Responsible Risk-Taking

Abstract

Current management reforms require increased risk-taking by managers. Today's managers must rely more on their own judgment and less on rules and regulations in their efforts to improve government services (Altschuler and Behn, 1997; Gore, 1994; Winter Commission, 1993). This article defines responsible risk-taking as innovative management efforts that are guided by commitment to ethics and by respect for democratic processes and legal responsibility. Responsible risk-taking helps avoid potentially embarrassing allegations of impropriety which, for example, may result from inadequate stakeholder consultation or neglect of legal requirements (Cohen and Eimicke, 1996; de Leon, 1996). This study examines the extent and consequences of responsible risk-taking among a national sample of senior local government managers. Framework 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 (Berman, 1998; Holzer and Callahan, 1998; Osborne and Gaebler, 1992). 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. Risk-taking 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 (Calvert, 1993; Sylvester, 1992; West, 1995). 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 (Hagan, 1997; King and Roberts, 1992; E. Lewis, 1980; Nacht, 1990; Zemke, 1987).(1) 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 (Berman, West, and Bonczek, 1998; Bowman, 1991; Carter, 1996; Frederickson, 1993; Gortner, 1991; Guy, 1990; C. W. Lewis, 1991; Reich, 1990). Ethics requires that managers take seriously their scope of authority, legal and ethical ramifications, and commitment to stakeholders (Bowman, 1995; Burke and Black, 1990; Cody and Lynn, 1992; Gilman, 1996). In the absence of commitment to ethics, some managers have received negative media exposure from violating ethics codes and laws (Cooper and Doig, 1992; Garment, 1991; Hart and Hart, 1992; Ramamurti, 1986). 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.(2) Management reforms and other innovative activities thus require well-developed orientations toward risk-taking and ethics (Bowman 1995; Zauderer, 1997). 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. …