Organizations and the Production of Systemic Risk
Title
Organizations and the Production of Systemic Risk
Author
Perrow, Charles
Research Area
Social Institutions
Topic
Complex Organizations and Bureaucracies
Abstract
Organizations and Systemic Risks
Systemic risks are those threatening multiple parts of an organizations, or other organizations and systems in its environment. Interdependencies abound in our highly technological world and can be unexpected, and in the case of global warming—largely an organizational failure—dire. An 80% reduction in the assets of oil, gas, and coal companies is required to reduce warming but is not anticipated. So‐called “natural” disasters are shown to be enhanced or even caused by organizations. The organizational roots of the 2008 economic meltdown, Fukushima, and chemical plant accidents are examined with regard to regulations, profits, and system interdependencies. With economic systems favoring short‐run concerns, and shareholder rather than stakeholder values, there is little evidence of emerging long‐run visions that could protect future generations.
Systemic risks are those threatening multiple parts of an organizations, or other organizations and systems in its environment. Interdependencies abound in our highly technological world and can be unexpected, and in the case of global warming—largely an organizational failure—dire. An 80% reduction in the assets of oil, gas, and coal companies is required to reduce warming but is not anticipated. So‐called “natural” disasters are shown to be enhanced or even caused by organizations. The organizational roots of the 2008 economic meltdown, Fukushima, and chemical plant accidents are examined with regard to regulations, profits, and system interdependencies. With economic systems favoring short‐run concerns, and shareholder rather than stakeholder values, there is little evidence of emerging long‐run visions that could protect future generations.