Outline the causes of industrial sickness.

Causes of Industrial Sickness

When we talk about industrial sickness, it is not caused by a single factor, rather the collective impact of multiple factors results in industrial sickness. The factors causing industrial sickness are classified into two groups – Internal Causes and External Causes, which are discussed below:

Internal Causes

The causes which are under the control of the enterprise, are regarded as internal causes. It may be a result of some internal insufficiency or shortcoming, in different areas of business. Some of these causes are listed below:

Technical feasibility

Inadequate Technical Knowhow

Inappropriate choice of technology

Obsolete production process

Poor information system

Wrong or defective idea of industry

Economic Viability

High cost of inputs

High break-even point

Excessive investment in fixed assets

Non-flexibility of fixed assets

Underestimation of financial requirements.

Production Management

Underutilization of production capacity

Huge wastage of raw materials and supplies

Poor maintenance and replacement of plant and machinery

Wrong location or layout

Poor quality maintenance

Labour Management

Poor performance and productivity of labour

Huge workforce, than required.

Lack of skilled labour

Unreasonably high wage structure.

Poor handling of labour

Inadequate training

Marketing Management

Lack of market research and feedback

Unsound pricing policy

Inappropriate product mix

Improper demand forecast

Small customer base

Poor marketing strategies

Absence of horizontal and vertical integration

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