business ethics unit V reflection paper

RESEARCH PAPER

Stakeholders’ approaches to disaster risk reduction

in built environment S. Mohammad H. Mojtahedi

School of Civil Engineering, The University of Sydney, Sydney, Australia, and

Bee Lan Oo Faculty of Built Environment, The University of New South Wales,

Sydney, Australia

Abstract

Purpose – In disaster risk reduction (DRR), it is important to realise stakeholders’ approaches against disasters in the built environment. The purpose of this paper is to explore why stakeholders take proactive and/or reactive approaches in DRR. Design/methodology/approach – Using a review of existent literature, this work scrutinises disaster theories and their applications in the built environment to develop a theoretical framework for perceiving stakeholders’ proactive and/or reactive approaches in DRR. Findings – Stakeholders’ organisational attributes – power, legitimacy and urgency – and decision- making paradigms – value maximisation and intuitive reasoning – are fundamental factors affecting stakeholders’ approaches against disasters. Power and legitimacy of stakeholders result in a proactive approach if stakeholders consider value maximisation paradigm in their decision-making process. Powerful and legitimate stakeholders may take reactive approaches because of intuitive reasoning paradigm. Stakeholders may shift from a reactive to proactive approach and vice versa based on the combination of urgency attribute and decision-making paradigms. Research limitations/implications – It is essential to consider the classification of respective stakeholders in applying the idea of this paper. Furthermore, this paper does not attempt to validate the proposed theoretical framework empirically, but it combines stakeholder and decision-making theories by which this could be undertaken. Originality/value – Little attention has been paid to systematic theorising in managing stakeholders’ approaches against disasters. Furthermore, many researchers have focused on similar underlying theories and heuristics in the context of DRR. Thus, this paper introduces a theoretical framework to examine stakeholders’ proactive and/or reactive approaches in the built environment, by synthesising stakeholder and decision-making theories.

Keywords Disaster risk reduction, Socio-economic, Built environment, Disaster approach, Disaster theories, Stakeholder attributes

Paper type Conceptual paper

Introduction Stakeholders’ approaches towards disasters refer to activities such as mitigation, preparedness, response and recovery, which are planned and conducted before, during and after disasters (Peek and Mileti, 2002; Altay and Green, 2006; Moe and Pathranarakul, 2006). They represent stakeholders’ proactive and reactive intent to manage disasters by employing decision-making mechanisms involving a combination of stakeholders’ institutional attributes, socio-economic and the built environment exposures. Scholars have dedicated considerable attention to the study of disaster impacts on socio-economic and the built environment conditions (e.g. Alexander, 1997; Bosher, 2008; Hunt and Watkiss, 2010).

The current issue and full text archive of this journal is available at www.emeraldinsight.com/0965-3562.htm

Disaster Prevention and Management Vol. 23 No. 4, 2014 pp. 356-369 r Emerald Group Publishing Limited 0965-3562 DOI 10.1108/DPM-11-2013-0209

356

DPM 23,4

However, there are two issues that suggest further conceptual development is needed in this research domain. First, there is a lack of stakeholders’ awareness before, during and after disasters (Perry and Lindel, 1978; Pearce, 2003; Bosher et al., 2007). Despite the detrimental impacts of disasters, Bosher et al. (2009) noted that there is still insufficient evidence that key stakeholders are playing a proactive role in mitigating disasters in the built environment and hazard awareness is absent from their decision- making process. However, far too little attention has been paid to systematic theorising in managing stakeholders’ approaches against disasters. Second, many researchers have focused on similar underlying theories and heuristics in the context of disaster management (DM) (McEntire, 2004; Sementelli, 2007). For example, crisis and chaos theory has become an increasingly fundamental underpinning theory for scholars to support their research on DM context (Pauchant and Douville, 1993; Pearson and Mitroff, 1993; Shrivastava, 1993; Pearson and Clair, 1998; Ritchie, 2004). Furthermore, the research to date has tended to fall into the realm of decision rules, procedures and policies applying similar theories rather than integrating other administrative theories to address stakeholders’ approaches and decisions before, during and after disasters.

Using a review of existent literature, this study explores and expounds upon the stakeholders’ approaches in disaster risk reduction (DRR). We have scrutinised disaster theories and their applications in the built environment and have encountered the following research question:

RQ1. What are the stakeholders’ attributes and decision-making paradigms that influence stakeholders’ proactive and/or reactive approaches in DRR.

Drawing upon the literature review, we proposed a theoretical framework in answering this research question using stakeholder theory and decision-making theory. First, we adopt Freeman (1984) and Mitchell et al. (1997) contention that power, legitimacy and urgency are stakeholders’ attributes, which contribute to stakeholder identification and management. Second, we use value maximisation and intuitive reasoning paradigms developed by Von Neumann and Morgenstern (1945) and Tversky and Kahneman (1974), respectively, to address decision-makers’ approaches towards choosing different alternatives in an administrative context. Finally, we synthesise stakeholder and decision- making theories to bring the role of stakeholders and their decisions for proactive and/or reactive approaches in DRR into the context of the built environment. In this paper, we focus on disasters as a general concept which covers natural, technological and man-made hazards. It should be noted that the focus of this study is on DRR rather that DM. DRR is the systematic development of mandates, strategies and practices with the purpose of minimising vulnerabilities and disaster impacts throughout society and environment (UNISDR, 2004). DRR encompasses preparedness, mitigation, response and recovery activities to reduce the impacts of disasters and to develop resilient environment (IPCC, 2012) and it has stronger connotations with proactive and reactive approaches. The focus of DM, on the other hand, is mostly on response and recovery phases which for many scholars have connotations of “reactive” approaches to dealing with disasters (Moe and Pathranarakul, 2006). The proposed theoretical framework forms a foundation for further empirical work in DRR in the built environment.

