International Journal of Management Studies and Social Science Research
140
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Home industries are generally business units that are more traditional, in the sense of implementing good
organizational and management systems as is common in modern companies, but there is no clear division of
labor and bookkeeping system (Tambunan, 2002).
According to Law No.9 of 1995 on Small Businesses, home industry or small industry is an industry that has a
maximum net worth of Rp 200 million, excluding land and buildings where businesses. Annual sales result of
approximately Rp 4 billion in 1 year. It is a business itself, not a subsidiary of an individual business.
B.
Industrial Home Function
Home industries are able to expand employment and provide broad economic services to the community, can
play a role in improving the community economy and family income reduces unemployment and improves
community welfare. According to Suryana (2006), the functions of the industrial home are as follows:
1.
Strengthen the national economy through various business relatedness, such as supplier functions,
production, distributors, and marketing for the results of large industrial products. Small businesses
function as transformers between sectors that have a connection forward and backwards.
2.
Increase economic efficiency, especially in absorbing existing resources. Small businesses are very flexible
because they can absorb local labor and resources and increase human resources in order to become
resilient entrepreneurs.
3.
As a means of distributing national income, the means of equalization of effort and income, because the
amount is spread in urban and rural areas.
C.
Benefits of Home Industry
Home industry is very beneficial for the community, especially the weak economic class because most small
industry players are residents of that group. Some of the benefits of home industry are:
1.
Provide employment to residents who generally do not work as a whole.
2.
Provide additional income not only for workers or family interests, but also other family members.
3.
Able to produce goods needed by locals and the surrounding area more efficiently and cheaper than large
industries.
In addition, home industry also has an important position in the economic sector that provides social benefits that
play an active role in the economy. Here are some other benefits of home industry for the economy:
1.
Create a broad business opportunity but with relatively cheap financing.
2.
Take a role in the increase and mobilization of domestic savings.
3.
Have a complementary position to large and medium industries.
4.
Encourage the emergence of domestic entrepreneurship while saving the country's resources.
5.
Using labor-intensive technology, it can create more job opportunities than those provided by large-scale
companies.
6.
Encourage inter-regional and intra-regional decentralization processes, as small businesses can be located
in small towns and rural areas.
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