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The article presents a study which analyzes the distinction of personnel flexibility and red tape in public and nonprofit organizations due to institutional and political accountability. It states that theoretical perspectives predict sharp differences between public and nonprofit organizations. The study uses survey data from the managerial levels of the two kinds of organizations in Georgia and Illinois, which compares red tape and personnel rule constraints. The study also investigates the perceptions of respondents from both organizations on organizational red tape and whether personnel rules constrain managers in rewarding good employees and removing poor performers. The results showed that public managers perceived lower personnel flexibility and higher organizational red tape.