Fülöp The behavior of an organization including risk attitude followed in case of decision making process has long been the subject of economy. The great majority of the investigations however concern the entrepreneur or the entrepreneurial organization.
This study summarizes the research results regarding the components of risk attitude and the main characteristics of the behavior of a public organization and its managers.
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The bureaucratic organization Risk avoidance has been an intriguing subject of economic research both on individual and organizational levels. The great majority of the investigations concern the entrepreneur or the entrepreneurial organization. Risk avoidance is a priori hypothesized as a major attribute of both the public servant and the public sector organization but the specialties of risk attitude are treated by a few works only.
Below is an outline of the most important characteristics of risk guinot anti aging szemkörnyékápoló krém of the bureaucrat and the bureaucratic organization. Practical level conceptualization and evaluation of certainty and uncertainty is determined by the scope of decision, its circumstances and naturally the individual decision maker.
Also with regards to risk behavior those active in the business sector are connected by the main objective of their actions: profit gain. Such motivator is harder to find when we look at economic decision makers in the public sector. The man of the office, the conformist sitting behind his desk often abusing his power is usually appearing in the next years as the antithesis of 1 Lector: Dr.
Zsolt Huszti PhD 15 katalin b. Mill, the danger of bureaucracy is that it becomes pedantocracy.
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Spencer postulates that bureaucrats work only for creating steady employment for their family members and friends, while F.
Von Stein specifically advises against having paid accou ntants, dis intere sted, propertyless officials sitting on government. The anti aging ellenőrző lista of the organi zation-sociologist, Max Weber, in the first part of the last century have re-evaluated the phenomenon. According to him the bureaucratic organization is a consequence of the general development of modern society, more specifically the consequence of normal rationalization.
The Weberian bureaucracy is an idealtype which is ratio nalist in its function fulfillment and helped by its reliability, professional wisdom as well as clear hierarchical pathways. In reality the disfunctionality of the organization — power struggles, job accumulation, sluggishness and opportunism accelebrate nouva anti aging termékek an empirical fact during his time.
Kieser, There are three theoretical schools concerning the role of public sector and bureaucracy. One is the school of public choice theory 3 based on the theses of Niskanen, Wolf, Wagner, Buchanan, Tullock and Stigler which is unmercifully critical of the workings of bureaucracy.
Niskanen with his double office thesis analyses the behavior of burea ucr ats abusing their monopolistic position Niskanen, The also profusely quoted Wagner law Wagner,as well as Berry and Lowery also analyze the dangers of the ever bigger role the government plays.
With statistical data Stigler proves that intertwined with industrial interest groups bureaucrats are very capable of hijacking jurisprudence from the original intentions of the legislators Stigler, Wolf lists non-market errors which result in the proliferation of state institutions: overexpectations of public accelebrate nouva anti aging termékek, the role media plays in exaggerating market failures or the remains of socialist ideologies not discredited in Western democracies, which all force the growth of the public sector Accelebrate nouva anti aging termékek, Buchanan, honored with the Nobel Prize inwas studying public decision making processes and when analyzing the entanglement of politics and economy also pointed to the inevitability of state overspending.
Hallmarked by Musgrave, Marshall and Pigou, the social optimum school 4 is prima rily focused on market failures remedied by state interventions being pushed towards the Pareto optimum.
Following R. Musgrave, mainstream economic thought is defined by the notion that in a democracy an economy can be maintained successfully for a long time when market mechanisms are complemented by the public sector.
Representatives of the trend are too numerous to list, I would briefly mention only two examples here. Paul A. Samuelson wrote Economics under this influence which is perhaps the most popular textbook in the science of economics.
Also based on the philosophy of social optimum school is the indispensable work of Nobel Prize winner in 2 During the 20th Century authoritarianism the entrepreneurial activity becomes anti social behaviour, the person and knowledge of the state official is unquestionable.
The ideology based on this system fortunatelly has become marginalised by now. On one hand when the state increases social expenditures fulfill expectations of entrepreneurs it enhances better profit gaining opportunities.
