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Divestment and 
rationalisation 
In some European countries, the state takes many decisions regarding the 
selling off or closure of businesses, especially in sensitive areas such as defence. 
Emerging industries 
Can be promoted by the Government or damaged by it. 
Entry barriers 
Government policy can discourage firms from entering an industry, by restricting 
investment or competition or by making it harder, by use of quotas and tariffs, 
for overseas firms to compete in the domestic market. 
Competition 
(a) The Government's 
purchasing decisions 
will have a strong influence on the 
strength of one firm relative to another in the market (eg armaments). 
(b) 
Regulations and controls 
in an industry will affect the growth and profits of 
the industry – eg minimum product quality standards. 
(c) As a supplier of 
infrastructure 
(eg roads), the Government is also in a 
position to influence competition in an industry. 
(d) Governments and supra-national institutions such as the EU might impose 
policies which keep an industry 
fragmented
, and prevent the concentration 
of too much market share in the hands of one or two producers. 
In some industries, governments regulate the adoption of 
new products
. This is well illustrated by the 
pharmaceuticals industry, where new drugs or medicines must in many countries undergo stringent 
testing and obtain government approval before they can be marketed. 
National and EU institutions also affect the operating activities of some organisations, for example: 

Anti-discrimination 
legislation 

Health and safety legislation 

Product safety and standardisation (especially EU standards) 

Workers' rights (eg unfair dismissal, maternity leave) 

Training and education policies (which can determine the 'standard' of recruits)