Conceptual underpinnings of disasters Overview of disaster theories and their applications There is a substantial amount of theories used for theorising disasters in the literature. Administrative and leadership theories have been fundamental pillars for building

357

Stakeholders’ approaches

to DRR

organisational capabilities through crisis management activities (Boin and Hart, 2003; Wooten and James, 2008). Paraskevas (2006) used complexity theory to introduce a complexity-informed framework for the design of an effective organisational crisis response system in disastrous situations. Moreover, disaster studies need to be expanded to incorporate a political administrative perspective on crises management (Rosenthal and Kouzmin, 1997). Stallings (2002) claimed that sociological theory including conflict theory, political sociology and the application of Max Weber’s political sociology, could provide precious insights in disaster studies, because the structure of society, which is hidden in everyday affairs, are vulnerable to disasters. Gotham (2007) used critical theory to explore the processes and conflicts over efforts to present tragic events as spectacles, focusing on a case study of the Hurricane Katrina disaster. Interestingly, there has been significant emphasis on DRR studies in the tourism industry from proactive pre-crisis planning through strategic implementation over the past decade (Faulkner, 2001; Ritchie, 2004; Hystad and Keller, 2008).

Sementelli (2007) reviewed extensive literature on theories of disasters by focusing on a concern for tools and a process to categorise them into four groups as: decision theories; administrative theories; economic theories; and social theories. Decision theories apply approaches to disaster by using a series of stages, steps, heuristics or procedures to cope with disasters. Administrative theories, in contrast, have a great tendency to emphasise on processes as well as tools. Economic theories tend not to focus on process or tactical outcomes, but instead present abstraction to cope with long-term economic impacts of disasters. Finally, social theories try to tackle disaster predicaments by process-oriented actions. He urges that substantial advancements should be made in the realm of theory development and theorising in disasters and crises, and suggests that decision and administrative theories can and most likely could get managers to an acceptable solution to the problem.

Crisis theory has become an increasingly dominant theoretical pillar for scholars to support their research on DM and DRR context (Pauchant and Douville, 1993; Pearson and Mitroff, 1993; Pearson and Clair, 1998; Ritchie, 2004). Shrivastava (1993) identified urgency of decision, large impacts and system restrictions as fundamental characteristics of crisis. Parsons (1996) suggested three types of crises as:

(1) immediate crisis: little or no warning exists;

(2) emerging crises: sluggish developing; and

(3) sustained crises: long-lasting duration.

Ritchie (2004) argued that strategies to deal with these three different crisis situations would vary depending on time pressure, the extent of control and the magnitude of these incidents. Crisis management theory is a holistic process involving prevention, planning, acute response, recovery and learning (Boin and McConnell, 2007). However, there are some limitations in applying crisis management theories in DM and DRR perspectives (Kumar, 2000; McConnell and Drennan, 2006; Boin and McConnell, 2007) including: first, preventing all disasters are simply impossible; second, there are political, cognitive, informational, cultural and resource barriers to being able to prevent every possible threat; third, contingency planning is not able to solve all problems or make all situations better; and fourth, crisis management cannot cover all phases of a DM and DRR. Among the above-mentioned theories, crisis theory has been the most popular theory in DRR context. Although stakeholders who are involved in DRR should be systematically analysed and anticipated in disasters (Hsu et al., 2004;

358

DPM 23,4

Bosher et al., 2007), there is little evidence of borrowing ideas from stakeholder theory in the previous studies of DRR and DM. Also, despite the variety of applications of theories to DRR and DM, there has been little attention paid to the built environment.

Disaster theories and the built environment Built environment and the construction industry play a significant role in having a resilient society (Bosher, 2008; Haigh and Amaratunga, 2010). The term “built environment” refers to the products and processes made by humans for their activities. Built environment is a combination of facilities and infrastructure systems that people use as a core foundation for developing a society (Vanegas, 2003). Designing and building a resilient built environment needs profound understanding of the expertise and knowledge of avoiding and mitigating the impact of disasters (Lorch, 2005; Bosher, 2008). According to Haigh and Amaratunga (2010), the discipline of the built environment plays a key role in the development of society’s resilience to disasters. They claimed that a suitable theoretical framework to explore the interaction between the built environment, its disciplines and the DRR process is highly required.

The built environment can itself results in disasters, particularly in places where building codes and planning regulations are not conducted very well (Ofori, 2004). With socio-economic progress, the built environment becomes more vulnerable to disasters in terms of community loss, and economic and infrastructure damages (Menoni, 2002; Bosher, 2008). Bartuska and Young (1994) categorised the significance of the built environment in the context of disasters into four groups as:

(1) built environment is an extensive area which covers all human needs;

(2) built environment is a product of human’s mind and purposes;

(3) built environment protect us from disasters and change the environment for our comfort; and

(4) all built environment elements contribute either negatively or positively to the overall quality of environment.

