Management of Opportunities in Public Administration and Reporting on Risks towards Stakeholders

1. Topic Description In recent years’ risk management standards have been established highlighting the “management of opportunities” (MOO). Although risk management is considered to be part of good governance today it... [ view full abstract ]

1. Topic Description

In recent years’ risk management standards have been established highlighting the “management of opportunities” (MOO). Although risk management is considered to be part of good governance today it still focuses mainly on the management of “downside” (or “negative”) risks. Possible explanations may be that:

- the standards themselves provide little guidance on how to deal with opportunities;
- there is evidence for a risk adverse culture in public administration;
- there is a lack of understanding in public administration that risks are also part of innovation;
- reporting on risks towards stakeholders as part of good governance is a difficult task for public managers who are acting in a political environment.

2. Research questions and case study

This paper will focus on the MOO embedded in the systems and processes of risk management. The following questions were asked:

- What kind of guidelines and principles regarding risk management do the standards and recent literature provide to public administrations for the implementation of MOO as part of risk management?
- What are the lessons learned from a case study and what are the recommendations for strengthening the MOO in public administration in general?
- What are the expectations and challenges of reporting on risks?

3. Research Methods

This study is based on the qualitative and quantitative case study results of the City of Zurich, a review of international standards concerning risk management and financial reporting as well as recent literature.


4. Results

The paper will show that opportunities (upside risks) need equal attention as (downside) risks and that more time is needed for the implementation and the integration of MOO in the management systems. Furthermore, there seems to be a gap between recent recommendations by international standards on how public administration should report on risks (which also addresses the needs of stakeholders for information) and the readiness of the public managers and political leaders to inform the stakeholders about these risks. Authors

Prof. Dr. Caroline Brüesch, Director Institute of Public Management
brui@zhaw.ch; Phone: +41 58 934 68 01

Sandro Fuchs, Research Associate / Project Leader
fucs@zhaw.ch; Phone: +41 58 934 70 30

Dr. Alexander Mertes, Research Associate / Project Leader
mert@zhaw..ch; Phone: +41 58 46 98

School of Management and Law / Institute of Public Management
Zurich University of Applied Sciences
Bahnhofplatz 12, P.O. Box
8401 Winterthur / Switzerland