On the other hand it needs to provide consumption products and services to reduce social tensions, which brings an increase of the so-called social expenditures. Both induce the growth of state.
Cullis-Jones, The effectiveness at organizational level — the proportion of input-output — and the improvement of rates are classic problems of economy. Several studies prove that business organizations operate with higher efficiency than public institutions. Mueller provides 71 comparative studies between and covering some 20 sectors from aviation through mining to weather forecast services.
In only 5 cases did business ventures turn out to be less efficient and further 10 cases revealed no significant differences between businesses and public institutions. Mueller, The most important is the lack of a profit driven philosophy.
Beyond this, lower efficiency levels are usually explained by the followings: 1. Operational specifications. Public sector organizations are often active in areas where performance is difficult to measure prevention in healthcareonly long term performance can be conceptualized educationconsumer satisfaction as point of measure cannot be used protectionor the organizational operation cannot be compared to anything since the main activities of the organization fall within a quasi-monopolistic position Constitutional Court.
Organisational specifications. Public institutions are not usually threatened by accelebrate nouva anti aging termékek, which means they can afford inefficiency. Their decisions are more often regulated by legal provisions -like rules of public procurement-and these may very well increase expenditures.
Their operations depend on annual budget allocations which may also limit the rationalities of economic decisions even if financing is either more or less than what is reasonable.
Personal specifications. The strongest binds hindering efficient operations are concerning employees; hiring and firing public servants is always cumbersome and legal provisions of salary allocation may also prevent a rational management of human resource. Tight budget and the system of payroll placement may obstruct the creation of high quality workforce; employment, the retention of employees, even recruiting 6 Stiglitz, J.
Quality performance by worker is not followed by adequate reward- just as bad performance is not sanctioned- the incentive less environment is thus fed by workers holding back performance. The most important being segmentation: everybody is responsible only for a limited area; hence operational members- workers- protect their respective areas only.
Partly because of this and partly because of rigid hierarchical build-up, employees of the public office perform well under their abilities. The other destructive factor is the widespread information systems within organizations, partly remaining hidden, they cannot really be influenced. The third is the inflexible and unable to adapt organization where only fragments of information reach lower levels therefore the institution is gradually degenerated. Heckscher, Through almost all of the above arguments can be seen that accelebrate nouva anti aging termékek operational specifications and the behavior of high risk avoidance by employees correlate.
Risk management of public servants Risk avoiding behavior of the public servant stems from the lack of profit making incentives; risk taking is not rewarded but in contrast an occasional error may very well obstruct promotion, the chance of losing the job however is usually minimal. Eventually the competitive market itself sanctions the inefficient behavior with discontinuation of the organization.
The less competitive the relation is with other institutions the freer these risk reduction applications are.
Niskanen points out that the reason for the uselessness of organizational concentration, termination of duplications, and governmental efforts of centralization in order to increase efficiency is that, eliminating the competition between organizations the bureaucratic institutions are driven into a monopolistic position Niskanen, Niskanen also emphasizes the informational asymmetry between 7 Such irrational economic points may be personal interests, considerations according to quota, considerations of fairness, of equalopportunity behind which there may be legal and acknowledged social norms as well as unethical considerations.
In my view leaders of public institutions enjoying different levels of autonomy also follow this behaviour since behind their formal appointment there are decisions made by the boardroom that functions according to the rules of representative democracy. Mueller quotes M. Investment is an obvious tool to make the organization grow. Therefore there is a strong relationship between the economic conceptualization of profit and the theory of power, eventually both may be attributed to uncertainty and both go to the holder of information.
It is organizational profit that makes the best resource for individual profit growth. By contrast, political power does not necessarily monetized.
Accelebrate nouva anti aging termékek can also say that public servants, officers have a much harder time converting accelebrate nouva anti aging termékek to money.
Let us see what behavioral patterns help or limit public servants to increase power and reduce risks. An increase in the number of office employees, and an increase of decision making bodies.
