Risk Control in Organisation
Organisations cannot make perfect decisions, as they do not know the future. Therefore, for the organisation, each decision always hides within it a risk of repercussions. As decisions are allocated to decision-makers, a risky position arises also arises for them. How do organisations and members of the organisation control these risks?
Usually people try to position themselves in such a way that, in the event a decision turns out well, they are credited with it. In the case that it proves to be wrong, they argue with objective constraints (“I couldn’t do otherwise!”), with social deflections (“It was him!”) or with time constraints (“We had to make a snap decision!”). One must consider, therefore, that the main danger for people is always loss of membership or a career failure.
Organisations will try to deflect the risks by taking decisions which can be perceived as an attempt to bring the risk under control (“We examined and checked everything!”). Thus, organisations, by relying on internal control, are per se more risk averse. The risk should, where necessary, be taken over by entrepreneurs, and the dangers transferred into the environment. Processes or structures, categorised as risky, are unlikely and short-lived from an organisation theory viewpoint, because they trigger too much criticism, which is then responded to by safe-guarding with control.