Few scholars have applied theories and paradigms to DRR and DM in the built environment. These theories include: practice-based theory and a theory-based practice (Gillespie and Streeter, 1987), planning perspective (Perry and Lindel, 1978) and emergency management theory (McEntire, 2001; McEntire et al., 2002). Although it is noted that the most frequently used theory is the emergency management theory, it does not seem to provide a solid foundation to guide the development of disaster preparedness tools; furthermore, emergency management theory has two fundamental problems for developing disaster response tools as follows: first, it explains about emergency situations but not disasters and second, the focus on emergency makes the field reactive and limits its applicability for proactive approach.

Numerous researchers have claimed doubt on the theoretical disciplinary development for the built environment (e.g. Betts and Lansley, 1993; Loosemore, 1999; Knight and Ruddock, 2009; Brandon and Lombardi, 2010); increasingly, DRR is still an under developed area in the built environment. There is a need to relate practice and theory by using human-centred approaches (Janssen et al., 2010). Haigh and Amaratunga (2010) presented an integrative review of the literature to explore the nature of the built environment discipline’s potential role in the development of society’s resilience to disasters. Their review supports the calls for a multi-sectoral and interdisciplinary approach to DRR. They discovered that development of theoretical

359

Stakeholders’ approaches

to DRR

framework for DRR in the built environment is highly necessary. The first step towards theoretical development in the built environment involves amalgamation and juxtaposition of an interdisciplinary strategy for DRR through buildings, spaces and places. A suitable theoretical framework should explore the interaction between the built environment, its disciplines and the DRR process. Furthermore, it is important to understand the nature of the stakeholders involved in creation and maintenance of the built environment towards theoretical development, because stakeholders have a vital role to play in effective disaster planning (Haigh and Amaratunga, 2010).

Theoretical framework The context for this study is the stakeholders’ approaches to DRR in the built environment. Figure 1 depicts a proposed framework of proactive and/or reactive approaches by stakeholders for DRR in the built environment. The following discussion provides the theoretical justification for the conceptualisation.

Society, economic and built environment are at risk from the impacts of hazards associated with climate change. Disasters affect socio-economic and built environment conditions not only in developing countries but also in developed countries (Nicholls, 2004; Wilby, 2007). Stakeholders’ approaches towards disasters in order to reduce the consequences of disasters are firmly recommended in the built environment (Moe and Pathranarakul, 2006; Bosher et al., 2009). It is obvious that disasters have direct and indirect impacts on society, economy and the built environment. It is noted that the focus of most previous studies of disasters is on socio-economic and built environment conditions separately (Bosher, 2008; Hunt and Watkiss, 2010). Thus, there is a need to consider socio- economic and built environment exposures simultaneously. The significance of the proposed theoretical framework in this paper is to develop a theoretical framework that combines socio-economic and the built environment exposures in DRR perspective while considering stakeholders’ proactive and/or reactive approaches to managing disasters.

Stakeholders’ approaches and DRR in the built environment Stakeholders, whether they are individuals or groups, choose how to cope with disasters in their natural, society and the built environment (Peek and Mileti, 2002). This notion used decision-making theories to justify that stakeholders behave acceptably, but not often optimally, based on their limited knowledge and within constraints set by the social system in which they live (Simon, 1991). Stakeholders are becoming increasingly frustrated not only with being excluded from the decision-making process, but also with being excluded from DM planning (Rubin and Barbee, 1985; Pearce, 2003).

Although there are two approaches to tackling disasters – proactive and reactive approaches – most studies have claimed that stakeholders often resolve the predicaments

Disaster

Exposures

Built environment

Socio-economic

Stakeholder approach

Proactive approach:

Mitigation

Preparedness Reactive approach:

Response

Recovery

Stakeholder attributes

Power Legitimacy Urgency

Decision-making paradigms

Value maximisation Intuitive reasoning

•

•

•

•

•

• •

• •

• •

Figure 1. Theoretical framework of stakeholders’ disaster approaches in the built environment

360

DPM 23,4

arisen in disasters by reactive approaches (Loosemore and Hughes, 1998; Brilly and Polic, 2005; Bosher et al., 2009). It is also noted that few studies exist on stakeholders’ approaches towards DRR in the built environment. Loosemore (1998) investigated reactive crisis management in construction projects. Brilly and Polic (2005) studied a case in Slovenia to provide an integrated flood mitigation decision-making process with considering stakeholders’ approaches. Moe et al. (2007) proposed a balanced scorecard technique considering proactive and reactive approaches to provide a continuous assessment of performance in each life-cycle phase in DM projects. Bosher et al. (2009) claimed that there is a need to proactively address strategic weaknesses in maintaining the built environment from a range of disasters. They also emphasised that there is still insufficient evidence that key construction stakeholders are playing an active role in DRR.

