The role of small-scale enterprises is significant in many countries. The flexibility to adapt to the environment is markedly pronounced in the small business as compared to large business. Hall to two thirds of business all over the world is small and medium enterprises, which have traditionally been known for the agility of their response to changing environment. 1 According to Singer “even in terms of productivity small industries (less than 100 employees) produce about 90 % of the average industrial output per person in the United States and about 85 % in the United Kingdom”. 2 Japanese businesses in the small manufacturing sector is attributed to its long term planning for structured changes and efficient allocation of resources in the economy. 3 Japan known for its unique style in management has developed an integrated system of subcontracting, whereby the small producers stand to benefit from large volumes of marked potential. United Kingdom considers the small firms are crucial to the development of the country. These firms are regarded as breeding ground for new entrepreneurial talent and new ideas with inbuilt flexibility to adapt to dynamic business environment. Over the last 20 years there has been marked increase in the number of small business in the economy of the U.K. From 1980-1993 the number of small firms grew around 8 lakh, the vast majority of registered business is small. 96 % of the firms have less than 20 employees. Firms with less than 100 employees account for 50 % of employment.