Table 1: Craft Concentration (District-wise)

Name of District	Major Crafts
1. Alipurduar	Cane and bamboo, embroidery, jute items, soft doll, stone carving, wood carving
2. Bankura	Baluchari (sari), bamboo items, brass and bell metal, decorative lantern, dokra, painting, patachitra (scroll painting), shell carving (conch and coconut), stone carving, terracotta, wood carving.
3. Birbhum	Artistic leather items, batik, brass and bell metal, dokra, kantha stitch, sholapith, terracotta
4. Cooch Behar	Cane and bamboo, jute items, shitalpati, sholapith, soft doll, wood carving
5. Dakshin Dinajpur	Cane and bamboo, dhokra (jute mat), embroidery, imitation jewellery, jute items, mask, mat (natural fibres), shola pith, soft doll, terracotta, wood carving.
6. Darjeeling	Bamboo and cane, brass and bell metal, embroidery, painting (on cloth), white metal jewellery, woollen items, wood carving.
7. Hooghly	Batik, imitation jewellery, terracotta, Zari and chikan embroidery.
8. Howrah	Batik, coconut shell, imitation jewellery, jute items, sholapith, soft doll, wig, wood carving, zari.
9. Jalpaiguri	Cane and bamboo, embroidery, jute items, soft doll, stone carving, wood carving.
10. Jhargram	Bamboo basket making, pottery, rope making (babui), sal leaf plates, stone craft
11. Kalimpong	Batik printing, carpet weaving, dying, handkerchiefs, handloom products, jewellery, masks, painting, scrolls, and wooden products.
12. Kolkata	Artistic leather items, batik, batik, clay model, copper repoussé, embroidery, imitation jewellery, jute items, kantha stitch, paper craft, soft dolls.
13. Malda	Bamboo and cane, dhokra (jute mat), embroidery, jute items, kantha stitch
14. Murshidabad	Bamboo items, bell metal and brass, clay doll, coconut shell and husk, conch shell carving, jute items, kantha stitch, sholapith, and wood carving
15. Nadia	Brass and bell metal, clay doll, shell carving (conch), terracotta
16. North 24 Parganas	Cane and bamboo, embroidery, imitation jewellery, jute items, kantha stitch, soft doll, terracotta, wood carving, zari
17. Paschim Bardhaman	Wood carving, jute items, kantha stitch, sholapith, terracotta
18. Paschim Medinipur	Bamboo items, brass bell metal, embroidery, horn products, imitation silver jewellery, natural fibre products (mat), Patachitra (scroll painting), stone carving, terracotta (pottery), wood carving, zari.
19. Purba Bardhaman	Dokra, jute items, kantha stitch, sholapith, terracotta, wood carving
20. Purba Medinipur	Brass and bell metal, bamboo items, batik, carpet, jute items, kantha stitch, marine jewellery, mat (madurkathi), patachitra (scroll painting), shell carving, wood carving, zari
21. Purulia	Bamboo items, dokra, lac items, masks, natural fibre (babui grass) products, soft doll, wood carving.
22. South 24 Parganas	Embroidery, jute items, silver filigree, terracotta, wood carving, zari
23. Uttar Dinajpur	Bamboo items, jute items, mask, sholapith, terracotta, wood carving, woollen items

Despite their immense potential, handicraft MSMEs face a unique set of challenges. There needs to be more capital, more marketing and distribution channels, adequate knowledge of market trends, and a need for more access to modern technology, which often hinders their growth (Yadav et al., 2023). These limitations are further compounded by high transportation and energy costs, complex bureaucratic processes, and an unpredictable policy landscape (Goyal et al., 2018; Upadhyay et al., 2016). However, amidst these challenges lies an unwavering entrepreneurial spirit and a constant drive to innovate and adapt.

Recognising the critical role of handicrafts in West Bengal's economic tapestry, researchers have focused on identifying the key ingredients for their success. Three crucial factors emerge as central to their flourishing:

(i) Business environment: A supportive and stable business environment fosters entrepreneurial confidence and encourages risk-taking (Khurana et al., 2022). Government policies, infrastructure development, and access to financial resources all play a vital role in shaping this environment (Bhamra et al., 2024; Ahmed and Alam, 2021; Rust et al., 2004; Morrison et al., 2003).

