Case Study: Diagnostic Intervention in Kota

This case study is based on the diagnostic intervention used in kota-clusters.

I. Introduction

A distinctive handwoven fabric produced in the Kota region of Rajasthan is Kota-doria. It was
Established around 1264 A.D. The Kota-Doria fabric produced in the region has a distinctive
square-check, which is made through a weaving process of differential beating of silk and cotton
yarns. This weaving tradition originated in Mysore, and hence sarees made using this technique
were called Masuria. The weavers were brought to Kota, in the late 17th and early 18th century
and the saris came to be known as Kota-Masuria. Kota sarees are still referred to as Kota-
Masuria in Kota and as Kota-Doria outside the state. Doria translates into “thread”. Kota Doria is
made in many villages located in Kota.

Cluster/Network Approach of UNIDO

“The term ‘Cluster’ indicates a sectoral and geographical concentration of enterprises which
produce and sell a range of common or complementary products and are, thus, faced with
common challenges and opportunities. The term ‘Network’ refers to a group of firms that
cooperate on a joint development project – complementing each other and specializing in order
to overcome common problems, achieve collective efficiencies and conquer markets beyond
their individual reach. Largely based on the success of industrial clusters in Italy, the cluster
approach seeks to identify the causes of underperformance in existing production clusters and
undertake a comprehensive intervention that raises the competitiveness of the cluster as a whole.
Cluster Development Approach (CDA) focuses on building the competitiveness of industrial
and artisanal clusters by working with Small and Medium Enterprises (SMEs) in such clusters
and helping to build their competitiveness.

The problem faced are as follows:

• Production and marketing – Due to small production quantities, lack of common standards,
and inability to supply products in a timely manner, SMEs are unable to capture market
opportunities
• Higher price for inputs – Due to individual purchasing of raw materials, SMEs are unable to
take advantage of economies of scale in purchasing and pay a higher price for such inputs

• Inability to invest in and internalize necessary production, quality control and marketing
systems – Due to their small size, SMEs are unable to invest adequately in and to implement
internal systems such as market intelligence, training, quality control, technology innovation and
production logistics

Lack of ‘social capital’ – Due to the atmosphere of intense competition to preserve narrow
profit margins, Conducting a Diagnostic Study

Based on these constraints, UNIDO has developed a stakeholders model of intervention in

clusters. As illustrate in Figure 1, :

(i) identifies an appropriate cluster for intervention;

(ii) conducts a participative, Diagnostic Study identifying key issues, constraints, action
through stakeholders;
(iii) establishes trust with the key comprehensive associations interventions stakeholders in
the cluster by placing a Cluster based on the Development Agent (CDA) to interact
with them on a Action Plan Creating linkages to required markets, technical sustained
basis;
(iv) Creates an Action Plan for and business inputs interventions in the cluster in
consensus with key stakeholders;
(v) Implements, also in collaboration with key stakeholders, activities as per the Action Plan;
(vi) monitors impact of interventions through tracking quantifiable variables such as total
production; and
(vii) prepares an exit plan to sustain improvements in the cluster after UNIDO formally
stops working in the cluster. The entire intervention is completed in a three-year
period. SMEs are unable to develop and implement innovative identifying key in their
activities,
Pre-Intervention Status of Kota Cluster

The Kota handloom production cluster has experienced a marked decline over the past three
decades. It is estimated that the number of weavers in the area fell from approximately 10,000 in
1970 to only 2,500 in 2002. In 2002, when UNIDO started exploring work in the cluster, they
found that village Kaithun had weavers who produced patterned fabric and the other villages
mostly produced plain handloom fabric that was sometimes sent for further embellishments such
as block printing. The growth of powerlooms impacted weavers in the smaller villages
disproportionately due to their dependence on plain handloom fabrics and their reduced capacity
to innovate which was, in turn, due to their lower connectivity with the outside world. There was
also a very low level of ‘social capital’ with the weavers in the cluster being suspicious of any
institutionalized collaborative efforts due to their past experience with cooperatives. The level of
mutual trust was also very low even though almost all the weavers belong to the same “Ansari”
Muslim community.

