Navigating through the Regulatory Lens: Fueling or Un-fueling SMEs Growth in Pakistan

Abstract

A healthy corporate sector ensures the economic success of a country. The smooth and effective execution of an organization is highly dependent on the task environment it is working. A company has to modify its internal environment in accordance with the external environment so as to make it a success. Political and legal environment is one of the most important environments having direct impact on the overall business environments specially the economic environment. The legal framework defines the boundaries for an organization that has to be complied. The government is responsible to make the task environment favorable for the organizations by drafting policies, supportive and beneficial for them. Although the macro environment is beyond control of an organization but the government of a country has the power to regulate it to certain extent by stabilizing the political and legal framework to make the task environment favourable for them. Ease of doing business is one of the most important drivers encouraging entrepreneurship. The objective of research is to identify the legal constraints behind closure/ restricted growth of SMEs. The data was gathered from the entrepreneurs regarding the legal constraints faced by their organizations/ sectors using survey questionnaire based on likert scale depicting the level of their effect on the organization. The research emphasizes the need of policies stimulating growth of SMEs rather impeding them. The research aims to facilitate the policy makers while drafting policies to make them beneficial for economic growth by ensuring ease of doing business in the country.