Performance Measures and Security Risk Management: a Hong Kong Example
| Author | Ahmed Shafiqul Huque,Brian Brewer |
| Published date | 01 March 2004 |
| Date | 01 March 2004 |
| DOI | 10.1177/0020852304041232 |
| Subject Matter | Journal Article |
International
Review of
Administrative
Sciences
Performance measures and security risk management:
a Hong Kong example
Brian Brewer and Ahmed Shafiqul Huque
Abstract
Public agencies have an important role in establishing and ensuring a secure
environment for business operations. Risk management decisions by international
business enterprises can be informed usefully by performance data related to the
services provided by a host country’s law enforcement agencies. As recent public
sector reforms have emphasized the development of indicators and the measure-
ment of performance in public organizations, such as the police, this has made it
possible for businesses to use these data to enhance the quality of their decisions
about security needs related to both personnel and property. This article reviews the
number of emergency calls received by the Hong Kong police and their response
time and examines what inferences can be drawn from these data. Such an analysis
highlights the need to compare and contrast different performance measures to
obtain a comprehensive view of an agency’s performance before making critical
business decisions.
Introduction
Good information is the lifeblood of an effective business organization and can be
crucial in determining whether a course of action will result in an outstanding success,
a mediocre accomplishment or outright failure. In recent years many public agencies,
operating in different national and sub-national political jurisdictions, have developed
performance measurement systems capable of producing increasingly sophisticated
data to assist both program managers and government policy-makers in their
decision-making.
Brian Brewer is an Associate Professor in the Department of Public and Social Administration at the
City University of Hong Kong. Ahmed Shafiqul Huque is Visiting Professor at the Institute on
Globalization and the Human Condition at McMaster University, Canada. CDU: 65.012.3(512.317)
Copyright © 2004 IIAS, SAGE Publications (London, Thousand Oaks, CA and New Delhi)
Vol 70(1):77–87 [DOI:10.1177/0020852304041232]
02_RAS 70_1 articles 2/27/04 1:00 PM Page 78
78 International Review of Administrative Sciences 70(1)
Although a major impetus for their development has been a desire to achieve
better accountability and enhanced productivity in the public sector (Halachmi, 2002),
these data, which are now often readily accessible in the public domain, can also
assist business managers to make better quality decisions. This article focuses on
data generated by the police that can be used to assist in making risk management
decisions about security issues. The discussion begins by outlining the nature of risk
management and moves on to examine key principles of performance measurement
using examples drawn from the work of police agencies. These are then applied to
the specific area of risk management. The focus then shifts to identify some specific
performance indicators published by Hong Kong’s police force and how these may
assist business managers in making decisions about security issues for their firms. The
objective is to demonstrate the implications of effective performance measurement
in public agencies and the resultant data for the promotion of a sound business
environment.
The nature of risk management
Risk is a constant feature of existence. It constitutes ‘a condition in which there is a
possibility of an adverse deviation from a desired outcome that is expected or hoped
for’ (Vaughan, 1997: 8). The risks faced by businesses can range from economic
downturn and adverse market conditions to losses arising from fire, theft and corrupt
practices. Each contingency may generate financial losses that undermine businesses
in achieving what must, no matter what other objectives are pursued, be regarded as
the primary objective — namely maximizing profits.
The primary means businesses use to manage risk are loss prevention and control.
Losses due to theft may be reduced or even eliminated by employing a contingent
of security guards supported with a sophisticated burglar alarm system. In some
cases, a degree of loss is inevitable, so controlling loss becomes the most important
consideration. Losses arising from a fire can be minimized by installing a sprinkler sys-
tem even though some loss will be sustained, not least because of water damage
caused by the sprinkler system itself.
Obviously businesses want to operate in an environment as safe as possible and
an important consideration must be the costs associated with different kinds of risks.
Regardless of the kind of risk management strategy adopted, business managers
must ensure that both fixed and recurrent costs balance positively against the poten-
tial losses associated with particular safety and security issues. Greater environmental
risks translate into higher expenses for businesses.
However, when, for example, security issues are considered, the sharing of loss
prevention and control responsibilities between private firms and public agencies
give businesses an opportunity to reduce their direct costs. If there is a shortfall in the
timely and effective provision of public security services then businesses face greater
risk, which they must endeavour to reduce by using more sophisticated technology
or by engaging additional security personnel, either as firm employees or on a con-
tract basis from private security firms. When businesses have information to boost
their confidence in the capacity of public agencies to deliver loss prevention and con-
trol services effectively, they can lessen their own security measures.
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Brewer and Huque Performance measures and security risk management 79
All organizations must determine risk levels and what strategies are most appro-
priately adopted to handle different degrees of risk. Security measures, including
insurance costs, may be reduced if businesses are confident about the ability of the
police in the community where they operate to respond, in a timely manner, to any
summons for help. Firms operating in overseas jurisdictions may also be concerned
to know that expertise and technology are on a par with what is available in their
home country and that the host national police will perform their duties without any
additional monetary inducements being required.
Individual managers need to consider the characteristics of the political, economic
and social environment within which their businesses operate when making deci-
sions about risk management. Western business enterprises with overseas bases
often confront social norms considerably at odds with anything they have experi-
enced previously in their home country. For example, as recently as the 1960s and
1970s, businesses in Hong Kong functioned in an environment in which corruption
was endemic. Extra payment was required both to ensure action was taken (such as
putting out a fire) and to prevent the consequences of non-action (police demanding
‘protection’ money to ensure businesses were not harmed). Though corrupt practices
may not have had such a significant...
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