The Diagnostic Study conducted by UNIDO found the following:

• The cooperatives in the area were defunct. Discussions with the weavers suggested that this
was due to poor management as well as nepotism and corruption within the cooperatives.
Support institutions such as the cluster office of the National Handloom Development
Corporation (NHDC) had also closed down and were not providing any assistance to weavers.

• Weavers were largely disorganized. Although there were two existing associations in the
cluster – the Master-Weavers Association and the Weavers Association, registered as a Trade
Union - they were set up primarily for wage negotiations and had no sector-wide development
agenda. The Master-Weavers Association became active once in a while when there was a crisis
created by the Weavers Association.

• There were no weavers operating independently; they were all associated with master-weavers.
There were 2-3 master weavers commanding 200-250 looms; and an additional 42-45 smaller
weavers commanding anywhere between 6-35 looms.

• Master-weavers themselves started out as sub-contractors of the traders dealing in handloom

cloth located in Kota. Many of the masterweavers were encouraged to set up operations on their
own by the traders as part of a larger strategy of under-cutting other master-weavers and
depressing profit margins. The master-weavers were still dependent on the traders in Kota to get
payments for products supplied on a weekly basis so that they could pay wages to the weavers.
However, traders often did not pay on a weekly basis as their transactions were longer-term.
There was no significant local market for Kota sarees within the cities themselves; they were
traded to other areas through India. Traders took three-four months to receive payments from
their institutional customers especially when they were selling to retailers in more distant cities
such as Madras. UNIDO found that this cycle was creating working capital and liquidity
constraints that affected both master-weavers and regular weavers, and depressed production in
the cluster.

• Master-weavers and weavers had no institutionalized access to credit. Since many of them were
defaulters of prior loans, they were afraid to even approach banks in the area.

• The quality of yarn dyeing was very low which, in turn, led to poor finished product quality.
The dying process being used was processing steps inefficient and incorrect and also faulty
equipment and direct dyes, were being used.. Additionally, large orders could not be fulfilled
because the colors across different batches of yarn could not be Creating design graphs, for both
matched adequately.

• There were approximately 1,500 looms in village Kaithun. The total output of these looms was
approximated at 82,000 saris per annum. However this figure is based on the assumption that the
existing looms were working at full capacity – all 1,500 looms working 200 days in a year with a
preparation time of 50 days. The total value of production was estimated at Rs. 33 million (Rs.
330 lakhs), based on an average cost per sari of approximately Rs. 400.
“Revive the rich cultural heritage of the cluster by offering its unique high value-added fabric to
exporters, niche retail stores, etc. and create consumer awareness of its products . . .” – from
UNIDO’s Vision Statement for the Kota Cluster. UNIDO began its work in Kota cluster in
August 2002. After conducting the Diagnostic study, a range of stakeholders involved in the
production of handlooms were identified. Based on its cluster development model, UNIDO
undertook the following interventions to initiate “joint action” to tackle problems in the cluster:

i) Building trust :- – UNIDO started its intervention by attempting to build trust, both between
the different stakeholders within the cluster; and between the cluster actors and UNIDO itself.
Various informal public meetings were held to bring together all the cluster-actors and discuss
issues on a common platform. Through such meetings, UNIDO identified the master-weavers as
the focal point through which the problems of the cluster could be tackled. women weavers
themselves took the initiative to come forward and requested UNIDO to start working with them
as well. They are now functioning as a collective, coordinating production and starting to go to
fairs and exhibitions to sell their products.

ii ) Providing exposure to new ideas :- As part of trust-building efforts, UNIDO took the

master-weaver groups to various other locations to expose them to the dynamics of successful
clusters and to best-practices in handloom production and marketing. These exposure visits also
provided an opportunity for the weavers to gain exposure to market realities and see different
approaches that weavers in other areas were taking to working together.

iii) Creating linkages to appropriate resources to address key constraints – Based on the

problems identified in the Diagnostic Report, UNIDO undertook a range of interventions aimed
at bringing about improvements in productivity and in marketing. UNIDO, through the cluster
Development Agent (CDA), worked on identifying resources that could be used to tackle
specific problems, connecting the cluster actors to such resources and undertaking capacity-
building activities such as training. The emphasis was on building the capacity of the weavers.
UNIDO focused on creating linkages and piloting specific activities. Once the pilot activity was
done, the cluster actors were expected to start sustaining these new activities on their own.

