The policy of liberalisation, privatisation and globalisation of the government have come face-to-face with several challenges due to government policy changes. These challenges can be explained as follows:
(a) Increasing completion: As a result of changes in the rules of industrial licensing and entry of foreign firms, completion for Indian firms have increased especially in service industries like telecommunications, airlines, banking, insurance, etc. which were earlier in public sector.
(b) More demanding customers: customers today have become more demanding because they are well-informed. Increased completion in the market gives the customer wider choice in purchasing better quality of goods and services.
(c) Rapidly changing technological environment: Increased completion forces the firm to develop new ways to survive and grow in the market. New technologies make it possible to improve machines, process, products and services. The rapid changing technological environment creates tough challenges before smaller firms.
(d) Necessity for change: in a regulated environment of pre-1991 era’, the firms could have relatively stable policies and practices. After 1991, the market forces have become turbulent as a result of which the enterprise have to continuously modify their operations