(ii) Entrepreneurial orientation: Handicraft businesses that exhibit proactive behaviours, embrace innovation and demonstrate a willingness to take calculated risks are more likely to thrive in a competitive market (Tessema and Alemu, 2024; Goyal and Mishra, 2023; Sahoo and Yadav, 2017). A strong entrepreneurial spirit fuels adaptation, growth, and success (Yadav et al., 2023).

(iii) Innovation capability: The ability to continuously innovate, be it in product design, production processes, or marketing strategies, is essential for staying ahead of the curve (Migdadi, 2022). Handicraft businesses that invest in developing and implementing innovative solutions are better equipped to cater to evolving customer preferences and navigate an ever-changing market landscape (Hudnurkar et al., 2023; Raghuvanshi et al., 2019; Srinivasan and Kunjangad, 2019).

Understanding the complex interplay between these three variables can unlock the true potential of West Bengal's handicraft MSMEs. Our study aims to achieve this by employing a measurement model to identify the most critical indicators contributing to a supportive business environment, a strong entrepreneurial orientation, and robust innovation capability. Through Confirmatory Factor Analysis (CFA), we look deeper into the intricate relationships between the factors and their ultimate impact on the success of handicraft enterprises in West Bengal.

By nurturing a supportive business environment, fostering an entrepreneurial spirit, and encouraging continuous innovation, West Bengal's handicraft MSMEs can continue to thrive, painting a vibrant picture of economic prosperity and cultural pride. This study serves as a crucial step in understanding the recipe for their success, paving the way for a future where the intricate threads of tradition and innovation intertwine to create a tapestry of sustainable economic growth and cultural preservation.

THEORETICAL REVIEW:

Business Environment:

Understanding the complexities of the business environment is crucial for any organisation seeking to thrive (Trehan and Kaur, 2015). As Jena et al. (2018) highlight, a business environment encompasses various external factors that either propel a company's growth or hinder its progress. While Mohideen and Rao(2012) differentiate between internal and external environments, external forces pose significant challenges due to their dynamic and often unpredictable nature. Subha(2012) emphasises that navigating this intricate landscape requires knowledge and intuition to anticipate future shifts and eliminate subjective biases. This is imperative because, as Ahmed and Alam (2021) and others (Bhamra et al., 2024; Goyal et al., 2018; Rust et al., 2004; Morrison et al., 2003) point out that the business environment is shaped by a web of interconnected elements, including consumers, suppliers, and competitors. Failing to grasp this complex interplay can render even the most established and successful enterprises vulnerable to unforeseen turbulence. Therefore, a deep understanding of the external environment and its potential impact is a key driver of sustainable success in the rapidly evolving corporate world.

Entrepreneurial Orientation:

Entrepreneurial orientation encompasses the mindset, actions, and strategies that drive entrepreneurial success. It is about identifying and capitalising on valuable opportunities by utilising creative resources (Goyal and Mishra, 2023; Thomas, 2016). This involves a specific process, practice, and decision-making style focused on generating new and unique offerings that set ventures apart (Sahoo and Yadav,2017). Key characteristics of entrepreneurial orientation include innovativeness, the willingness to take calculated risks, and a proactive approach (Tessema and Alemu, 2024; Goyal and Mishra, 2023). Additionally, traits like a drive for achievement, personal control, self-reliance, and outgoingness contribute to a stronger entrepreneurial orientation (Yadav et al., 2023). A combination of entrepreneurial spirit, strategic planning, and personal attributes fuels successful ventures.

Innovation Capability:

Innovation capability is not just about having new ideas; it is about continuously growing an organisation's ability to identify and capitalise on them effectively. Raghuvanshi et al. (2019) define it as the ongoing enhancement of talent and resources to fuel this process, while Subha (2012) emphasise the underlying factors that enable effective innovation management. Srinivasan and Kunjangad (2019) define innovation as introducing novel technologies that impact various aspects of an organisation, such as systems, policies, and products. They further propose five dimensions to assess innovation capability: product, process, management, marketing, and service innovation. This aligns with other established frameworks like Mohideen and Rao (2012) focus on administrative, technology, product, and process innovation or Migdadi's (2022) emphasis on product, process, position, and paradigm innovations. Hudnurkar et al. (2023) further refine these dimensions by highlighting product, process, management, service, and administration innovation as key avenues for boosting an organisation's innovative capabilities. This broad range of perspectives underlines the multifaceted nature of innovation and the various approaches organisations can take to cultivate their ability to thrive in a constantly evolving landscape.

