ACTA SZEKSZARDIENSIUM - Pécsi Tudományegyetem Illyés Gyula ...

katalin b. fülöp
has irrational 7 elements. 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.
Heckscher summarizes in three points the factors of bureaucratic organizations’ limited
efficiency levels. 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, 1994)
Through almost all of the above arguments can be seen that the operational
specifications and the behavior of high risk avoidance by employees correlate. 8 However,
public sector decision makers, from the point of view of risk behavior, should be divided into
two groups. There are tangible differences in the behaviors of an indefinitely appointed officer
and the public servant who gained his/her office through voting for a specific period of time. 9
2. 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. Employees
in the business sector are sanctioned for inefficient performance not only by the owner
or his/her subordinate by, for example, pay cuts or dismissal. Eventually the competitive
market itself sanctions the inefficient behavior with discontinuation of the organization.
he existence-nonexistence of the public institution however follows a different logic. The
bureaucrat’s attitude is different and as we will see later he/she applies different methods
to reduce risks. 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, 1968). 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.
8 „Excessively high levels of risk aversion” (Stiglitz, 2000. 205)
9 In analyses elected public sector officials are indentified with elected politicians as prototypes of
votemaximization. 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.
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