Response of Public Sector Enterprises to Environmental Change

Environmental changes call for adaptive responses on the part of the organization. When these changes are major, sudden, and irreversible (structural changes), strategic changes that may involve changes in the characterof the organization and the assumptions held by its top management will be needed.


Electronics Corporation of India Limited (ECIL) was set up in 1966 to develop indigenous know-how and effect import substitution in electronics. It had a Chief Executive highly committed to these objectives. In 1976-78 the Government liberalized its imports policies for computers and licensed competitors to manufacture computers. ECIL's response was mainly to attempt to influence the policies to nullify the effect of these changes. It did not initiate any strategic changes in computers (business), nor ws there any significant cahnges in the overall strategies of the corporation.

This exploratory study came out with some tentative hypotheses. Two of them are

1. Public enterprises whose objectives are based on values and whose top management is deeply committed to these values may have difficulties in appreciating the need for strategic change if it implies changes in these values. Thus commitment to values can be a barrier to strategic changes.

2. Change in leadership can bring about a different appreciation of the environment and hence a strategic change.


IIM Ahmedabad Fellowship Dissertation

ECIL: A Case Study of Environmental Change and Organizational Response in the Public Sector

S. Manikutty (1987)

a compendium of Dissertation Abstracts of the Fellow Programme in Management, IIM Ahmedabad, Macmilllan India Limited, Delhi, 1998