On Competitive Impulses and Public Enterprise Performance

Enterprise Performance V V Bhatt On the basis of the case studies of successful public enterprises, it appears that one of the critical factors for their performance relates to their exposure to a competitive environment, as such an environment provides a powerful incentive as well as pressures and compulsions for effective and efficient functioning of public enterprises. The theme of this paper relates to the different ways in which it may be possible to create a competitive environment or substitutes and surrogates for competition in situations where it is not feasible to have competition in the conventional sense. Section I is concerned with how to create a competitive environment for public enterprises in the field of traded goods and services (mostly relating to agricultural, industrial and financial enterprises). Section II deals with the generation of competitive impulses through surrogates or substitutes for competition in the field of non-traded goods and services (mostly relating to enterprises in the field of socio-economic infrastructure like transport and communications, power and such other public utilities). Competitive impulses cannot have the desired result unless management is sensitive and responsive to such impulses; this theme of management culture is taken up in Section III. The concluding section makes some observations relating to the nature and characteristics of development strategy that is most effective in generating competitive impulses.