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This electronic thesis or dissertation has been downloaded from the King’s Research Portal at https://kclpure.kcl.ac.uk/portal/ Navigating the Practice An Exploration of Enterprise Risk Management at the Port of London Authority Hendy, Philip John Awarding institution: King's College London The copyright of this thesis rests with the author and no quotation from it or information derived from it may be published without proper acknowledgement. END USER LICENCE AGREEMENT Unless another licence is stated on the immediately following page this work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence. https://creativecommons.org/licenses/by-nc-nd/4.0/ You are free to copy, distribute and transmit the work Under the following conditions: Attribution: You must attribute the work in the manner specified by the author (but not in any way that suggests that they endorse you or your use of the work). Non Commercial: You may not use this work for commercial purposes. No Derivative Works - You may not alter, transform, or build upon this work. Any of these conditions can be waived if you receive permission from the author. Your fair dealings and other rights are in no way affected by the above. Take down policy If you believe that this document breaches copyright please contact [email protected] providing details, and we will remove access to the work immediately and investigate your claim. Download date: 27. Sep. 2021 Navigating the Practice: An Exploration of Enterprise Risk Management at the Port of London Authority Philip J. Hendy A Thesis Submitted to the Department of Geography, King’s College London for the degree of Doctor of Philosophy (Ph.D.) December 1, 2017 Page 1 Abstract This thesis explores the intra-organisational dynamics behind the increasingly prevalent adoption of private-sector style enterprise risk management (ERM) practices by public-sector organisations. The core tenets of ERM are predicated on the idea that a diverse range of organisational issues and challenges can be processed and managed through a set of standardised, universal tools and techniques. Neo-institutional theory holds that broad, macro level pressures act upon organisations at a field level creating pressures to adopt homogeneous structures and processes as a means of gaining and maintaining organisational legitimacy. However, outside of the notion of a range of strategic decoupling responses, relatively little research has been undertaken on how different areas of an organisation actually interpret and apply the institutionalised practice of risk management across its functional departments. To that end, this thesis looks at how the Port of London Authority is operationalising a newly adopted risk management policy as it continues to manage societal and organisational risks. Through the use of 41 semi-structured interviews, document analysis and participant observation, the study explores why and how employees from functionally disparate areas of the organisation utilise risk management practices. The study focuses on the organisational, institutional and cultural dynamics that drive and shape an employee’s understanding of what ERM is meant to achieve and how best to go about implementing it. The findings suggest that employees decoupled the ERM practice differentially across the organisation’s departments as a means of ‘organisational conservatism’. The research presents new knowledge in regards to how the Port of London Authority relied on three distinct ‘if-then’ logics as a means to decouple ERM from its intended outcome of managing risk across the organisation to one that serves to protect and reinforce existing organisational arrangements and rationalities. This process of organisational conservatism enabled departments to reinforce their identities, increase their organisational standing and substantiate past actions. In essence, the organisation adapted ERM to reinforce and justify existing practices as a means to become more certain about what it already knows, rather than reduce the effects of uncertainty in achieving the organisational objectives. Page 2 Acknowledgements First and foremost, I must thank my wife. Amy, you have been nothing short of incredible throughout this entire process. The understanding, compassion and love you have shown me throughout this journey is something I will remain eternally grateful for. I am extremely grateful to Henry Rothstein for the countless discussions, unwavering support, and grounding opinions you so freely supplied me with. The encouragement you extended made my transition back to academia a much less daunting endeavour. I am well aware how truly fortunate I was to have you as my supervisor. Thank-you to David Demeritt, for your challenging insights and making available your wealth of knowledge on such a routine basis. A special thank you to Sam Tang, as well as the rest of Risk and Hazards reading group: Lukasz Erecinski, Dominic Way, David Self, Maria Escobar, Maria Vinogradova, Anne-Laure Beaussier, and Chris Bennett. I also extend my sincere gratitude to the Alberta Energy Regulator. It is through my employer’s substantial moral and financial support that all of this was made possible I would also like to thank all of those individuals at the Port of London Authority who so openly welcomed me into their midst. They extended their sense of family so quickly and genuinely; including me in meetings, discussions, and activities without question or concern. I must also thank Ragnar Lofstedt, who was instrumental in connecting me with the Port of London Authority. Lastly, I would like to offer a special thank-you to my most beloved canine companion, Lily. You made a huge journey from Canada to London in the middle of January, weathering conditions I would rather not know about. You were my trusted companion and confidante on some long and rainy days, when I missed so much of my family and friends from home. I sincerely miss our frequent escapes to the woods and enjoying the peacefulness of English countryside together. Page 3 Table of Contents Navigating the Practice: An Exploration of Enterprise Risk Management at the Port of London Authority ............................................................................................................................................................. 1 Abstract ............................................................................................................................................................... 2 Acknowledgements ........................................................................................................................................... 3 Table of Contents.............................................................................................................................................. 4 Index of Figures ................................................................................................................................................ 8 Index of Tables .................................................................................................................................................. 9 Chapter 1 Introduction................................................................................................................................... 10 1.1 Enterprise Risk Management in the Public Sector ........................................................................ 10 1.1.1 ERM and Port of London Authority ........................................................................................ 12 1.2 Research Aims and Goals .................................................................................................................. 13 1.3 Thesis Outline ..................................................................................................................................... 16 Chapter 2 Literature Review .......................................................................................................................... 17 2.1 Introduction ......................................................................................................................................... 17 2.2 The Rise of Enterprise Risk Management ...................................................................................... 17 2.2.1 Corporate Governance and the Introduction of ERM .......................................................... 20 2.2.2 What is ERM? ............................................................................................................................... 22 2.3 Challenges of Operationalising ERM .............................................................................................. 24 2.3.1 Perceiving Risks in Organisations .............................................................................................. 25 2.3.2 Cultural Factors Influencing Risk Perceptions in Organisations .......................................... 26 2.3.3 Technical Aspects of ERM Interacting with Organisation Arrangements.......................... 28 2.4 Understanding Organisations: A Neo-Institutionalist Perspective ............................................. 30 2.4.1 Neo-Institutional Pressures and Organisational Legitimacy .................................................. 30 2.4.2 Explaining Practice Variation: Decoupling, Institutional Logics and Pluralism, and Organisational Identities ......................................................................................................................