Proactive approach Moe and Pathranarakul (2006) refers a proactive approach to those activities such as mitigation and preparedness that are planned and conducted before disasters by stakeholders in order to tranquilise the adverse impacts of disasters effectively. Mitigation refers to structural and non-structural activities aimed at eliminating and reducing the probability and consequences of disasters in the environment, society and infrastructure facilities before a disaster occurs. Mitigation activities attempt to keep hazards away from society and the built environment by constructing resilient infrastructures and developing practical managerial measures. Preparedness activities include developing emergency procedures and stakeholder institutional capability taken in advance to ensure effective response to the impact of disasters. This includes developing warning systems, identifying evacuation routes and shelters, maintaining emergency supplies and communication systems and conducting disaster exercises to train and educate personnel, citizens and community leaders (Peek and Mileti, 2002; Altay and Green, 2006; Moe and Pathranarakul, 2006). They concluded that a high-level proactive approach towards disaster helps us to reduce deaths, injuries, property damage and loss of dollars.

Reactive approach In contrast, responses and recovery activities which are conducted by stakeholders during and after disasters is called reactive approach (Moe and Pathranarakul, 2006). Response refers to the activities taken immediately during and following a disaster. The main aim of effective response to disaster is to save the community and minimise damages. Activating the emergency operation plan and centres, evacuation and sheltering of victims, searching, rescuing and medical care are some examples of response activities (Peek and Mileti, 2002). On the other hand, recovery activities involve rehabilitation (short- term) and reconstruction (long-term) endeavours aim at restoring vital support systems and returning life to normal. This includes the rebuilding of residential and non-residential buildings, roads and bridges and infrastructure and coordinating governmental activities (Peek and Mileti, 2002; Altay and Green, 2006; Moe and Pathranarakul, 2006). Stakeholders often take reactive approaches to managing disasters (Loosemore and Hughes, 1998; Brilly and Polic, 2005; Bosher et al., 2009).

Integration of theories into the conceptual framework Stakeholder theory and attributes Any kind of entity can be a stakeholder in managing disasters. Local people, groups, organisations, institutions, societies and even the natural environment are generally thought to qualify as actual or potential stakeholders. For the first time, Freeman

361

Stakeholders’ approaches

to DRR

(1984) borrowed the notion of memo from Stanford Research Institute in 1963 to define stakeholder. The memo defined that a stakeholder is an entity without whose support the institution would not survive. Although there have been a few other stakeholder definitions, the latest describes a stakeholder as someone who has input in the decision making as well as who benefits from the results of the decision makings (Phillips et al., 2003). In Freeman (1984) stakeholder theory, power, legitimacy and urgency are the three distinctive stakeholder attributes. The power of a stakeholder allows them to mobilise social and political forces and to withdraw resources from an organisation (Post et al., 2002; Olander, 2007). Legitimacy gives opportunity to a stakeholder to abide some sort of beneficial or harmful risk pertinent to an organisation. Urgency is a degree to which a stakeholder claims call for immediate attention (Mitchell et al., 1997; Olander, 2007). These suggest that power, legitimacy and urgency cause them to take proactive or reactive approaches in a decision-making process. Stakeholder theory amalgamates power, legitimacy and urgency attributes to propose dynamism in the systematic identification of stakeholders (Olander, 2007). By utilising the stakeholder theory, we can identify pivotal stakeholders for DRR in the built environment; consequently, this theory helps us prioritise stakeholders by considering power, legitimacy and urgency attributes. Power and legitimacy help stakeholders to bring about the outcomes they desire; hence, these attributes are very crucial for stakeholders to take proactive approaches against disasters in the built environment. In other words, a combination of power and legitimacy can create authority for stakeholder’s organisations to take proactive responses independently. For a reactive approach, however, urgency helps stakeholders to respond in a timely fashion during or after disasters.

In order to distinguish key stakeholders in the built environment for DRR, it is important to categorise stakeholders into different groups based on power, legitimacy and urgency attributes. Mitchell et al. (1997) classified and defined stakeholders into seven main groups as: dormant stakeholders; discretionary stakeholders; demanding stakeholders; dominant stakeholders; dangerous stakeholders; dependent stakeholders; and definitive stakeholders. Although dormant stakeholders have little or no interaction with an organisation, they possess the power to impose their wills on an organisation. Discretionary stakeholders hold the attributes of legitimacy, but they do not have enough power to affect an organisation’s decisions. Demanding stakeholders possess urgent claims but having neither power nor legitimacy. Dominant stakeholders have enough power and legitimacy to direct a firm’s decision-making process. Coercive behaviours among dangerous stakeholders make them dangerous to an organisation. Dependent stakeholders depend upon others for the power necessary to conduct their decisions. Lastly, definitive stakeholders have enough power and legitimacy to mandate their claims in an organisation. A generic set of stakeholders in managing disasters in the built environment would include local government, prime (general) contractors, subcontractors, suppliers, architects/designers, structural and civil engineers, urban planners, emergency relief organisations, financial institutions, insurance companies and the affected local community (Moe and Pathranarakul, 2006; Bosher et al., 2009).

Although some other organisational theories also cover the concepts of power and legitimacy, most of them tell us about the role of power and legitimacy independently, but those theories do not explain stakeholder classification and do not justify why power and legitimacy are important factors in defining stakeholders’ approaches. Furthermore, urgency is not a main focus of any organisational theory (Mitchell et al., 1997). Therefore, stakeholder theory overshadows the other organisational theories in terms of considering all stakeholders’ attributes in an integrated framework.

