Title: Strategic change of firms in response to economic liberalisation in an emerging market economy

Authors: Sougata Ray, Alok K. Chakrabarti

Addresses: Indian Institute of Management Calcutta, Joka, Diamond Harbour Road, Kolkata – 700 104, India. ' New Jersey Institute of Technology, School of Management, University Heights, Newark, 07102 NJ, USA

Abstract: This paper presents an analysis of how policy induced changes in the institutional environment in India, a big emerging market undergoing economic liberalisation, have influenced strategic behaviour of firms. An exploratory multivariate model is empirically fitted using LISREL. Results suggest that environment was to be the most dominant exogenous factor influencing corporate strategy and performance of firms. However, firms having better environment-strategy |fit| achieved superior performance. Initial resource position seems to have limited influence on strategy and performance. The results also suggest that increased their scale of business and diversified into deregulated industries selectively but aggressively achieved superior performance.

Keywords: economic liberalisation; emerging economies; strategic change management; corporate strategy; performance; India.

DOI: 10.1504/IJSCM.2006.011099

International Journal of Strategic Change Management, 2006 Vol.1 No.1/2, pp.20 - 39

Available online: 16 Oct 2006 *

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