{"id":11,"date":"2018-09-19T19:59:16","date_gmt":"2018-09-19T18:59:16","guid":{"rendered":"http:\/\/blogs.bath.ac.uk\/cgr-and-is\/?p=11"},"modified":"2018-09-20T13:49:17","modified_gmt":"2018-09-20T12:49:17","slug":"why-small-businesses-really-do-struggle-to-understand-red-tape","status":"publish","type":"post","link":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/2018\/09\/19\/why-small-businesses-really-do-struggle-to-understand-red-tape\/","title":{"rendered":"Why small businesses really do struggle to understand red tape"},"content":{"rendered":"

Rob Branston<\/a>, Marc Betton<\/a> and Phil Tomlinson<\/a>, University of Bath<\/a><\/em>;<\/p>\n

Regulations are a part of everyday life. They cover everything from the cost and quality of the things we buy, to conditions of employment and the way our homes are constructed. Yet most of the time they go unnoticed. As a set of rules which specify the minimum standards companies and individuals should follow, regulations are put in place because they are deemed to be in the broad public interest. Yet they only work when they are followed \u2013 and this only happens when the people responsible for implementing them understand what they should be doing.<\/p>\n

A gap in knowledge could be the difference between one firm correctly using safety equipment and another firm putting their employees and customers at risk by not even knowing such equipment exists. Part of the difficulty in complying with regulations is they can be complex and often changed. This means firms have to work hard to keep their knowledge and procedures up to date. What was required ten or 20 years ago is often no longer the case now.<\/p>\n

Small firms often find regulation particularly challenging simply because they don\u2019t have the capacity to devote time or money to learning about it. It doesn\u2019t help that regulations are often considered as unnecessary \u201cred tape\u201d, full of rules which appear to lack common sense. Should it really be illegal, for example, for companies selling bottled water to inform potential customers that drinking it will help with rehydration?<\/p>\n

Even the recent changes in General Data Protection Regulation (GDPR) \u2013 all those emails asking you to sign up to mailing lists \u2013 which were publicised for years before the deadline, were complex. There is still plenty of confusion about what is actually required, so unsurprisingly, many firms have struggled to meet their new obligations.
\nOur research on some of the smallest firms in the UK tourist sector found that many owners and managers demonstrated considerable overconfidence when it comes to regulations. Many admitted having imperfect regulatory knowledge in areas fundamental to their operations, but still continued to run their businesses anyway.
\nThis is worrying. All firms should have a functioning knowledge of the basic rules on employment, fire safety, discrimination, and health and safety. Would you prefer to stay at a bed & breakfast run by people who didn\u2019t they should have conducted a fire risk assessment (and subsequently developed plans and installed equipment), or at an alternative establishment which complies with such requirements?<\/p>\n

Trade associations are often considered a key source of support for small firms, assisting with limitations firms face because they are small. During our study we found that they do indeed provide lots of helpful information on things like rules and regulations.\u00a0 Understanding the rule book. Yet, surprisingly, we found that membership of trade associations doesn\u2019t really improve what micro-firm owners and managers actually know about regulation. It just makes them think they know more. This means they risk making poor business decisions, potential prosecution for breaking the law, and even unnecessarily risk public safety \u2013 all because of their own misunderstanding of what the law really requires. This is likely to be caused by information overload and a false sense of security created by receiving \u2013 but not necessarily reading \u2013 the detailed information provided.<\/p>\n

We also found that firms with a positive approach towards regulation generally had greater knowledge, so perhaps a healthy attitude is an important part of learning more.
\nThis all suggests that we need to move away from viewing rules and regulations as being meddlesome and unwelcome red tape. Instead, businesses need to consider them positively as sensible measures which protect them \u2013 and the public. Trade associations could play a key role here, given their regular communication and trusted status with member firms. But they also need to find new ways of making sure the information they provide is both understood and acted upon.<\/p>\n

While the debate about Brexit continues in the UK, politicians should keep in mind that firms are struggling to learn about and implement rules and regulations which already exist.
\nIf Brexit results in significant changes in what companies should be doing \u2013 even if that means cutting red tape as some politicians claim \u2013 then the smallest companies are likely going to find it hugely challenging to make sure they know what they should be doing, never mind actually doing it.<\/p>\n","protected":false},"excerpt":{"rendered":"

Rob Branston, Marc Betton and Phil Tomlinson, University of Bath; Regulations are a part of everyday life. They cover everything from the cost and quality of the things we buy, to conditions of employment and the way our homes are...<\/p>\n","protected":false},"author":604,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-11","post","type-post","status-publish","format-standard","hentry","category-uncategorised"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/pd4Pvu-b","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/wp-json\/wp\/v2\/posts\/11","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/wp-json\/wp\/v2\/users\/604"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/wp-json\/wp\/v2\/comments?post=11"}],"version-history":[{"count":0,"href":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/wp-json\/wp\/v2\/posts\/11\/revisions"}],"wp:attachment":[{"href":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/wp-json\/wp\/v2\/media?parent=11"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/wp-json\/wp\/v2\/categories?post=11"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.bath.ac.uk\/cgr-and-is\/wp-json\/wp\/v2\/tags?post=11"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}