iv) Product quality improvements - UNIDO organized a number of dying workshops to

explore how the quality of dying could be improved. The dyers were organized into a group to
make joint purchases of dyes and they were linked directly to the distributor. This helped both to
cut down on spurious dyes and to cut down the cost of dyes. The dyers group is now functioning
independently, without continuing support from UNIDO. UNIDO also worked on diversifying
design and product ranges.

v) Improving Productivity – UNIDO explored the introduction of various technologies to

improve productivity, especially in pre-weaving activities.
vi) Marketing – UNIDO also explored linking them to boutique retail outlets in various cities.
Since the weavers were not ready to start innovating on their own and then taking the products to
the market, UNIDO identified and approached boutique retail outlets in Jaipur, Calcutta and
Madras and negotiated with them to conduct exhibitions of products from Kota.

vii) Promoting a Cluster Brand through Geographical Indicators (GI) – One of the main
problems articulated by weavers was the competition from powerloom fabric, especially when
such fabric was misrepresented in the market as original handloom cloth from Kota. In
discussions with weavers, they were interested in exploring some form of legal protection against
such misrepresentation. UNIDO brought up the idea of applying a Geographical Indicator (GI) to
the cluster to protect the cluster brand. Master-weavers and weavers were invited onto a common
platform to explain the concept of GI and to initiate steps to register such a GI. Currently, the GI
is being implemented in the cluster with the extended application process being underway; a logo
being developed; and a cluster-association being formed to manage the licensing of GI to
individual weavers within the cluster.

viii) Organizing a Cluster Association – To implement the GI, a cluster-wide association was
needed to manage it and to ensure that it was given only to legitimate weavers within the cluster.
UNIDO worked on promoting a cluster-wide association representing all the different
stakeholders. It organized a meeting where all the stakeholders from the three villages – Kaithun,
Kotsuwan and Mangrol - were invited. Each village was asked to select a village
representativewho could come and represent their village in the meeting to discuss GI further and
take up its implementation. A formal association, the Kota Doria Hadauti Foundation (KDHF)
was registered. KDHF was structured as an umbrella organization for the cluster with everyone
who was involved in the weaving process – including weavers, dyers, warpers, and sizers – being
proportionately represented.

IV. UNIDO’s Intervention in Kota Cluster

Revive the rich cultural heritage of the cluster by offering its unique high value-added fabric to
exporters, niche retail stores, etc. and create consumer awareness of its products . . .” – from
UNIDO’s Vision

V. Impact of Intervention
UNIDO’s budget for the entire intervention was only $21,000 (Rs. 9,45,000), of which donor
support constituted 45%, funds from existing schemes from government and other support
institutions 30% and contributions from the cluster actors 25%. Although the full impact of the
intervention will be known only over a longer period, there have been measurable improvements
along many fronts. These include:

• Improvement in quality of dying and a functioning, independent collective of dyers set up in

the cluster

• Cluster actors exposed to and linked with various support institutions and service-providers
such as dying technicians, for example - that they can draw upon independently in the long run.

• New designs and products introduced in the cluster

• Formation of a functioning women weavers group that is undertaking innovations in design and
products, as well as traveling to exhibitions and fairs to sell their products.

• Functioning cluster association, KDHF, set up. KDHF also serves as a common

platform for all the actors in the cluster to discuss issues.

• Master-weavers linked with new retail outlets. New marketing channels targeting a different
market segment from the one for traditional Kota sarees being formed.

• Total Sales for 300 selected weavers increased by 15% from Rs. 1 crore to 1.37 crores in first
two years4 4 Measured from a sample of 300 weavers in the cluster In the context of the
relatively short time-frame and low costs involved, the intervention by UNIDO has produced
significant changes in the dynamics of the cluster. According to UNIDO staff, the main
challenges they faced were: (a) the short time-frame of three years for the entire intervention;
and (b) the shortage of existing support institutions. According to UNIDO staff, even when
government support institutions are operational in an area, “ . . . they are not geared toward
providing the services that are required.”