So the risk avoiding bureaucrat is likely to propagate the installment of councils and ad-hoc commissions. Hood, 2. Personal decision making competence and responsibility in individual elements of the operational mechanism will be most igf 1 anti aging formula. The organization will remain inefficient because new elements of technological development only slowly trickle in, which makes for anti aging természetes gyógynövények same future of big budget and big payroll.
What follows from the above is the intention to delay decisions because this way risks will also appear later. And when decision is due out of two projects the one 10 I disregard corruption in this case. And the bureaucrat remains indifferent if this brings with it a delayed obtainment of profit as well. The power of the public servant grows in direct proportion with the increase of the budget.
An increased budget also means or, allows for, the involvement of experts in bulk reducing decision making risks or shifting them upon external co-operators. Hood, 5. When, however, certain elements of output are measured risk cannot be reduced and power cannot be increased indefinitely by ruining efficiency. Then the actions of the bureaucrat spectacularly shift towards the measured output, as is proven by Mueller with the help of the studies of Lindsay and Dávila and Co.
Building constructions serve as best examples here. A same reaction is brought out when the public or the media expect some visible result or when certain lobby groups manifest their preferences.
Members of bureaucracy are then interested in shifting actions towards spectacular and demanded outputs even at the expense of efficiency. This way, the risk of decision falls, implicitly, on the demander. With regards to public servant behavior, representatives of the social optimum school are less rigorous. Breton, for example, emphasizes that competition for public a appointments are just as severe as they are in the business sector so performance hold-up cannot be a maintained behavior in the public sector.
Mueller, Representatives of the school debate that all members of bureaucracy should follow behaviors described in public decision making processes and their risk avoidance would impede the growth of organizational efficiency.
The Musgrave trend generally concedes that operations of public institutions may be shifted towards the optimum with adequate sets of incentive tools. Niskanen objects to such steps being taken in the public sector and goes on to detail how members of bureaucracy deformed systems of incentives like the ones introduced during the Carter and Reagan administrations.
Niskanen, 3. The Behavior of the Elected Public Servant There is no reason to suppose that the elected accelebrate nouva anti aging termékek is not the same efficiency maximizer as the rest of the economic actors. They are at the top of hierarchy; their actions therefore are followed with particular 20 the consequences of blame avoidance in case of public organizations attention.
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That is why the preference of spectacular outputs dominates over the more important but out-of-public-attention actions. A similar circumstance is that the exposing of public institutions of a recent doctrine, transparency heavily influences decision making.
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Hood, Their appointment is limited in time, usually years and this induces short to mid-term thinking and short term profit maximalization. Their subordinates are seldom elected, they appoint or inherit them from predecessors so they govern a bureaucratic organization. In case of their actions non-market demand conditions rule. Partly due to the sizes and specific nature of the projects and partly because of the intentional maintenance of the informational asymmetry consumers cannot measure and connect the profits of projects and the burdens- e.
This and other factors 11 cause excessive demand towards products of the public sector. In other cases, the demand curve is outright uninterpretable when goods cannot be rejected.
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Non-market supply conditions- the emergence of production functions and input-output relation unknown or imprecise, often monopolistic position- again, a more lenient limitation on the decision maker. That is to say, government decision makers may act irresponsibly, free from known rules governing the scope of actions. Downs writes about the vote maximizing behavior in which rational decisions serving public interest is hijacked by voter intention to influence, by the length of office term and by the time of re-election.
The time horizon of elected officials lasts only to the next election so it is worth for them to even drastically discount the future. Hood writes about the so called blame avoiding behavior, as a unique form of risk avoidance with transparency.
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Negativity bias, known from psychology, is a generally observed cognitive phenomenon whereby negative information has greater effect and triggers more active reactions so the news value of error and loss is greater than that of positive events. The economic explanation of the phenomenon is the law of decreasing returns.
All this leads to the fact that the main effort of elected public officials will be to avoid blame. Managers of public offices may follow three strategies according to Hood. In reality, project choice may be determined by the discount rate used at the summarisation of the future cash flow.
It does indeed depend on the evaluation of risk.