performance of SMEs. Also entrepreneurial competency enables to recognize the competition and take appropriate decisions to face the same.   This article gives insights about the model which speaks about the skills like marketing, financial management, operations, securing resources, motivation and legal are important for both established and start-up SMEs. Training programs needs to be framed and conducted to enhance these skills.     The effect of training in enhancing the entrepreneurial competencies in large private organizations is analyzed in this article. The framework can be used by the organizations as a business model for social cause. The important relationship between the support of Large Private Organization(LPO) and the success of small business can be treated as an innovative input in BoP territory   In this article the importance of business model in the functioning of an organization is analyzed. Business models are flexible enough to accept modifications for effective functioning of the regular activities.             The function of the business model in decision making is explained in this article. A business model can be used as a strategic tool provided it is carefully changed and implemented.             In this article one of the types of business model called triple layered business model canvas and its applicability is discussed. Business models are required to reconstruct the organizations           The effects of using sufficiency in business model is clearly defined and it is advisable  to use extensively         This article emphasizes the importance of innovation, skilled employees and attitude of the entrepreneurs towards innovation. The positive results of implementation of innovative measures always encourage the entrepreneurs to practice innovation continuously.     This research work reveals that task conflict can prove to be the source of innovation. Participative style of leadership is advisable to the entrepreneurs since it is beneficial to utilize the knowledge of employees to bring about innovative changes in the organization.       Innovation oriented SMEs and their entrepreneurs are analyzed. To implement process and product innovation effectively, it is necessary to be highly committed for the entrepreneurs. For the purpose of progressing and competing with other contemporary industries it is required for the SMEs to adopt innovation.       The importance of customer involvement in major innovations of small firms is discussed. The various dimensions of customer involvement are discussed in detail. Small firms will be successful in new product development by considering the input of the customer.               The study in this article reveals that, there is no positive relationship between innovation and financial performance of SMEs. Product innovation results only in market innovation       The effect of innovation on small firms compared to large firms is discussed in this article. The positive effect of increasing the performance is more visible in small firms than in large firms. But certain internal factors and external factors affect the implementation of innovation which should be overcome.                 Innovative behavior leads to dynamic capabilities and support open innovation in SMEs     The characteristics required for implementation of innovation are firm decision, opportunity identification and support from family and friends.       For innovation to be implemented few qualities are very essential and are discussed in this article. The qualities are business expertise, contacts, R & D and rapport in the industry.

 

 

 

SUMMARY OF LITERATURE REVIEW:

According to the report of Indian Brand Equity Foundation Oct 2017, agriculture plays a vital role in Indian Economy; majority of the rural households depend on agriculture as their principal means of livelihood. Agriculture, along with fisheries and forestry, is one of the largest contributors to the Gross Domestic Product (GDP). As per the 2nd advised estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry and fishery) is 17.3% of the Gross Value Added (GVA) during 2016-17. During the last 10 years, the GDP of agriculture and allied activities growth in India is as shown in (Table 2)

 

 

 

 

 

 

 

Table 2: Last 10 years GDP of Agriculture and Allied Activities

Sl No.	Year	GDP in USD in Billion
1	2007	137.17
2	2008	162.67
3	2009	141.77
4	2010	139.39
5	2011	157.35
6	2012	160.80
7	2013	140.77
8	2014	132.71
9	2015	259.23
10	2016	244.74

GDP of agriculture and allied sectors in India was recorded at USD244.74 billion in FY16.

 

According to the advanced estimates of Ministry of Statistics and Programme Implementation (MOSPI), agriculture and allied sector recorded a Compound Annual Growth Rate (CAGR) rise of 6.64% during FY07-16 According to the status report The Future of Food and Farming, June 2012 developed by IAgrE for UK government, agricultural sustainability depends on the best utilization of natural resource, application of best practices and adaptation of suitable technology. It can be achieved through the support of the Government bodies, institutions, management skills, human capital with appropriate leadership skills and innovation. Human capital with the ability to innovate in Agricultural sector is more likely to be responsible for agriculture sustainability. It is necessary to come out of the mundane agricultural practices and bring innovation for the sustainability.