Lessons from the UNIDO’s Approach for the Handloom Sector

UNIDO’s used diagonostic interventions in the Kota cluster offers some important lessons for
proposed intervention in the handloom sector. These include:

• Engaging multiple actors involved in the production of handlooms – The intervention in

Kota demonstrates the importance of engaging with multiple actors that affect the production of
handlooms instead of focusing only on weavers. In Kota, the most pressing problem affecting the
quality of the finished handloom product was the quality of dyeing. In addition, the intervention
shows that working with support-activities such as warping and sizing, and the laborers who are
responsible for such activities – whether family or non-family – may be necessary to bring in
productivity increases into the entire production process.

• Undertaking extensive social intermediation – The intervention in Kota highlights the

complex social dynamics within handloom production clusters. The status of weavers as
marginal producers who are constantly in competition with each other does not foster the mutual
trust required to undertake collective action. UNIDO conducted extensive social intermediation
activities, bringing people onto the same platform, encouraging discussion and encouraging
small confidence-building-measures that helped to create an atmosphere more conducive to
“competitive-collaboration”: competition that helps to promote the cluster as a whole rather than
simply undercutting rivals. This social intermediation aspect has implications for the scaling up
of interventions in the handlooms sector

• Focusing on sustainability – Due to its short time-frame, the diagonostic approach followed
by UNIDO in Kota stressed the sustainability of the intervention from the beginning.
Sustainability was enhanced by promoting the idea of joint-contributions where it was made
clear at the outset that this was a time-bound intervention and the weavers were expected to
create sustainable processes to carry on these improvements.

• Building sector-wide brand equity for handlooms – UNIDO's intervention in Kota highlights
the importance of building collective brands in the sector. Building metabrands is a critical first
step in enabling handlooms to take advantage of new market opportunities. Increasingly, the lack
of investment in brand development is leading to a negative association in consumers’ minds,
with many consumers, especially the young, associating machine-made fabrics with being
‘modern’ and handlooms as being lower-quality products. A combination of Geographical
Indicators and Certification Trademarks can be used to help build brands for handlooms.
What is Organizational Development ?

Organization development (OD) is a planned, top-down, organization-wide effort to increase the

organization's effectiveness and health. OD is achieved through interventions in the
organization's "processes," using behavioural science knowledge. OD is a long term effort, led
and supported by top management , to improve an organization’s visioning, empowerment,
learning, and problem –solving processes, through an ongoing , collaborative management of
organization culture- with special emphasis on the culture of intact work teams and other team
configurations-using the consultant facilitator role and the theory & technology of applied
behavioral science, including action research.

What is OD Intervention ?

OD Interventions :Definition

OD interventions are set of structured activities in which selected organizational units (target
groups or individuals) engage in a task or a sequence of tasks with the goals of organizational
improvement and individual development. This are the methods created by OD professionals and
others. Single organization or consultant cannot use all the interventions. They use these
interventions depending upon the need or requirement of the organization.

Goals of OD Intervention

 Identify and practice the elements of a good client-consultant relationship.

 Understand a range of OD interventions with in-depth knowledge of one intervention at
the individual, group, and organization level.
 Develop skill in the application of specific interventions.
 Design effective intervention strategies that effectively address the client’s diagnosed
goals and needs.

Understand and develop effective responses for dealing with the social-emotional aspects of the
change process.
Classification of OD Interventions

