Concerned by the seeming lack of accountability of government research laboratories, governments the world over have adopted fiscal control measures to make them more business-like and responsive to user needs. These have typically consisted of expecting them to generate a portion of their revenues from actual users of their services. In this study we examined the strategies adopted by five government research laboratories in India in response to a policy directive that they should generate at least one third of their budget from external sources, particularly industry. The performance of these laboratories, functioning under the aegis of the Council of Scientific & Industrial Research, was studied over an eight-year period after the policy was proposed. All the laboratories studied worked in areas where they could develop product or process technologies for use by industry. The major finding of this study was that the strategies adopted by the laboratories were influenced substantially by the founding conditions, early leadership and the resultant organizational culture of the laboratory and these appeared to play a bigger role than the structure of the industry served by the laboratory or the nature of the technology involved. The main implication of this is that control measures like external earnings targets are unlikely to achieve policy objectives if they are applied across-the-board without attention to the history, culture and competencies of individual laboratories.