362

DPM 23,4

Apart from stakeholders’ attributes, decision-making process can definitely influence stakeholders to migrate from proactive to reactive approach, or vice versa. Harrison et al. (2010) claimed that the stakeholder theory should consider the decision-makers’ roles, their decisions and who takes advantages of the outcomes of those decisions. In the next section, we explain how the decision-making theory can affect the stakeholders’ approaches towards disasters in the built environment.

Decision-making theory and paradigms In a decision-making process, one is supposed to choose one or some choices over different alternatives while considering deficiency of knowledge and uncertainty about the future (Shih et al., 2007). Decision theories have been the imperative pillar for theorising about crises and disasters. Decision theories emerged from the study by many researchers particularly Simon (1945/1976), Allison and Zelikow (1971) and Cohen et al. (1972). Context of perception, information access and data quality have been the main research areas using decision theories in disasters and crises (Sementelli, 2007). The kind of decision making with which this body of theory deals is as follows: given the two possible approaches in DM, into either one of which a stakeholder may put himself, the stakeholder chooses proactive in preference to reactive (or vice versa). The theory of decision making is a theory about how to predict such decisions (Edwards, 1954). Prospect theory introduced by Kahneman and Tversky (1979) significantly advanced decision-making theory by considering the theory of risky choices. This theory enriches value maximisation paradigm by addressing three principles: expectation; asset integration; and risk aversion. All above mentioned theories in decision making have utilised two decision-making paradigms, namely, value maximisation paradigm and intuitive reasoning paradigm (Ariely, 2009). Those two paradigms help us realise stakeholders’ behavioural approaches against disasters, albeit the domain of decision theory is extensive including different attributes and paradigms such as risk perception, uncertainty and complexity (Sementelli, 2007). The first paradigm assumes that humans have a tendency to maximise the value of selected alternatives based on their desires. The latter paradigm assumes that decisions by humans are influenced by complicated factors. Therefore, in value maximisation paradigms, people have rational behaviour but in intuitive reasoning paradigms humans might involve irrelevant factors in their decision-making process (Levy, 1992; Ariely, 2009). We do not have enough formal models for estimating the probabilities of events such as; the result of an election, the future value of money, the impacts of disasters and so on. In this, an intuitive reasoning paradigm is the only practical method for assessing uncertainty (Tversky and Kahneman, 1983). Based on the concept of expected utility, the value maximisation paradigm proposes that a decision maker will choose the alternative that maximises the weighted factors obtained by utility functions. Von Neumann-Morgenstern Theory, under the value maximisation paradigm, explains that a person or unity is rational if, and only if, their behaviour maximises the expected value of the set of possible outcomes (Von Neumann and Morgenstern, 1945).

The notion of decision theories in realising why stakeholders make different decisions in coping with disasters has not been evaluated adequately in the literature. Little is known about the benefits of different paradigms involved in the stakeholders’ decision-making process in different DRR phases. More importantly, a decision-making theory facilitates the selection of appropriate exposures and pertinent variables in the development of stakeholder disaster approaches strategies.

363

Stakeholders’ approaches

to DRR

Discussion on decision-making paradigms, stakeholders’ attributes and approaches Although the application of decision theory in DRR is quite clear, it offers little from the perspective of theory development. This may due to the fact that the field of DRR is still in its infancy and developing (Sementelli, 2007). In answering our research question, a combination of stakeholder theory and decision-making paradigms would probably open the avenue for justification of why stakeholders take proactive and/or reactive approaches in reducing disaster risk in the built environment.

We designed this study to determine why stakeholders have different approaches to disasters. For this, we reviewed previous studies pertinent to disaster theories to find the answer for our research question. The most interesting finding was that the stakeholder theory has not been evaluated in a DRR context. Furthermore, decision- making theory plays an indispensable role to justify why different stakeholders take different approaches towards disasters. Power is the key attribute to affecting the stakeholders’ decision making, and legitimacy is another important attribute which supports stakeholders to take risks in their decision making (Olander, 2007). Figure 2 presents the intersection of stakeholders’ attributes and decision-making paradigms.

It is obvious that the power and legitimacy of stakeholders does not guarantee a proactive approach. This phenomenon happens because of the fact that power and legitimacy do not necessarily lead to noticeable decisions by stakeholders (Mitchell et al., 1997). Power and legitimacy of stakeholders result in a proactive approach if stakeholders consider a value maximisation paradigm in their decision-making process. In other words, they opt for mitigation and preparedness activities before disasters in order to minimise the negative consequences of disasters. Although power and legitimacy attributes of stakeholders help them to take proactive approaches against disasters, they might be reactive by involving irrational decisions in their strategies based on intuitive reasoning paradigms, which is another role player in their decision-making process. Urgency is the third stakeholders’ attribute, which contributes to migration from a reactive to a proactive approach and vice versa in DRR. Mitchell et al. (1997) argued that time sensitivity and criticality are two criteria arisen from urgency. Time sensitivity defines the degree to which stakeholders delay in approaching to claims or disasters before events. Criticality is the importance of claims