1. Diagonostic Activities : Fact-finding activities designed to ascertain the state of the

system, the status of a problem, the "way things are." Available methods range from projective
devices such as build a collage that represents your place in this organization to the more
traditional data collection methods of interviews, questionnaires, surveys, and meetings.
2. Team-Building Activities : Activities designed to enhance the effective operation of
system teams. They may relate to task issues, such as the way things are done, the needed skills
to accomplish tasks, the resource allocations necessary for task accomplishments; or they may
relate to the nature and quality of the relationships between the team members or between
members and the leader. Again, a wide range of activities is possible. In addition, consideration
is given to the different kinds of teams that may exist in the organization, such as formal work
teams, temporary task force teams, newly constituted teams, and cross-functional teams.
3. Intergroup Activities : Activities designed to improve effectiveness of interdependent
groups. They focus on joint activities and the output of the groups considered as a single system
rather than as two subsystems. When two groups are involved, the activities are generally
designated intergroup or interface activities; when more than two groups are involved, the
activities are often called organizational mirroring.
4. Team Building Intervention : This intervention is a set of activities, which are
designed to enhance the effective operation of system teams. These can focus on task-related
issues such as the way things are done, necessary skills and resources, relationship quality
between team members and between team and leader, and effectiveness. In addition, structural
issues are also addressed.
5. Survey Feedback Activities : Related to and similar to the diagnostic activities
mentioned in that they are a large component of those activities. However, they are important
enough in their own right to be considered separately. These activities center on actively working
the data produced by a survey and designing action plans based on the survey data.
6. Education and Training Activities : Activities designed to improve skills, abilities, and
knowledge of individuals. There are several activities available and several approaches possible.
For example, the individual can be educated in isolation from his or her own work group (say, in
a T-group comprised of strangers), or one can be educated in relation to the work group (say,
when a work team learns how better to manage interpersonal conflict). The activities may be
directed toward technical skills required for effective task performance or may be directed
toward improving interpersonal competence. The activities may be directed toward leadership
issues, responsibilities and functions of group members, decision making, problem solving, goal
setting and planning.
7. Structural Activities : Activities designed to improve the effectiveness of the technical
or structural inputs and constraints affecting individuals or groups. The activities may take the
form of (a) experimenting with new organization structures and evaluating their effectiveness in
terms of specific goals or (b) devising new ways to bring technical resources to bear on
problems.
8. Process Consultation Activities : Activities on the part of the consultant that help the
client to perceive, understand, and act upon process events which occur in the client's
environment. These activities perhaps more accurately describe an approach, a consulting mode
in which the client is given insight into the human processes in organizations and taught skills in
diagnosing and managing them. Primary emphasis is on processes such as communications,
leader and member roles in groups, problem solving and decision making, group norms and
group growth, leadership and authority, and intergroup cooperation and competition.
9. Coaching and Counseling Activities : Activities that entail the consultant or other
organization members working with individuals to help them (a) define learning goals, (b) learn
how others see their behavior, and (c) learn new modes of behavior to see if these help them to
achieve their goals better. A central feature of this activity is the non-evaluative feedback given
by others to an individual. A second feature is the joint exploration of alternative behaviors.
10. Planning and Goal-Setting Activities : Activities that include theory and experience in
planning and goal setting, utilizing problem-solving models, planning paradigms, ideal
organization versus real organization "discrepancy'' models, and the like. The goal of all of them
is to improve these skills at the levels of the individual, group, and total organization.
11. Strategic Management Activities : Activities that help key policy makers reflect
systematically on their organization's basic mission and goals and environmental demands,
threats, and opportunities and engage in long-range action planning of both a reactive and
proactive nature. These activities direct attention in two important directions: outside the
organization to a consideration of the environment, and away from the present to the future.
12. Organizational Transformation Activities : Activities that involve large scale system
changes; activities designed to fundamental change the nature of the organization. Almost
everything about the organization is changed- structure, management philosophy, reward system,
mission, values and culture.
13. Life- and career planning Activities : Activities that enables individuals to focus on
their life and career objective and how to go about achieving them.
14. Grid Organization Development Activities : It constitute a six-phase change most of
the programs which may take from three to five years to complete. The model starts with
upgrading individual managers’ skills and leadership abilities. Later phase include corporative
planning for improvement, developing implementation tactics and finally and evaluation phase.

Summary of the Case :

Diagonostic Intervention in Kota-cluster.

A distinctive handwoven fabric produced in the Kota region of Rajasthan is Kota-doria. The
Kota-Doria fabric produced in the region has a distinctive square-check, which is made through
a weaving process of differential beating of silk and cotton yarns. Doria translates into “thread”.
Kota Doria is made in many villages located in Kota. The term ‘Cluster’ indicates a sectoral and
geographical concentration of enterprises which produce and sell a range of common or
complementary products and are, thus, faced with common challenges and opportunities. The
kota clusters face various problems like production, marketing, lack of social capital, lack of
training, lack of use of new technology, lack of new ideas etc.. all this problem used to hinder the
promoting of economic growth and providing employment to the small and medium enterprise.

