1. INTRODUCTION

1.1. Background of the Study

Privatization has been one of the most effective strategies that have covered the whole globe and the existing industries (Abbott, 2011). With the privatization, the performance of the firm regarding the operational and the financial activities gets improved to the maximum extent. Due to this, the huge state-owned enterprises (SOEs) such as Royal Mail adopted the privatization and made the business operation more effective in the market (BBC News. 2015). Considering the profits of Royal Mail there is a clear impact seen on it due to privatization. Along with this, the company is also able to increase the number of capital investors for the future growth (Bushell, 1939). The research demonstrates the facts which are related to the following privatization and investigate the role of privatization in the enhancement of profits and capital employed by considering the case study of Royal Mail (Chaudhuri, 2011).

1.2. Significance of the Study / Research rationale

What is the research issue?

The concerned research is focused towards the development facts that have been seen in the state owned enterprise after adopting the privatization policy (Darity, 2008). Based on the current market analysis, there are lots of differences in the profits of the firm after getting privatized. Therefore, it is essential to identify the factors that bring development in the company after getting privatized (Florio, 2004). The research is based on the case study of Royal Mail where the impact of privatization on the profitability and capital employed of the company is analyzed efficiently (Heath, 2014). The research is determining the changes in the profits of the Royal Mail after getting privatized. Along with this, the research investigates the improvement in the capital employed due to the privatization of the Royal Mail (Lewis, 2005).

Why is it an issue?

If the privatization of the government firm is considered properly, there are lots of the government firms that have chosen to get privatized rather than running with the huge losses or mismanagement (Macfarlane, 2014). With this thought process, there is emerging a huge competition that arises between the public and private firms. The developments that are shown by the private are quite more than the public firm. This is one of the major issues that have been observed in the market (Madden and Morey, 2011). This is considered as problem because with the rapid growth of privatization, there is reduction in the government firms in the market. This research therefore, reflects all this as an issue and determines the factors that enhance the profits and capital employment of the company after getting privatized (National Audit Office. 2015).

What could this research shed light on?

In the previous research, conducted in the following topic are unable to determine the major factors that enhance the profits and capital employed in the firm after privatization. With the help of the following research, those factors are targeted and the complete research is processed on the same direction.

1.3. Research aims

Aim of the research is to understand their impact of privatization on profitability & capital employment of state owned enterprises. The study is basically focusing on the case of privatization of Royal mail.

1.4. Research objectives

1.5. Research questions

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2. LITERATURE REVIEW

Privatization is one of the major issues that have been observed in the recent era. The companies that are struggling with the poor management and insufficient financial crisis move forward to get privatized and improve its condition in the market (Abbott, 2011). This is the reason that the companies are more attracted towards the benefits of privatization. Privatization has been one of the most effective strategies that have covered the whole globe and the existing industries (Abbott, 2011). With the privatization, the performance of the firm regarding the operational and the financial activities gets improved to the maximum extent. Due to this, the huge state-owned enterprises (SOEs) such as Royal Mail adopted the privatization and made the business operation more effective in the market (BBC News. 2015). Considering the profits of Royal Mail there is a clear impact seen on it due to privatization. Along with this, the company is also able to increase the number of capital investors for the future growth (Bushell, 1939). The research demonstrates the facts which are related to the following privatization and investigate the role of privatization in the enhancement of profits and capital employed by considering the case study of Royal Mail (Chaudhuri, 2011). There are lots of researches processed to determine the factors that are responsible for the development of the firm after getting privatized (BBC News. 2015). As per the research of Abbott, 2011, privatization is one of the technique through which the state owned companies like Royal Mail is able to improve its efficiency. This statement can be supported with the example of the case of Royal Mail (Bushell, 1939). As per the previous year’s efficiency, the Royal Mail was moving with lots of losses as there was less profit with the company and at the same time there were many issues that the management of the company was facing (Chaudhuri, 2011). But after the decision of privatization, the company is able to work more efficiently than before. The managers who work after the privatization get a proper share in the profits which motivate them to earn more by working hard in the current situation (Darity, 2008). Considering the same factor, Bushell, 1939, defines that along with the efficiency improvement, there are certain developments that can be observed in the political interference (Florio, 2004). The company that is getting privatized is under the observation of the private entrepreneurs which restrict the government to interfere in the affairs of the business to some extent. Due this the development has been seen in the operations of the Royal Mail after the ownership got privately owned (Heath, 2014). In argument with the above thought process, Chaudhuri, 2011, stated that there is no enhancement of efficiency due to the privatization and as there is less variation in the sales figures of the company after privatization (Lewis, 2005). As per his research, there is more expansion of the business after the government firm is getting privatized. The private entrepreneurs are more interested to invest in the restructure or expansion rather than government management.

Therefore considering the above specific factors, there are some of the major factors that are not covered in the previous research study (Macfarlane, 2014). This research will reflect all this as an issue and determines the factors that enhance the profits and capital employment of the company after getting privatized (Remesh, 2006). So, the following study will consider the all the factors that are associated with the development of the firm that was previously owned by the government and is getting privatized.

