It is also noticed that the public sector organisations must make public commitments more important compared to the dependence on their in-house standards of governance and operations ((Hill and Jones, 2012), which has been proven to be ineffective in case of USPS. Even public sector organisations are liable to be responsible for their business conduct and not simply blame the governing authority for its failure (Haberberg and Rieple, 2008; Ring and Perry, 1985). Thus, USPS did not act in increasing their prices when needed, did not act in retaining employees when it should have to avoid future shortfall. They also did not have a foresighted management to foresee future problems and have ready solutions before theyarrive, and were poor in using existing resources to standardise the service quality. These all led to the identity trap that it fell in which was further escalated by the restrictions from the government, non-imposition of consistent subsidies for adjusting the cost overruns.
3. The third issue that was diagnosed for its failure is the ill-informed decisions made about cost cutting leading to massive lay-offs which hurt them when the demand rose. This is impracticable that an organisation does not consider their employees as their assets (Witcher and Chau, 2010; Thompson and Martin, 2010; Hussey, 1998), and USPS was not one of them as it laid off multiple employees for the primary reason of cost cutting. This particular issue can be attributed to the imbalances in the capital market conditions as the sporadic rise and fall of demand is a critical event for adjusting an organisations cost, especially the fixed cost emerging from the worker salaries (Harrison and St. John, 2004). When the capital market conditions are not stable such as fluctuating interest rates, stock market volatility, and inflation rates, etc., it is wiser to shift the strategy towards a stabilisation drive and maintain the service quality and suppression of costs (Choo and Bontis, 2002). The inability of organisations to adjust themselves in such incidences of demand and cost of worker salaries is often caused by the management’s decision to foresee the market trend, keep their cost low with efficient vendor management, and raise prices gradually to sustain competition (Freeman, 2010).