Before introduction of intervention the Kota handloom production cluster has experienced a
marked decline over the past three decades. It is estimated that the number of weavers in the area
fell from approximately 10,000 in 1970 to only 2,500 in 2002. In 2002, when UNIDO started
exploring work in the cluster, they found that village Kaithun had weavers who produced
patterned fabric and the other villages mostly produced plain handloom fabric that was
sometimes sent for further embellishments such as block printing. The growth of powerlooms
impacted weavers in the smaller villages disproportionately due to their dependence on plain
handloom fabrics and their reduced capacity to innovate which was, in turn, due to their lower
connectivity with the outside world. There was also a very low level of ‘social capital’ with the
weavers in the cluster. The Diagnostic Study conducted by UNIDO to identify the main
problems and limitation faced by the weavers. “Revive the rich cultural heritage of the cluster by
offering its unique high value-added fabric to exporters, niche retail stores, etc. and create
consumer awareness of its products . . .” – from UNIDO’s Vision Statement for the Kota Cluster.

UNIDO began its work in Kota cluster in August 2002. After conducting the Diagnostic study, a
range of stakeholders involved in the production of handlooms were identified. Based on its
cluster development model. To initiate “joint action” to tackle problems in the cluster, UNIDO
undertook the interventions like building trust, Providing exposure to new ideas, Creating
linkages to appropriate resources to address key constraints, Product quality improvements,
Improving Productivity etc

Impact of Intervention

• Improvement in quality of dying and a functioning, independent collective of dyers

set up in the cluster

• Cluster actors exposed to and linked with various support institutions and service providers –
such as dying technicians, for example - that they can draw upon independently in the long run.

• New designs and products introduced in the cluster

• Formation of a functioning women weavers group that is undertaking innovations in design and
products, as well as traveling to exhibitions and fairs to sell their products.

• Functioning cluster association, KDHF, set up. KDHF also serves as a common platform for all
the actors in the cluster to discuss issues.

• Master-weavers linked with new retail outlets. New marketing channels targeting a different
market segment from the one for traditional Kota sarees being formed.
• Total Sales for 300 selected weavers increased by 15% from Rs. 1 crore to 1.37 crores in first
two years.

The OD Intervention used in the case :

The OD intervention used in the case is Diagnostic activities. In diagnostic intervention fact
finding activities are designed to ascertain the state of system, the status of problem in an
organization. Available methods range from projective devices such as build a collage that
represents your place in this organization to the more traditional data collection methods of
interviews, questionnaires, surveys, and meetings.

A distinctive hand-woven fabric produced in the Kota region of Rajasthan is Kota-Doria . Doria
translates into “thread”. The Kota-Doria fabric produced in the region has a distinctive square
check, which is made through a weaving process of differential beating of silk and cotton yarns.
Kota Doria is made in many villages located in Kota. The Cluster Approach is used by
UNIDO.“The term ‘Cluster’ indicates a group of sectoral and geographical concentration of
enterprises which produce and sell a range of common or complementary products and are,
thus, faced with common challenges and opportunities. Cluster Development Approach (CDA)
focuses on building the competitiveness of industrial and artisanal clusters by working with
Small and Medium Enterprises (SMEs) in such clusters and helping to build their
competitiveness. The kota clusters face various problems like production, marketing, lack of
social capital, lack of training, lack of use of new technology etc.. all this problem used to hinder
the promoting of economic growth and providing employment to the small and medium
enterprise. So using the diagnostic intervention -fact finding activities- the problem faced by kota
weavers is identified. The diagnostic intervention was carried out to to study the various
problems faced by small and medium enterprise in kota. Methods range used in this organization
to the more traditional data collection methods of interviews, surveys, and meetings.

How the diagnostic intervention is used in the case ?

Diagnostic intervention is used in the case to study the various problems and limitation faced by
weaver in small and medium enterprise in villages at Kota. In this more traditional data
collection methods are used like interview, survey, meeting and examining organizational
records. A group weavers of sectoral and geographical concentration of enterprises in kota, use
to produce and sell a range of common products and are thus, faced with common challenges
and opportunities. The kota clusters face various problems like production, marketing, lack of
social capital, lack of training, lack of use of new technology etc.. all this problem used to hinder
the promoting of economic growth and providing employment to the small and medium
enterprise.