3. RESEARCH DESIGN AND METHODOLOGY

1.1. Research paradigm

The following research is based on the some of the real facts and figures which are based on the Royal Mail, a state owned enterprise. Therefore, as per the nature of the research, Pragmatic approach is the best and suitable for the current case study. Considering the facts as well as the figures of the Royal Mail, there will be presence of both the qualitative and quantitative data for the study. Based on the available data, both the qualitative and quantitative research methods are used in pragmatic approach. Considering the qualitative approach, there will be formation of themes based on the objectives and research questions of the case study. Along with the themes, some of the statistical data will be chosen for the descriptive analysis. As in the following case study, there is a discussion regarding the impact of privatization on the profitability of the Royal Mail (Obadan, 2008). Based on the following discussion, the profitability of Royal Mail for consecutive two years will be collected and with it, there will be a comparison of the data collected on the basis of the descriptive statistical techniques. The same will be done considering the improvement in the capital employed in the Royal Mail due to privatization of the company. For processing the qualitative analysis, the experts of the economics and the market analyst are interviewed and based on their responses, the interpretation are subjected on the following themes. The themes are linked to the questionnaire through which the experts of the economics and the market analysts are examined. This kind of research approach is beneficial and is termed as triangulation approach.

1.2. Data collection

Considering the case study of the Royal Mail, the data that need to be considered are collected from both the primary and secondary sources (Osborne, 1843). Considering the primary sources, there is questionnaire prepared based on the objectives and purpose of the research. With the help of the following research, fresh responses are collected from the experts of the economics and the market analysts. Therefore, with the help of the questionnaire and interview method, the data are collected from the primary sources available for the current case study. Evaluating the secondary sources, the reports and the reviews that are published in the government websites and news bulletins are considered for detailed study. With the help of the following sources of data, the exact and accurate information can be determined for this particular sensitive case study. As the topic is related to the state owned enterprise, so maximum of the information are declared on the specified government websites. With the limited access to those data, the research has been processed to determine the accurate results on time. Along with the major government websites, some of the newspaper online bulletin has also been included as many of the facts that are not properly disclosed in the government websites are clearly mentioned on the basis of comments of various economist of UK which is a positive factor for the current study.

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1.3. Resources

Considering the nature of the study, the resources that have been included in the following research are previous researches and the information that are published in the authenticated government websites. The issue is related to the firm which is regarded as one of the huge state owned enterprise. Discussing the facts of the research, the government websites are beneficial for the research and maximum confidential information are available in these websites. Along with those websites that are under the supervision of the government and provide the reviews of the market on the issues of the government are also included in the study. With the involvement of the following resources, the study has got strengthened in some context as there is lots of information related to the following issue of privatization. The resources that are displayed by the private as well as the government news bulletins are also included in the study as these websites display the facts that are quite hidden due in the other websites due to the sensitiveness of the issue discussed. The experts that are involved as sample for the interview purpose are also regarded as the resources for the research as without the comments of the following personality, the in-depth analysis on the following aim is not possible and effective at the same time.

1.4. Sampling

In the present research, the sampling method has been included as the experts are selected for providing feedback on the privatization of the Royal Mail. With a proper analysis of the following issue, the best sampling technique that is suitable for the research is systematic sampling. As there are few experts who are able to comment on the following issue of the research. So the selection should be made based on the knowledge of the experts on this specified issue. The market analysts that are included in the following research are also having lot of in-depth knowledge about the privatization and the reasons that are responsible for the privatization of the Royal Mail. The reviews that are provided to the researcher from them are quite beneficial and are exact that can be utilized for the analysis of the following case study.

1.5. Data analysis

The method that has been included in the following study is triangulation method. In the following method, the qualitative and quantitative method are used in combination and as per the analysis by both the method, the results are derived for the following study. Considering the qualitative research, there is proper formation of themes based on the objectives and research questions of the case study. The responses that are collected from the questionnaire are summarized in a proper manner with the help of the following themes as they are linked with the questions that are asked to the market analysts and the economic experts. Therefore, based on the following method, a perfect conclusion is derived which describes all the aspects associated with the study. In case of quantitative analysis, there is proper comparison of two variables side by side. The variables that are considered for the comparison are profitability of the two consecutive years. Along with this, the capital employed in two consecutive years in regard to Royal Mail is also compared simultaneously. With this comparison, there is proper descriptive statistical report available with the researcher which can be interpreted and concluded same as the results of the thematic analysis. The use of both the method will bring more exact and accurate results to the researcher on the following research.

1.6. Limitations

The major limitation of the following research is mentioned below:-

Considering the following case study, there are lots of factors that need an in-depth investigation of each one of them in systematic manner. This kind of research needs proper time devotion, the research is done under limited period of time which restricted the researcher to focus on each factors associated with the research aim properly. So time is one of the major limitations of the following research.

There are some of the factors that are sensitive and confidential in nature. Due to this reason, those facts and figures are not available on the online and offline sources. So, the research lacks those resources investigation.
The research is conducted by the human being that signifies the involvement of biasness factor in the research.
The research topic is quite vast in nature to include all the facts in a single research which is not possible for the researcher. Therefore, the research is focusing on some of the specified facts that have been chosen by the researcher and exclude some of the other aspects. Therefore, there is huge scope of further research processing.

1.7. Accessibility issues

All the data that have been included in the following research are authenticated as the matter is related to the privatization of the state owned firm named as Royal Mail. Some of the websites that have been included have access to certain points and are not permitted to be accessed by the external members or public. The access is only permitted and allowed after government permission as the issue is very sensitive and a disclosure of the information can create issue to the government and the economy of the country as well. The reviews that are provided to the researcher from the experts are also limited, as they do not want to bring themselves into notice by disclosing the internal facts.

1.8. Ethical Considerations

All the information that has been included in the following research is collected after considering the ethical and legal concerns. The sources from where the unique data is collected are kept hidden in the research under the norms of ethics. Along with this, the personal information of the experts and analysts that have been included in a confidential manner as this helps the experts to reveal the information related to the topic more clearly and specifically. The study will have to be based on ethical protections of human participants which will be guided by the basic principles of informed consent, confidentiality and anonymity.

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