RESEARCH METHODS:

Population and Sample:

This study focuses on the fascinating realm of handicrafts-based MSMEs across diverse West Bengal, India districts. Determining the exact size of the population within this dynamic, constantly evolving sector can be elusive (Kothari, 2004). Unlike static, well-defined groups, the artisan community is fluid and susceptible to various external factors.

Embracing this inherent uncertainty, the study adopts a flexible approach to sample size calculation. Instead of rigidly clinging to a predetermined figure, it employs a dynamic formula based on multiplying the number of indicators for the five critical variables by a factor ranging from 5 to 10. This factor accounts for the fluidity of the population and ensures a representative sample size.

In this specific case, with ten significant indicators identified, the study multiplies 10 by 10, resulting in a targeted sample size of 100 respondents. This figure captures the richness and diversity of handicraft MSMEs across different districts while remaining manageable for in-depth analysis.

The research utilises purposive sampling to ensure a focused and insightful study. This targeted approach involves intentionally selecting participants based on predefined criteria relevant to the research questions (Srinivasan, 2022). By carefully choosing artisans who represent specific handicraft types, geographical locations, and enterprise sizes, the study aims to gather more affluent and more nuanced data that sheds light on the unique experiences and challenges within each sub-group of the handicraft MSME ecosystem.

This methodological approach acknowledges the complexities of studying a dynamic population like the handicraft MSME community. By embracing flexibility and employing a targeted sampling strategy, the study increases its chances of capturing the diverse realities and challenges these vital contributors face in West Bengal's cultural and economic landscape.

Operational Definition and Variable Measurement:

This study tests a hypothesis and operational variables using an empirical approach, as specified in Table 2.

Table2: Variables and Indicators

Variable

Indicator

Items

Source

Business

environment

Customers

1. Creating customer satisfaction

2. Creating customer loyalty

Bhamra et al., 2024

Goyal et al (2018)

Rust et al. (2004)

Morrison et al. (2003)

Suppliers

3. Have more than one supplier

4. Raw materials quality meets business needs

Competitors

5. Product quality is competitive

6. Competitive product prices

Entrepreneurial

orientation

Risk-taking

7. Business owners dare to experiment with new design

8. Business owners dare to accept the risk of failure

Tessema and Alemu(2024)

Goyal and Mishra (2023).

Yadav et al. (2023)

Proactive

9. Always look for market opportunities for business progress

10. Marketing new products into new markets

Confidence

11. He can overcome difficulties according to his abilities

12. He can solve problems by himself without the help of others

Openness

13. Opening up to collaborate with MSMEs/other partners

14. Business owners are open to receiving criticism from customers

Innovation

capability

Product

innovation

15. Able to create products with different designs

16. Able to create products with harmonious colour combinations

Hudnurkar et al. (2023)

Migdadi (2022)

Srinivasan and Kunjangad (2019)

Gakhar and Kour (2012)

Technological

Innovation

17. Utilising technology in creating products with new designs

18. Ability to adapt ideas to create attractive designs using

technology

Marketing

Innovation

19. Provide new product choices to suit consumer needs through

online media.

20. Expanding market reach through online media.

The research variables were assessed using a Likert scale paradigm, which involved gauging attitudes by indicating agreement or disagreement with the questions presented on a scale of 1 to 5. Specifically, a score of 5 denoted "Strongly Agree", 4 denoted "Agree", 3 denoted "Neutral", 2 denoted "Disagree", and 1 denoted "Strongly Disagree".

Analysis Method:

The research used CFAto analyse the data. This technique is ideal when the researcher already has a preconceived notion about how the hidden variables (factors) relate. Based on theoretical understanding or past research, the researcher crafts hypotheses about the connections between observed measurements and the underlying factors they reflect. Within the Structural Equation Modeling framework, CFA acts as a "measurement model" by solely focusing on the relationships between factors and the variables used to measure them.

RESULTS:

Confirmatory Factor Analysis Results:

Factor loading analysis, a CFA technique, was used to identify the most influential indicators for three key research variables: business environment, entrepreneurial orientation, and innovation capability. Table 3 presents a summary of the CFA test findings.