Pre-Intervention Status of Kota Cluster

The Kota handloom production cluster has experienced a marked decline over the past three
decades. It is estimated that the number of weavers in the area fell from approximately 10,000 in
1970 to only 2,500 in 2002. In 2002, when UNIDO started exploring work in the cluster, they
found that village Kaithun had weavers who produced patterned fabric and the other villages
mostly produced plain handloom fabric that was sometimes sent for further embellishments such
as block printing. The growth of powerlooms impacted weavers in the smaller villages
disproportionately due to their dependence on plain handloom fabrics and their reduced capacity
to innovate which was, in turn, due to their lower connectivity with the outside world. There was
also a very low level of ‘social capital’ with the weavers in the cluster being suspicious of any
institutionalized collaborative efforts due to their past experience with cooperatives. The level of
mutual trust was also very low even though almost all the weavers belong to the same “Ansari”
Muslim community.

The Diagnostic Study conducted and found the following:

• The cooperatives in the area were defunct. Discussions with the weavers suggested that this
was due to poor management as well as nepotism and corruption within the cooperatives.
Support institutions such as the cluster office of the National Handloom Development
Corporation (NHDC) had also closed down and were not providing any assistance to weavers.

• Weavers were largely disorganized. Although there were two existing associations in the
cluster – the Master-Weavers Association and the Weavers Association, registered as a Trade
Union - they were set up primarily for wage negotiations and had no sector-wide development
agenda. The Master-Weavers Association became active once in a while when there was a crisis
created by the Weavers Association.

• There were no weavers operating independently; they were all associated with master-weavers.
• Master-weavers themselves started out as sub-contractors of the traders dealing in handloom
cloth located in Kota. Many of the masterweavers were encouraged to set up operations on their
own by the traders as part of a larger strategy of under-cutting other master-weavers and
depressing profit margins. The master-weavers were still dependent on the traders in Kota to get
payments for products supplied on a weekly basis so that they could pay wages to the weavers.
However, traders often did not pay on a weekly basis as their transactions were longer-term.
There was no significant local market for Kota sarees within the cities themselves; they were
traded to other areas through India. Traders took three-four months to receive payments from
their institutional customers especially when they were selling to retailers in more distant cities
such as Madras. UNIDO found that this cycle was creating working capital and liquidity
constraints that affected both master-weavers and regular weavers, and depressed production in
the cluster.

• Master-weavers and weavers had no institutionalized access to credit. Since many of them were
defaulters of prior loans, they were afraid to even approach banks in the area.
• The quality of yarn dyeing was very low which, in turn, led to poor finished product quality.
The dying process being used was processing steps inefficient and incorrect and also faulty
equipment and direct dyes, were being used.. Additionally, large orders could not be fulfilled
because the colors across different batches of yarn could not be Creating design graphs, for both
matched adequately. UNIDO began its work in Kota cluster in August 2002. After conducting
the Diagnostic study, a range of stakeholders involved in the production of handlooms were
identified. Based on its cluster development model, UNIDO undertook the following
interventions to initiate “joint action” to tackle problems in the cluster:

i) Building trust :- – UNIDO started its intervention by attempting to build trust, both between
the different stakeholders within the cluster; and between the cluster actors and UNIDO itself.
Various informal public meetings were held to bring together all the cluster-actors and discuss
issues on a common platform. Through such meetings, UNIDO identified the master-weavers as
the focal point through which the problems of the cluster could be tackled. women weavers
themselves took the initiative to come forward and requested UNIDO to start working with them
as well. They are now functioning as a collective, coordinating production and starting to go to
fairs and exhibitions to sell their products.

ii ) Providing exposure to new ideas :- As part of trust-building efforts, UNIDO took the

master-weaver groups to various other locations to expose them to the dynamics of successful
clusters and to best-practices in handloom production and marketing. These exposure visits also
provided an opportunity for the weavers to gain exposure to market realities and see different
approaches that weavers in other areas were taking to working together.

iii) Creating linkages to appropriate resources to address key constraints – Based on the

problems identified in the Diagnostic Report, UNIDO undertook a range of interventions aimed
at bringing about improvements in productivity and in marketing. UNIDO, through the cluster
Development Agent (CDA), worked on identifying resources that could be used to tackle
specific problems, connecting the cluster actors to such resources and undertaking capacity-
building activities such as training. The emphasis was on building the capacity of the weavers.
UNIDO focused on creating linkages and piloting specific activities. Once the pilot activity was
done, the cluster actors were expected to start sustaining these new activities on their own.

