Beurocracy is one of the most dynamic systems in management. It constantly needs innovation and risk taking in its service deliver to adapt to ever changing needs of governance. However it is observed globally that it avoids risk taking. In this post I would try to unravel most fundamental psychological factors which is responsible for this anomaly.
There are number of biases and prejudice that human behaviour possess. Hindsight and outcome bias is what drives low risk taking ability.
Hindsight bias reflects imperfect ability of human mind to reconstruct past state of knowledge or belief that have changed. Simply stated it is “I knew it all along effect” . A common example a changed world view after school, college, first job and so on.
Outcome bias reflects prejudice one possess for positive outcome. Simply stated it means “success has many fathers while failure is an orphan.”
Beurocracy suffers from both.
Hindsight bias is witnessed when officers or risk takers are hounded for wrong procedures and decisions of the past. An eg being 2G scam of India, involving direct allocation of spectrum to Telecom Companies. It was projected that loss of 1.72 lakh cr INR occurred to the exchequer later after a decade. Conditions which were present during the allocation were not considered.
Outcome bias come into picture when new project are announced. Project with ambitious aims one gets the cut. The practicality of its implementation takes a back seat. Secondly media and other scrutinizing agency take in account only the outcomes and not the problems and intricacies involved. The other story does not see the light. Think of your boss asking for the outcomes and not caring about impediments
Both these factors together along with strict scrutiny to decisions made and tough laws, makes the beurocracy reluctant to take actions and try taking risk. This convert them to a procedural seeking machine without empathy.
– Himanshu Singh