Risk construction at a public hearing: an application of socio-cultural theories into organizational risk

Abstract

This study poses the question of how different stakeholders construct or give meaning to an organizational project as an organizational risk. The goal is to analyze the meaning construction process by applying socio-cultural theories to an empirical organizational setting, and extend and enrich organizational research and theory on risk. The research setting is a public hearing into a proposal for drilling a sour oil well within a residential area in Edmonton, Alberta. First, the study develops a multi-faceted perspective on the process of giving meaning to organizational risk, which complements and extends the existing insights in organizational literature. It provides theoretical insights into how social actors define risk boundaries, how they refer to common and different social rationalities to understand risk, how they use rational and ritualistic risk management instruments, how they engage in relations of communication, power, legitimacy, and individualization to interpret risk, and how societal and institutional contexts affect risk meanings. Second, the study applies socio-cultural theories into an empirical organizational setting where social actors interpret risks produced by an organization and shows the potential of these theories for organizational risk research. The study indicates that the concepts derived from these theories can be used as sensitizing frameworks to analyze and elaborate on organizational risk and to ground the theories in empirical settings and data. Third, the study highlights inequalities between different social actors in their capacity to participate in settings like public hearings where they give meaning to and decide on risks produced by organizations, and the consequences of those inequalities in terms of risk distribution for different social actors and society at large. The study shows that public hearings in Alberta should be radically transformed to allow effective participation and representation of public stakeholders as well as deliberation on organizational projects and risks. Business practitioners should develop ongoing relations with local public stakeholders for effective risk management.