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How Does Red Tape Affect Small Businesses

How Does Red Tape Affect Small Businesses – The purpose of this paper is to explore the rise and consolidation of red tape and how its adverse effects on the performance of public sector organizations have undermined the economies of developing countries like Pakistan.

A structured questionnaire survey was completed by 121 respondents working in 35 government departments in Punjab, a province of Pakistan.

How Does Red Tape Affect Small Businesses

How Does Red Tape Affect Small Businesses

Findings revealed a relationship between red-tapism and employee motivation and work. When rules and regulations are crossed, employees are prevented from completing assigned tasks, ultimately reducing work commitment. This shows that the integration of red tape in public organizations not only affects the behavior and attitudes of employees, but also affects the overall performance of public sector organizations.

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The paper makes recommendations for the Government of Pakistan. For example, conducting training and motivational workshops for public sector employees can help them stay engaged with their work. Government departments should also review the steps and procedures involved to eliminate unnecessary steps and reduce red tape.

Rauf, S. (2020), “The Effects of Red Tape in Public Sector Organizations: A Study of Government Departments in Pakistan”, Public Administration and Policy: An Asia-Pacific Journal, Vol. 23 no. 3, pp. 327-338. https://doi.org/10.1108/PAP-06-2019-0013

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The rise of red tape and its integration into Pakistan’s public sector has directly and indirectly disrupted the functioning of organizations in many provinces, resulting in low productivity and profitability. Bashir’s (2011) analysis showed that the high integration of red-tapeism in institutions is the main reason for the weakness of the government sector. Red tapism has not only affected the institutions but also weakened the economy of the country. Punjab, one of the four provinces of Pakistan, suffers from excessive rules and regulations. Austerity gradually undermined the effectiveness of the state’s public sector institutions.

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Moynihan and Herd (2010) focused on the impact of red tape on organizations and how they perceive the concept. Red tape is a broad term that can be defined as procedures and regulations applied to public- and private-sector organizations that result in negative impacts. Employees are the most valuable assets of organizations, as their goals and objectives cannot be achieved without the input of employees. Many organizations recognize their employees as the wheels of the vehicle; Unless or until the wheels turn, the vehicle cannot move. Nor can it initiate a profit-making or maximization process (Moynihan and Heard, 2010).

Red-topism includes the terms, laws, regulations and procedures that the government has imposed and enforced on the public and private institutions of the country. Such policies aim to reduce fraud, delay work execution, and motivate employees to increase their work performance, thereby improving organizational effectiveness and government performance (Subramanian and Kruthika, 2012). However, weak policies and regulations in developing countries like Pakistan have failed to meet this goal. Instead, organizations in these countries suffer from delays induced by red tape because jobs are not completed on time. Programs cannot be implemented by the promised date, increasing the chances of corruption in public institutions. This creates a belief among people that government officials have to pay bribes to get their work done. Hence, public institutions are devalued by delays caused by red tape. Punjab, as a center of mass organizations, is no exception (Wahab and Jawando, 2010).

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Red-tapeism affects organizational decision-making. Such decisions fall into two main types: centralized and decentralized. Most public organizations, for example Pakistan International Airlines and the Pakistan Railway Authority, make somewhat centralized decisions because their employees have less experience, knowledge and training than private sector employees. Public sector employee performance deteriorates over time, making institutions ineffective, and centralized decision-making in particular further reduces employee empowerment. Today, many high-level executives are considering privatization of these institutions due to poor performance and dissatisfied customers (Subramaniian and Kruthika, 2012).

How Does Red Tape Affect Small Businesses

Several research studies have emphasized the job satisfaction of employees. High satisfaction reduces the turnover rate, while low satisfaction leaves employees looking for better jobs. Many components can affect job satisfaction, including work environment, salaries, organizational structure, teamwork and red-tapism. When a new employee enters a government organization with a high integration of red tape, the employee may become fatigued. Job satisfaction may decrease to the extent that the employee will consider looking for another job. This is not conducive to the success of the organization as it loses good employees (Wahab and Jawando, 2010). Thus, the prevalence of red tape plays a negative role in public organizations by affecting employees.

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One of the reasons for Pakistan’s economic decline is the excessive use of red tape in public institutions, especially in Punjab province. Red tape is an excess of laws, procedures and regulations imposed by the government, which ultimately hampers the functioning of organizations. It not only plays a negative role in the public sector but also has a profound impact on people’s job satisfaction, organizational commitment, public service motivation and work performance (Bahir, 2011).

The purpose of this research is to examine the role of red tape on public sector organizations and the economy of Punjab. The objective of this study is to create a clear understanding of the extent of red-tapism in the state of Punjab. It also contributes to identifying measures that can reduce red tape in government and make the public sector more efficient. Finally, it assesses the impact of red-tapeism on job satisfaction, organizational commitment, public service motivation and individual performance in organizations in Punjab.

Studies have examined the effects of red-tapeism on the economy and the achievement of organizations’ goals and operations by examining various variables and their relationships with each other. This section presents some of the concepts discussed by researchers and economists on the impact of red tape on public sectors in Punjab.

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Pandey etc. (2007) presented an approach to increase the efficiency of public organizations. They also identified and offered an integrated approach to removing bureaucratic red tape. The study used a questionnaire to collect data. The organizational effectiveness model was applied to public departments. Similarly, Moynihan and Pandey (2007) highlighted the impact of red tape on organizational performance. He argued that the integration of red tape into the bureaucratic system has profoundly affected the performance of organizations.

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Moon and Bretschneiber (2002) focused on identifying, understanding and developing awareness of red tape. Several barriers were identified, and the main factor was information technology barriers to innovation. Preliminary results of the study suggested that red tape can create barriers to innovation in information technology. They found that two key criteria—red tape and information technology innovation—are interrelated. The study also discovered that top managers’ (entrepreneurial leadership) risk-taking propensity and organizational capability are positively associated with information technology innovation.

DeHart-Davies and Pandey (2005) focused on how dysfunctional regulation is linked to managers and top-level staff. Wahab and Jawando (2010) collected primary data for their research for the National Public Management Research Conference. Four main hypotheses were tested and confirmed. He also suggested some solutions to avoid the issue of red tape to improve organizational and departmental performance. He said that centralized decision making process should be avoided. The study also focused on job satisfaction, which can only be improved in public organizations through a decentralized structure or structure. He further stated that a proper audit mechanism should be introduced in the organizations to effectively monitor the performance of the lower level staff.

Feeney and Rainey (2010) study red tape in public sector and non-profit organizations with a focus on institutional and political accountability. He argued that political accountability is central to improving the performance of institutions. He also discussed several issues in the public sector resulting from the absence of institutional and political accountability. The authors felt that government bureaucracies are particularly subject to administrative constraints, such as red tape and personnel regulations, which limit pay, promotion, and firing and affect performance.

How Does Red Tape Affect Small Businesses

Chowdhury and Mandal (2012) suggested that red tape plays a negative role for organizations by significantly influencing individual employee behavior. Researchers argue that behavior involves not only self-interested choices, but also normative motives. If there is a high level of red-tapeism in a country, it will affect the effective motivation of employees, thereby affecting their overall behavior and causing many problems.

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Ismail and Rashid (2014) stated that further investigations of organizational effects should assess the effects of organizational experiences and policies on the motivation of public service employees over time. Moynihan and Pandey (2007) demonstrate the impact of red tape on public and private organizations in the US. This. States of Georgia and Illinois.

This study uses data collected from primary sources through a questionnaire survey conducted in 2014. The respondents are 121 employees working in 35 different Govt.

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