Interesting thoughts on why Indian Entrepreneurs have not scaled up ( in an article in businessweek by Krishnamurthy)..I have personally seen some of this aspects..I agree to all the points mentioned ..
Treating the business like a family—almost literally: this might come as a surprise to those in the developed countries, but promoters of small businesses develop an emotional attachment to everything about the business, including the people. The leadership style is patriarchal. A significant majority have not fired anyone in their business. Performance orientation is lacking and a comfort with the status-quo is palpable.
Inability to prioritize: entrepreneurs engaged in small businesses are in a perennial "fire-fighting" mode. Everything appears to be a crisis. Considerable time and effort is expended on trivial matters often at the expense of growth, creativity and innovation. Strategy is conspicuous by its absence. Not surprisingly, the business remains small.
Inability to delegate and empower: the CEOs of small businesses find it extremely hard to delegate. Even after two decades, they want to be the ones to sign a cheque even if it is for only a few dollars. They want every little detail in every domain—how many units were produced, how many were sold, how many people were absent for the day, how many phone calls were made. As a result, they lose sight of the big picture. They are unable to envision a grand future. They cannot dream big.
Aversion to risk: what we witness in small businesses can be termed "Destructive Paranoia". There is a constant dread of what might happen next. Competition seems to send a chill down the spine. Getting into uncharted territory is anathema. Obstacles or downturns, that are bound to occur in any business, are looked upon as bad omens. This kind of hyper-conservatism blocks the generation of new ideas.
The learning curve—what is that?
Entrepreneurs running small and medium enterprises fail to keep pace with change—be it technology, be it customer expectations or processes that can transform their businesses. One is astonished to see the number of entrepreneurs who feel a sense of "mission accomplished." That is a euphemism for tunnel vision—I have a house, a car, a decent bank balance, business is OK, why should I bother learning new tools, techniques, and new ways of doing?
Sure, there are external constraints as well. Finance is a major issue and interest rates are high. Again, though this problem appears to be external, it has more to do with the mindset. small and medium entrepreneurs seem to think that the only way one can obtain finance is through debt. The fact that some of the best organizations in the world are zero-debt companies comes as a surprise to them. Nearly 95% of small and medium enterprises are either proprietary firms or partnerships. Just 6% are in the corporate sector and here again, a vast majority are closely-held (not listed on any stock exchange). Equity is seen as being both risky (sharing ownership) and difficult (who will subscribe to our shares?).
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