Title: A system dynamics' based study of Indian public sector units

Authors: Rajashekar G. Mench; Virupaxi Bagodi; Venkatesh A. Raikar

Addresses: Department of Industrial and Production Engineering, B.V.B. College of Engineering and Technology, Hubli 580 031, Karnataka, India ' Department of Management Studies, B.V.B. College of Engineering and Technology, Hubli 580 031, Karnataka, India ' Government Engineering College, First Floor, Government Polytechnic Campus, Karwar 581 301, Karnataka, India

Abstract: Public sector organisations in India were established after the independence to build infrastructure for economic development, generate employment and various other reasons. Since the liberalisation of the economy in 1991, the mortality rate of public sector units (PSUs) has been found to be on the rise. This dynamics has been captured using soft systems methodology. A system dynamics model representing the operational and performance dynamics of Indian PSUs in the era of transformation from the pre-globalisation through globalisation and post-globalisation periods was developed. Policy experimentation reveals that chief executive officers with strategic orientation towards research and development improve revenue generations. Furthermore, it revealed that Indian PSUs would have earned more revenues had there not been globalisation.

Keywords: CEOs; chief executive officers; system dynamics; R&D; research and development; PSUs; public sector undertakings; public sector units; India; infrastructures; economic development; employment generation; economic liberalisation; economy; soft systems methodology; operational dynamics; performance dynamics; business failure rates; pre-globalisation periods; globalisation; post-globalisation periods; policy experimentation; strategic orientation; revenue generation; business innovation.

DOI: 10.1504/IJBIR.2012.045633

International Journal of Business Innovation and Research, 2012 Vol.6 No.2, pp.135 - 148

Published online: 12 Dec 2014 *

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