Value maximisation

paradigm

Intuitive reasoning paradigm

Reactive

approach Proactive

to reactive

Reactive to

proactive

Proactive

approach

Power/legitimacy Urgency

Figure 2. Matrix of decision-making paradigms with stakeholders’ attributes

364

DPM 23,4

or disaster activities. If stakeholders prioritise the claims in the wrong order, their decisions lead to a reactive approach based on intuitive reasoning paradigms. In supporting our proposed theoretical framework, we have combined stakeholder theory and decision-making paradigms for justification of why stakeholders take proactive and/or reactive approaches in DRR. By reviewing previous studies, we found that classification of stakeholders which was introduced by Freeman (1984) and later developed by Mitchell et al. (1997) has significant role in determining why stakeholders have different approaches to disasters. This is because of the nature of stakeholder theory which suggesting that the relative importance of stakeholders in the decision- making process depends on the stakeholders’ attributes (Mitchell et al., 1997). On the other hand, decision-making theory assumes that humans have a tendency to maximise the value of selected alternatives based on their desires (Tversky and Kahneman, 1983). However, decisions by humans are influenced by complicated factors. Therefore, stakeholders have rational behaviour in their decision-making process but in some cases they might involve irrelevant factors in selecting alternatives (Von Neumann and Morgenstern, 1945; Levy, 1992; Ariely, 2009). Based on the above mentioned theories, Olander (2007) argued that there is a necessary obligation to the powerful and legitimate stakeholders to proactively manage the decisions they have made. In spite of the fact that powerful and legitimate stakeholders most likely have a tendency towards taking a proactive approach in DRR, they might take a reactive approach because of intuitive reasoning paradigm involving in their decision-making process. Furthermore, stakeholders may attempt to maximise the value of their decisions in emergency cases in order to learn how to be proactive instead of taking a reactive approach (McEntire, 2001). Urgent stakeholders are able to shift from a reactive approach to more proactive behaviour if they consider value maximisation paradigms in their decision making. Stakeholders behave acceptably, but not often optimally, based on their limited knowledge and within constraints set by the social system in which they live (Simon, 1991); hence, they might shift from proactive to reactive approach because of urgency and intuitive reasoning paradigm. It is therefore important to note that the validity of the proposed theoretical framework should be studied empirically in future for final justification.

Research limitations and suggestions for further studies There are some concerns and limitations in the proposed theoretical framework, which suggest the directions for future studies. First, it is recognised that concerns and priorities of stakeholders change over time, and different stakeholders might respond to changing circumstances differently (Post et al., 2002). Second, proactive approaches vary among different types of stakeholders depending on their primary goals (Mileti and Sorensen, 1990; Drabek and Hoetmer, 1991). Hence, one should consider the classification of respective stakeholders in applying the idea depicted in Figure 2. Third, in some cases there are conflicts between stakeholders and decision-making theories, whereas stakeholder theory deals with many objectives, decision-making theories particularly value maximisation paradigm to direct stakeholders to serve single objectives (Jensen, 2010). Finally, this paper has not utilised empirical evidence for evaluating the validity of the proposed theoretical framework.

Conclusion This paper proposes a theoretical framework to examine stakeholders’ proactive and/or reactive approaches to DRR in the built environment, by synthesising two theories – stakeholder theory and decision-making theory. Central to the framework is

365

Stakeholders’ approaches

to DRR

disaster that affects socio-economic and the built environment conditions. Power and legitimacy of stakeholders result in a proactive approach if stakeholders consider value maximisation paradigms in their decision-making process. However, powerful and legitimate stakeholders are not always able to take a proactive approach because they may make a wrong decision based on the intuitive reasoning paradigm. Urgency is another stakeholders’ attribute that plays like a double-edged sword in DRR. This attribute can mislead stakeholders to shift from a proactive approach to reactive behaviour by including intuitive reasoning in their decisions. On the other side of the coin, urgency can pave the way for less proactive stakeholders to migrate from response and recovery activities to mitigation and preparedness activities by considering value maximisation paradigms in their built environment DRR strategies. Finally, stakeholder prioritisation based on the stakeholders’ attributes and classification can be used as a planning and evaluation tool for: first, a direct comparison of different stakeholders’ approaches against disasters; second, high-level DRR planning decisions; and third, the development of proactive stakeholder DRR procedures.

This paper offers three theoretical contributions. First, it advocates the need to consider both socio-economic and built environment exposures simultaneously in DRR study. Second, it adopts an integrated theoretical approach – incorporating stakeholder theory, decision-making theory. Third, it introduces a matrix that combines stakeholders’ attributes and decision-making paradigms to explain the selection of proactive and/or reactive approaches among stakeholders in DRR in the built environment.

References

Alexander, D. (1997), “The study of natural disasters, 1977-97: some reflections on a changing field of knowledge”, Disasters, Vol. 21 No. 4, pp. 284-304.

Allison, G.T. and Zelikow, P. (1971), Essence of Decision, Longman, Boston, MA.

Altay, N. and Green, W.G. (2006), “OR/MS research in disaster operations management”, European Journal of Operational Research, Vol. 175 No. 1, pp. 475-493.

Ariely, D. (2009), Predictably Irrational, Revised and Expanded Edition: The Hidden Forces that Shape our Decisions, Harper Collins, New York, NY.

Bartuska, T.J. and Young, G.L. (1994), The Built Environment: Creative Inquiry into Design and Planning, Crisp Publications, Menlo Park, CA.