Table 3: Factor Loadings (λ) Research Variable Measuring

Indicators and Variables		Factor Loading
Customers	Business environment	0.816
Suppliers	Business environment	0.710
Competitors	Business environment	0.724
Risk-taking	Entrepreneurial orientation	0.836
Proactive	Entrepreneurial orientation	0.624
Confidence	Entrepreneurial orientation	0.688
Openness	Entrepreneurial orientation	0.732
Product innovation	Innovation capability	0.778
Technological innovation	Innovation capability	0.760
Marketinginnovation	Innovation capability	0.808

Business Environment:

· All tested factors (customers, suppliers, and rivals) had factor loading values above 0.5, indicating their importance in shaping the business climate.

· Customers emerged as the most significant factor influencing the business environment.

Entrepreneurial Orientation:

· All investigated factors (risk-taking, proactiveness, confidence, and openness) had factor loading values exceeding 0.5, demonstrating their crucial role in developing entrepreneurial attitudes.

· Risk-taking was the most influential factor shaping entrepreneurial orientation.

Innovation Capability:

· All examined indicators (product, technological, and marketing innovation) had factor loading values above 0.5, highlighting their significance for financial well-being.

· Marketing innovation exerted the most substantial impact on innovation capability.

In summary, factor loading analysis effectively identified the most prominent indicators within each research variable, providing valuable insights for further research and practical application in business strategies.

DISCUSSION:

The success of any business hinges on its ability to navigate the external environment. For handicraft MSMEs in West Bengal, this environment comprises crucial elements like customers, suppliers, and competitors (Mulyaningsih et al., 2023). Recognising these factors' significant impact on strategic decision-making, operational processes, and organisational structures, understanding and prioritising environmental cues becomes paramount. Initial steps in strategic adaptation involve continuous environmental monitoring, as Upadhyay et al. (2016) aptly emphasised.

Our research, employing CFA, reveals that customer focus emerges as the cornerstone of the business environment for West Bengal's handicraft MSMEs. This aligns with findings by Bhamra et al. (2024), Morrison et al. (2003), Goyal et al. (2018), and Rust et al. (2004). Satisfying and delighting customers by deeply understanding their needs and preferences should be the cornerstone of any successful strategy in this sector.

Beyond environmental awareness, cultivating an entrepreneurial orientation fosters resilience and competitive advantage (Khurana et al., 2022; Sahoo and Yadav, 2017). Our analysis identifies risk-taking, proactiveness, self-confidence, and openness to new ideas as critical components of this orientation for handicraft MSMEs. Notably, Tessema and Alemu (2024), Goyal and Mishra (2023), and Yadav et al. (2023) echo the crucial role of these attributes. Demonstrating the courage to embrace calculated risks and explore uncharted territory will empower these businesses to thrive in the dynamic marketplace (Mittal et al., 2019).

In today's ever-evolving landscape, cultivating robust innovation capabilities is now optional but imperative for sustained success. Raghuvanshi et al. (2019) define innovation capability as the continuous development of skills and resources to identify and capitalise on opportunities for new developments effectively.

Our research suggests that product, technological, and marketing innovation all contribute significantly to building robust innovation capabilities for handicraft MSMEs. Notably, Hudnurkar et al. (2023), Migdadi (2022), and Srinivasan and Kunjangad (2019) highlight the preeminent role of marketing innovation. Harnessing the power of online platforms like Facebook, WhatsApp, and Instagram to create innovative marketing strategies and cater to evolving consumer demands can significantly expand market reach and drive success for these businesses.

In conclusion, prioritising customer satisfaction, embracing an entrepreneurial spirit, focusing on calculated risk-taking, and actively building strong innovation capabilities, particularly in marketing, are the key drivers of success for West Bengal's handicraft MSMEs. By diligently focusing on these aspects, these businesses can navigate the dynamic marketplace, achieve sustainable growth, and continue to enrich the region's vibrant handicraft tradition.

CONCLUSION:

An analysis of handicraft-based MSMEs in West Bengal reveals several key insights. Customer focus takes centre stage, driving the formation of business environment variables. Risk-taking is the core element defining entrepreneurial orientation, while marketing innovation is the surest indicator of developing overall innovation capabilities. Importantly, MSMEs across different districts are actively forging partnerships with suppliers, showcasing a proactive approach to uncovering market opportunities and introducing new products in unexplored territories. However, a pressing need to strengthen technological innovation remains. This comprehensive overview highlights the strengths and improvement areas within these vibrant enterprises.

CONFLICT OF INTEREST:

The author has no conflicts of interest to declare.

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Received on 06.01.2024 Modified on 02.02.2024

Asian Journal of Management. 2024;15(2):93-98.

DOI: 10.52711/2321-5763.2024.00016