Researches on strategic response of firms to environmental shifts have been conducted, mostly with respect to the private corporations predominantly in the western Context. This apparent inclination of researchers for the private organizations is possibly to control for the overarching influence of the government – a sentiment nurtured by many researchers in strategic management and industrial organization economics. Firm's strategic response, when influenced by ownership pattern and national context, is likely to yield results that would be different from those reported in the literature. The present study is a firm level analysis on the strategic response, of a selected set of four state owned enterprises (SOEs), to environmental shifts post deregulation and economic liberalization of India in 1991. The samples are drawn from mutually exclusive industries and collectively they exhaust both the manufacturing and the services sectors. The strategic response process is viewed with respect to managerial decision making process, organizational slacks and intellectual capital of the firm. A emergent framework of response is presented with a set of propositions.

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