Cite-Write Started The Discussion:LOCATION THEORIES FOR INDUSTRIAL SET UP
Weber an expert consultant, classified location factors into two broad categories—primary and secondary. Materials and labor constitute primary factors that contribute to dispersal of industries over different regions. Industrial units are material oriented , if their cost of transportation to units is higher .Industrial plants are market-oriented when the cost of transportation finished goods to markets is higher .Another primary factor is labor .Weber assumes that centers flush with cheap and skilled labor pull industries towards themselves.
Banking credit, insurance, communication and rent and rates constitute the secondary factors of location .Some of these attract industries to certain areas from different places and some other4s contribute to their dispersal from original places. The latter are called the degglomerating factors and the former the agglomerating factors.
Though Weber told his theory in 1909, its relevance has not diminished over the years We do have companies today with market or materials orientation.
Andreas Predohl another expert also told something on location He only told that a plant will be relocated because the new location offers added advantages .He does not tell why new industries are located at particular places.
FREEDOM OF LOCATION
An entrepreneur seeking location for his enterprise has greater freedom than in the past .How difficult the task of selecting the location in the past was is better explained by narrating the ordeal that was gone through by the founders of the great Tata Iron & Steel Company (TISCO) .The site ( present Jamshedpur) was selected after extensive geological survey which established the existence of coal, iron, ore and other minerals. The site selected was at the confluence of small rivers amidst thick jungle. Between the two rivers, a city had to be planned As the jungles were cleared , in place of towering trees ,steel chimneys arose.
Though the Maharaja of Mayurbhanj had given highly favorable terms to Tatas , the local kings of the jungle were less hospitable .Tigers killed two tribal laborers .An elephant driven frantic by the din of dam construction stampeded over a number of huts and flattened them.( One night a she-bear crawled into the hut of the Railways Superintendent and delivered a cub under his table)Erecting a plant of this nature in the wilderness was called by contemporaries a titanic enterprise. Communication were slow , machinery was hauled over vast distances from homes or abroad ; labor had to be trained.
That was at the beginning of the present century. Now we are at the end of the century The passage of time has made site selection easier for contemporary businessmen , thanks to certain specific developments that have taken place over a period of nine decades. Following are the developments:
1. Improvements in transportation and communication facilities and speed of services.
2. Reduction of wages differentials between regions.
3. Mobility of workers and management.
4. Improvements in construction methods and designs for plant buildings which make less expensive to build.
5. Vigorous policy pursued by the Government to remove regional imbalances in Industrial development, thus making all regions almost equal in attraction.
6. Improvements in processing and machine designs that reduce the relative number of employees required for a given output.
7. Availability of air-conditioning equipment to counteract adverse climatic conditions for employees and processes.
8. Expansion of markets for almost all goods and services so that more enterprises are needed to meet the demands.
ERRORS IN SELECTION
Though location selection is relatively easy ,businessmen commit errors and wrong locations are selected. Interestingly ,errors in site selection seem to fall into a pattern .Some of the most common errors are:
1. Lack of thorough investigation and consideration of factors involved.
2. Personal likes and prejudices of Key executives or owners overriding impartially established facts.
3. Reluctance of key executives to move from traditional established home ground to new and better locations.
4. Moving to congested areas already or about to be over industrialized.
5. Preference for acquiring an existing structure (usually at an imagined bargain)that is improperly located or not designed for the most efficient production.
6. Choice of community with low cultural and educational standards ,so they key administration and technical personnel eventually accept employment elsewhere.
In order to avoid the errors occurring and to ensure selection of a good location, a selection committee comprising people knowledgeable on facts and factors, as well as those responsible for operating the factors should be constituted .The committee should then tour places, select two or three locations ,study their plus and minus points, and finally select one among them .It is advisable that the selection committee first selects a country, a region out of the country ,locality out of the region and the exact site out of the chosen locality .selection of the site out of locality and locality out of region and a particular region out of the country should be based on a thorough investigation into relevant factors.
26th October 2005 From India , New Delhi
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