Briefly discuss the impact of Government policy changes on business and industry.
The policy of liberalization, privatization and globalization of the government has made a significant impact on the working of enterprises in business and industry. Following points highlights the impact of government policy changes on the business and industry.
1. Increasing competition: Changes in the rules of industrial licensing and entry of foreign firms, has increased the competition for Indian firms especially in service industries such as banking, communication, health, etc.
2. More demanding customers: Due to increase in competition, wider choices of products are available in the market. As a result, customers are becoming more chossy.
3. Rapidly changing technological Environment: The increased competition in the market forces the firms to develop new ways to survive and grow in the market. And due to this the small firms’ faces face tough challenges for transformations in processes, technology, machines and products.
4. Necessity for change: Frequent changes in the market, forces the enterprises to continuously modify their operations.
5. Need for developing human resources: The new market conditions need people with required skills and greater commitment. So, the need for developing human resources is increasing.
6. Market orientation: Earlier firms were production oriented; they produce first and then sell goods in the market. But now in the changing world production oriented technique is changed to market oriented where firms study and analyse the market first and produce goods accordingly.
7. Loss of budgetary support to the public sector: The budgetary support for financing the public sector has declined over the years. So the public sector undertakings have to realize that in order to survive, they will have to develop their own resources and be more efficient.
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