Betts, M. and Lansley, P. (1993), “Construction management and economics: a review of the first ten years”, Construction Management and Economics, Vol. 11 No. 4, pp. 221-245.

Boin, A. and Hart, P.t. (2003), “Public leadership in times of crisis: mission impossible?”, Public Administration Review, Vol. 63 No. 5, pp. 544-553.

Boin, A. and McConnell, A. (2007), “Preparing for critical infrastructure breakdowns: the limits of crisis management and the need for resilience”, Journal of Contingencies and Crisis Management, Vol. 15 No. 1, pp. 50-59.

Bosher, L. (2008), Hazards and the Built Environment: Attaining Built-In Resilience, Routledge, New York, NY.

Bosher, L., Dainty, A., Carrillo, P. and Glass, J. (2007), “Built-in resilience to disasters: a pre-emptive approach”, Engineering, Construction and Architectural Management, Vol. 14 No. 5, pp. 434-446.

Bosher, L., Dainty, A., Carrillo, P., Glass, J. and Price, A. (2009), “Attaining improved resilience to floods: a proactive multi-stakeholder approach”, Disaster Prevention and Management, Vol. 18 No. 1, pp. 9-22.

Brandon, P. and Lombardi, P. (2010), Evaluating Sustainable Development in the Built Environment, Wiley-Blackwell, Oxford.

366

DPM 23,4

Brilly, M. and Polic, M. (2005), “Public perception of flood risks, flood forecasting and mitigation”, Natural Hazards and Earth System Science, Vol. 5 No. 3, pp. 345-355.

Cohen, M.D., March, J.G. and Olsen, J.P. (1972), “A garbage can model of organizational choice”, Administrative Science Quarterly, Vol. 17 No. 1, pp. 1-25.

Drabek, T.E. and Hoetmer, G.J. (1991), Emergency Management: Principles and Practice for Local Government, International city management association, Washington, DC.

Edwards, W. (1954), “The theory of decision making”, Psychological Bulletin, Vol. 51 No. 4, pp. 380-417.

Faulkner, B. (2001), “Towards a framework for tourism disaster management”, Tourism Management, Vol. 22 No. 2, pp. 135-147.

Freeman, R.E. (1984), Strategic Management: A Stakeholder Approach, Pitman Publishing imprint, Boston, MA.

Gillespie, D.F. and Streeter, C.L. (1987), “Conceptualizing and measuring disaster preparedness”, International Journal of Mass Emergencies and Disasters, Vol. 5 No. 2, pp. 155-176.

Gotham, K.F. (2007), “Critical theory and Katrina: disaster, spectacle and immanent critique”, City, Vol. 11 No. 1, pp. 81-99.

Haigh, R. and Amaratunga, D. (2010), “An integrative review of the built environment discipline’s role in the development of society’s resilience to disasters”, International Journal of Disaster Resilience in the Built Environment, Vol. 1 No. 1, pp. 11-24.

Harrison, J.S., Bosse, D.A. and Phillips, R.A. (2010), “Managing for stakeholders, stakeholder utility function, and competitive advantage”, Strategic Management Journal, Vol. 74 No. 1, pp. 58-74.

Hsu, E.B., Jenckes, M.W., Catlett, C.L., Robinson, K.A., Feuerstein, C., Cosgrove, S.E., Green, G.B. and Bass, E.B. (2004), “Effectiveness of hospital staff mass-casualty incident training methods: a systematic literature review”, Prehospital and Disaster Medicine, Vol. 19 No. 3, pp. 191-200.

Hunt, A. and Watkiss, P. (2010), “Climate change impacts and adaptation in cities: a review of the literature”, Climatic Change, Vol. 104 No. 1, pp. 13-49.

Hystad, P.W. and Keller, P.C. (2008), “Towards a destination tourism disaster management framework: long-term lessons from a forest fire disaster”, Tourism Management, Vol. 29 No. 1, pp. 151-162.

IPCC (2012), “Managing the risks of extreme events and disasters to advance climate change adaptation: special report of the intergovernmental panel on climate change”, in Field, C.B., Barros, V., Stocker, T.F. and Dahe, Q. (Eds), Cambridge University Press, Cambridge, pp. 27-56.

Janssen, M., Lee, J., Bharosa, N. and Cresswell, A. (2010), “Advances in multi-agency disaster management: key elements in disaster research”, Information Systems Frontiers, Vol. 12 No. 1, pp. 1-7.

Jensen, M.C. (2010), “Value maximization, stakeholder theory, and the corporate objective function”, Journal of Applied Corporate Finance, Vol. 22 No. 1, pp. 32-42.

Kahneman, D. and Tversky, A. (1979), “Prospect theory – analysis of decision under risk”, Econometrica, Vol. 47 No. 2, pp. 263-291.

Knight, A. and Ruddock, L. (2009), Advanced Research Methods in the Built Environment, John Wiley & Sons, Oxford.

Kumar, J. (2000), “Disaster management and social development”, International Journal of Sociology, Vol. 20 No. 7, pp. 66-81.

Levy, J.S. (1992), “An introduction to prospect-theory”, Political Psychology, Vol. 13 No. 2, pp. 171-186.

