Market Orientation of Public Organizations in a Transitional Economy

This chapter covers the transformation of a market-oriented economy and the advancements in exchange efficiency and effectiveness crucial to a successful transition. A key characteristic of transition economies is that the market is only partially exploited as a mechanism for economic exchange. Thus, rather than being influenced primarily by market forces, corporate behavior may be significantly more affected by factors like government regulation and ownership structure. Excessive regulations that restrict competition and insufficient regulations of the operating mechanism of economic sectors according to market supply and demand characterize countries transitioning from a planned economy to a market economy. The old plan-driven economy left behind anticompetitive regulation that makes achieving economic growth targets difficult. Therefore, the government should play a role in encouraging healthy competition among businesses and supplement regulations to develop a market economy.