Responsible risk-taking

Risk-taking is inherent in contemporary managerial decision making. The turbulent public sector environment increasingly requires managers to adopt innovative approaches to solve emerging problems. Risk-taking requires an appreciation that adversity and uncertainty can be overcome in the quest for better outcomes. The possibilities of failure are real, and managers must be confident that when their efforts do not bear fruit, they can recover and pursue alternative actions. Risktaking often appeals to the need for adventure and accomplishment that is present in many managers, and managers with a propensity for risk-taking realize that potential gains provide a yardstick by which their performance is judged.

However, a danger exists that confident attitudes toward risk-taking and the willingness to go "outside the bureaucratic box" may cause managers to deemphasize responsiveness and accountability. Some managers are portrayed as loners or "entrepreneurs" who are willing to do anything and use anybody in an egotistical pursuit of their goals.

Such risk-taking requires an infusion of ethics. Ethical orientations emphasize the importance of being wholesome and acting with integrity. Ethical action is inspired and pro-active in being concerned with honesty, responsiveness, accountability, and the well-being of others. Ethics requires that managers take seriously their scope of authority, legal and ethical ramifications, and commitment to stakeholders. In the absence of commitment to ethics, some managers have received negative media exposure from violating ethics codes and laws.

Specifically, of concern are not only managers with profoundly unethical orientations, but also those with ethical orientations that are not well-developed or which are selective in nature. For example, managers who are less adamant about the importance of protecting the public interest are less likely to make it a priority in the face of other competing pressures. Managers who feel strongly about some ethical principles but not about others may make erroneous judgments as well. For example, they may treat their employees fairly but fail to be adequately responsive to stakeholder needs. They may fail to seek adequate stakeholder input in their decision making.

Management reforms and other innovative activities thus require well-developed orientations toward risk-taking and ethics . These orientations can be combined in many different ways, but most are informed by the following assumptions:

1. that better ways of doing things exist and should be actively sought and implemented in organizations

2. that strategies for change should reflect current needs, knowledge, resources, opportunities, and scope of authority

3. that reforms should be based on best practices and a clear understanding of legal and ethical ramifications, and

4. that managers are neither omniscient nor omnipotent and therefore require the advice and cooperation of others in their decision making and execution.

These assumptions are frequently combined in a step-wise process of managerial action. For example, responsible risk-takers might take the following steps:

These steps do not limit the innovative, transformational energy of managers, but they do put brakes on hasty actions.
 

This study examines the extent to which managers have well developed orientations toward ethics and risk-taking. Casual analysis suggests that responsible risk-taking might be quite common, especially among senior managers and directors. This is because many forces cause managers to continuously address new problems, some of which require the use of new strategies. At the same time, all managers must practice some form of protecting their backs, especially in the fish bowl of the public sector where the fear of public scrutiny causes managers to consider their actions carefully. In addition, personal orientations toward professionalism also push managers toward responsible risk-taking. For example, such managers may belong to professional associations that often promote best practices and ethics among its members.

However, the breakdown of ethics in various locales is not easily explained by individual orientations alone. Rather, such examples suggest wider and more deeply rooted problems among many managers and offices, problems that might be explained by deficient organizational policies or the presence of dysfunctional organizational cultures. For example, bureaucratic cultures of fear among employees and managers often create a climate that supports actions that are insufficiently informed by ethics. This is because fear reduces opposition, allows managers to readily draw on the contribution of subordinates, and inhibits critical reflection and assessment that can "flag" potential ethics violations before they are committed. The lack of ethics policies and/or their enforcement in organizations furthers such actions as well.