Institutional Risk Management: Roles of Consistency and Accountability

In late modern times, understanding “institutional risk perception†has become increasingly important (Freudenburg and Pastor 1992), and studies have been conducted to examine how various institutions amplify and attenuate risks (Rothstein 2003; Tezuka 2006). This paper focuses on a sexual harassment accusation raised by a female journalist against a top governmental bureaucrat in Japan in 2018. Rather than focusing on individuals, the analysis centers on how the institutions involved, TV Asahi and the Ministry of Finance (MOF, hereinafter), managed this crisis. The paper analyzes the sequence of various measures taken by these organizations, distinguishing inward- and outward-looking risks (Crandall, Parnell, and Spillan 2010). It argues that the attenuation measures the MOF adopted to alleged scandals increased public perception of risk and enhanced its crisis since its crisis management lacked consistency, changing schemes several times depending on criticisms they get. On the other hand, TV Asahi needed to face more inward-looking risk, verifying the adequacy of the organization’s response previously taken to the journalist when she consulted about the harassment incidents with her superior. Both institutions exhibited a lack of consistency and accountability, which are two important values for effective institutional risk management.