iv) Product quality improvements - UNIDO organized a number of dying workshops to

explore how the quality of dying could be improved. The dyers were organized into a group to
make joint purchases of dyes and they were linked directly to the distributor. This helped both to
cut down on spurious dyes and to cut down the cost of dyes. The dyers group is now functioning
independently, without continuing support from UNIDO. UNIDO also worked on diversifying
design and product ranges.

v) Improving Productivity – UNIDO explored the introduction of various technologies to

improve productivity, especially in pre-weaving activities.
vi) Marketing – UNIDO also explored linking them to boutique retail outlets in various cities.
Since the weavers were not ready to start innovating on their own and then taking the products to
the market, UNIDO identified and approached boutique retail outlets in Jaipur, Calcutta and
Madras and negotiated with them to conduct exhibitions of products from Kota.

vii) Promoting a Cluster Brand through Geographical Indicators (GI) – One of the main
problems articulated by weavers was the competition from powerloom fabric, especially when
such fabric was misrepresented in the market as original handloom cloth from Kota. In
discussions with weavers, they were interested in exploring some form of legal protection against
such misrepresentation. UNIDO brought up the idea of applying a Geographical Indicator (GI) to
the cluster to protect the cluster brand. Master-weavers and weavers were invited onto a common
platform to explain the concept of GI and to initiate steps to register such a GI.

viii) Organizing a Cluster Association – To implement the GI, a cluster-wide association was
needed to manage it and to ensure that it was given only to legitimate weavers within the cluster.
UNIDO worked on promoting a cluster-wide association representing all the different
stakeholders. It organized a meeting where all the stakeholders from the three villages – Kaithun,
Kotsuwan and Mangrol - were invited. Each village was asked to select a village representative
who could come and represent their village in the meeting to discuss GI further and take up its
implementation. A formal association, the Kota Doria Hadauti Foundation (KDHF) was
registered. KDHF was structured as an umbrella organization for the cluster with everyone who
was involved in the weaving process – including weavers, dyers, warpers, and sizers – being
proportionately represented.

Result

Impact of Intervention

The diagnostic study of fact finding activities were carried out by UNIDO’s so that to study the
main problems faced by kota clusters. After identifying the problems and limitation various
measures were taken so that to rectify the problems. UNIDO’s budget for the entire intervention
was only Rs. 9,45,000. Although the full impact of the intervention will be known only over a
longer period, there have been measurable improvements along many fronts. These include:

• Improvement in quality of dying and a functioning, independent collective of dyers set up in

the cluster

• Cluster actors exposed to and linked with various support institutions and service-providers
such as dying technicians, for example - that they can draw upon independently in the long run.
• New designs and products introduced in the cluster

• Formation of a functioning women weavers group that is undertaking innovations in design and
products, as well as traveling to exhibitions and fairs to sell their products.

• Functioning cluster association which also serves as a common platform for all the actors in the
cluster to discuss issues.

• Master-weavers linked with new retail outlets. New marketing channels targeting a different
market segment from the one for traditional Kota sarees being formed.

• Total Sales for 300 selected weavers increased by 15% from Rs. 1 crore to 1.37 crores in first
two years. The intervention by UNIDO has produced significant changes in the dynamics of the
cluster.

Conclusion

In tackling the problems faced by weavers, the diagnostic approach represents a distinct model
from building primary cooperatives. In tackling the small size of production by individual
weavers and their isolation from larger extra-local markets, the cooperative approach seeks to
bring together all the weavers in an area under a single organization. The cluster development
model is a more heterogeneous one, promoting multiple bodies within the cluster and targeting
the growth of individual private businesses as a sustainable means toward increasing the ability
of the weaver to respond to market shifts and become more competitive. Poor infrastructure at
the cluster level; lack of access to adequate health and education services; and inadequate
transportation links are some of the problems that create an uneven playing field and adversely
affect the ability of handloom weavers to compete in mainstream markets. But after diagnosing
the problem, various measures were taken so that to resolve the limitation faced by the weavers.
Total Sales increased by 15% from Rs. 1 crore to 1.37 crores in first two years. The intervention
by UNIDO has produced significant changes in the dynamics of the cluster.