Reputational risk in public sector organizations: A case study on the Danish Export Credit Agency

Nina Juul Andersen

Student thesis: Master thesis

Abstract

The thesis at hand is motivated by the lack of theory on reputational risk in public sector organization and poses the research question: For a public sector organization like the Danish Export Credit Agency, how should reputational risk be measured, what is the importance of it, and how should it be managed? To answer this, the thesis searched for the answer by analyzing existing data on stakeholder management and reputational risk, identifying and interviewing eight external stakeholders in an inductive, case-­‐based design as well as recommending steps to follow in reputational risk management. The stakeholders were interviewed about four specific cases that may have hurt EKF’s reputation due to the performance of the organization in these specific situations. The thesis found that the method of measuring reputational risk using the stakeholders’ perceptions may be a possible way but also shows that reputational risk management may not play a crucial role for public sector organizations. In sum, I conclude: o As regular measurements of reputation and therefore risk to it is not an available measuring tool, stakeholder perception can help measure reputational risks to a public sector organization. These organizations cannot measure book and market value. o In general, stakeholders have higher expectations to public sector organizations than corporations due to the fact that they operate under the Danish state as well as are funded partly through taxes. o There seems to exist a paradox though. The actual performance of the organization did not influence the relationship between the stakeholders and the organization although the organization is accused of breaking the law and standards for export credit agencies. o A neutral reputation may not be appropriate for EKF. Although it will make it possible to go below the media radar while still maintaining good relations with other stakeholders, it poses some limitations due to EKF’s minimal role in the Danish public sector and unknown role in society at large as well as a need for customer revenue. o Furthermore, a bad reputation should at any case be avoided as this only costs the organization a lot of resources, which public sector organizations in general have a lack of. o It is therefore recommended that EKF ensures proper knowledge of their stakeholders, like identification of their needs, demands, and perceptions of the organization, as well as how they evaluate EKF and the organization’s performance.

EducationsMSc in International Business and Politics, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2011
Number of pages103