Who is calling the shot? Risk culture experiments on bi-level governments

Abstract

Purpose This study aims to explore how risk culture – tone at the top (TATT) and informed risk decision (IRD) – can affect the effectiveness of risk management (EORM) in the government. Design/methodology/approach The authors experimented on 84 civil servants working in central and local governments in Indonesia, focusing on vital local governments and critical ministries/institutions in central governments. Findings TATT and its interaction with IRD do not affect the EORM, while IRD and socialization of risk affect and improve it. A weak TATT, low commitment and ineffective implementation of risk culture to the lower-middle echelon may impair a country’s risk management (RM) practice. IRD with socialization is also the key to improving decision-making and RM. Originality/value This paper illuminates the possibility of risk culture in regulating the EORM in the governmental general planning process using the experiment as the research method and provides different facets in the application of risk culture in the government, where the focus is on policy-making, budgeting and planning aspects by involving several important ministries, institutions and strategic local government’s civil servants.