 

Agricultural mechanization should contribute to sustainable increase in productivity and cropping intensity so that the planned growth rate in agricultural production is achieved. Mechanization is capital intensive and substantial sums have been invested in our country. In the absence of good planning and direction, investment on mechanization may not yield expected results. Hence Entrepreneurial Competency and Business Model play a vital role in Agri Engineering Business Sustainability. India adopts a policy of selective mechanization under diverse conditions, which makes the agricultural mechanization a challenging task. An appropriate mechanization technology suiting to the needs of the farmers is required to be adopted by the Agri Engineering Companies Entrepreneurs (Mehta, Chandel and Senthilkumar, 2014). Hence there is a requirement of strong support from the Agri Engineering Companies for farm mechanization. Business Sustainability of Agri Engineering Companies has been considered for in-depth research considering the Entrepreneurial Competency, Business Model, Innovation and Technology for Sustainability.

 

Development of Conceptual Framework:

According to Siwan et al. (2010), who emphasizes that, the competency required by the entrepreneurs and managers, is to enhance the performance of the organization. However there are many areas which require to be focused on. Hence Entrepreneurial Competency (EC) has been identified as one of the major factor which would have a significant impact for the business sustainability in the proposed framework development for Agri Engineering manufacturing companies.

 

David et al. (2016) have emphasized the importance of innovative business models and experimentally prove that innovative business models improve the performance of the firm through collection and processing of the data. Hence Innovative Business Model (BM) has been identified as one of the major factor which would have a significant impact for development of the framework and there by the business sustainability of Agri Engineering Manufacturing companies can be attained.

An investigation done by Matejun (2016), in hisexperiment the author focused on technology entrepreneurship results to bring in innovativeness in products of medium sized firms. Also the above researcher has identified bringing up the innovation and technology from the grass root development of any organization will lead to organizational success and business sustainability. Hence thisresearcher has considered Innovation and Technology (IT) as another important factor along with Entrepreneurial Competency, Business Model for the sustainability of the business in the proposed development of the framework.

 

Based on the above gaps identified, the author strongly believes that, the measurability for the sustainability of business can be developed through the conceptual framework using the following independent parameters.

1. Entrepreneurial Competency (EC)

2. Business Model (BM)

3. Innovation and Technology (IT)

 

The author has taken further to carry out her research work by means of developing a conceptual framework for business sustainability as referred in (Fig 1).

 

Fig 1: Conceptual Framework for Business Sustainability:

 

The above Fig 1 represents the Conceptual Framework for Business Sustainability. It includes the three independent parameters such as Entrepreneurial Competency (EC), Business Model (BM), Innovation and Technology (IT). The collective contribution of EC, BM and IT leads to Business Sustainability (BS).

 

RESEARCH IMPLICATIONS:

This study delivers three important repercussions for research. Firstly, this study amplifies the literature of entrepreneurship by providing comprehensive and a methodical information about the parameters influencing the business sustainability. The literature review reveals the relationship between the various parameters responsible for the business sustainability. Among those parameters, three important parameters such as Entrepreneurial Competency, Business Model, Innovation and Technology were identified.

 

 

Second, this study has helped to develop a conceptual framework taking into consideration the independent parameters such as Entrepreneurial Competency, Business Model, Innovation and Technology for business sustainability.

 

Third, further based on the identification of endogenous and exogenous factors, survey questionnaire would be developed for the primary data collection from the proposed targeted audience in the Agri Engineering business sector of Karnataka.

 

CONCLUSION:

A methodical and significant review was conducted to give an in-depth analysis of the parameters influencing the business sustainability. Various Scopus indexed journal articles from the year 2010 to 2016 were considered for literature review.Based on the gaps identified from the literature review, the independent parameters such as Entrepreneurial Competency (EC), Business Model (BM) and Innovation and Technology (IT) were derived.

 

A Conceptual framework for business sustainability has been developed and taken for subsequent research work for the sustainability of Agri Engineering Companies.

 

LIMITATIONS OF THE STUDY:

This is study is limited to the review of literature from Scopus indexed journals. As this is an ongoing research, the researcher might explore the additional related journals with the identification of factors would be taken forward for the next level.

 

ACKNOWLEDGEMENT:

The author would like to thank Ramaiah University of Applied Sciences, Bengaluru for having permitted to carry out the research and their unflagging support during the tenure of my research.

 

CONFLICT OF INTEREST:

The authors declare no conflict of interest.

 

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Received on 06.11.2017          Modified on 08.12.2017

Accepted on 24.12.2017           ©A&V Publications All right reserved