Loosemore, M. (1998), “The three ironies of crisis management in construction projects”, International Journal of Project Management, Vol. 16 No. 3, pp. 139-144.

367

Stakeholders’ approaches

to DRR

Loosemore, M. (1999), “A grounded theory of construction crisis management”, Construction Management & Economics, Vol. 17 No. 1, pp. 9-19.

Loosemore, M. and Hughes, W. (1998), “Reactive crisis management in constructive projects – patterns of communication and behaviour”, Journal of Contingencies and Crisis Management, Vol. 6 No. 1, pp. 23-34.

Lorch, R. (2005), “What lessons must be learned from the tsunami?”, Building Research & Information, Vol. 33 No. 3, pp. 209-211.

McConnell, A. and Drennan, L. (2006), “Mission impossible? Planning and preparing for crisis1”, Journal of Contingencies and Crisis Management, Vol. 14 No. 2, pp. 59-70.

McEntire, D.A. (2001), “Triggering agents, vulnerabilities and disaster reduction: towards a holistic paradigm”, Disaster Prevention and Management, Vol. 10 No. 3, pp. 189-196.

McEntire, D.A. (2004), “Development, disasters and vulnerability: a discussion of divergent theories and the need for their integration”, Disaster Prevention and Management, Vol. 13 No. 3, pp. 193-198.

McEntire, D.A., Fuller, C., Johnston, C.W. and Weber, R. (2002), “A comparison of disaster paradigms: the search for a holistic policy guide”, Public Administration Review, Vol. 62 No. 3, pp. 267-281.

Menoni, S. (2002), “Lifelines earthquake vulnerability assessment: a systemic approach”, Soil Dynamics and Earthquake Engineering, Vol. 22 No. 9, pp. 1199-1208.

Mileti, D.S. and Sorensen, J.H. (1990), “Communication of emergency public warnings”, Landslides, Vol. 1 No. 6, pp. 52-70.

Mitchell, R.K., Agle, B.R. and Wood, D.J. (1997), “Toward a theory of stakeholder identification and salience: defining the principle of who and what really counts”, Academy of Management, Vol. 22 No. 4, pp. 853-886.

Moe, T.L. and Pathranarakul, P. (2006), “An integrated approach to natural disaster management success factors”, Disaster Prevention and Management, Vol. 15 No. 3, pp. 396-413.

Moe, T.L., Gehbauer, F., Senitz, S. and Mueller, M. (2007), “Balanced scorecard for natural disaster management projects”, Disaster Prevention and Management, Vol. 16 No. 5, pp. 785-806.

Nicholls, R. (2004), “Coastal flooding and wetland loss in the 21st century: changes under the SRES climate and socio-economic scenarios”, Global Environmental Change, Vol. 14 No. 1, pp. 69-86.

Ofori, G. (2004), “Construction industry development for disaster prevention and response”, 2nd International Conference on Post-Disaster Reconstruction: Planning for Reconstruction, Coventry, 22-23 April.

Olander, S. (2007), “Stakeholder impact analysis in construction project management”, Construction Management and Economics, Vol. 25 No. 3, pp. 277-287.

Paraskevas, A. (2006), “Crisis management or crisis response system?: A complexity science approach to organizational crises”, Management Decision, Vol. 44 No. 7, pp. 892-907.

Parsons, W. (1996), “Crisis management”, Career Development International, Vol. 1 No. 5, pp. 26-28.

Pauchant, T.C. and Douville, R. (1993), “Recent research in crisis management: a study of 24 authors’ publications from 1986 to 1991”, Organization & Environment, Vol. 7 No. 1, pp. 43-66.

Pearce, L. (2003), “Disaster management and community planning, and public participation: how to achieve sustainable hazard mitigation”, Natural Hazards, Vol. 28 Nos 2-3, pp. 211-228.

Pearson, C.M. and Clair, J.A. (1998), “Reframing crisis management”, Academy of Management Review, Vol. 23 No. 1, pp. 59-76.

Pearson, C.M. and Mitroff, I.I. (1993), “From crisis prone to crisis prepared: a framework for crisis management”, The Academy of Management Executive, Vol. 7 No. 1, pp. 48-59.

368

DPM 23,4

Peek, L.A. and Mileti, D.S. (2002), “The history and future of disaster research”, in Bechtel, R.B. and Churchman, A. (Eds), Environmental Psychology, John Wiley & Sons, New York, NY, pp. 511-524.

Perry, R.W. and Lindel, M.K. (1978), “The psycological consequences of natural disaster: a review of research on American communities”, Mass Emergencies, Vol. 3 Nos 2-3, pp. 105-115.

Phillips, R., Freeman, R.E. and Wicks, A.C. (2003), “What stakeholder theory is not”, Business Ethics Quarterly, Vol. 13 No. 1, pp. 479-502.

Post, J.E., Preston, L.E. and Sauter-Sachs, S. (2002), Redefining the Corporation: Stakeholder Management and Organizational Wealth, Stanford University Press, San Francisco, CA.

Ritchie, B.W. (2004), “Chaos, crises and disasters: a strategic approach to crisis management in the tourism industry”, Tourism Management, Vol. 25 No. 6, pp. 669-683.

Rosenthal, U. and Kouzmin, A. (1997), “Crises and crisis management: toward comprehensive government decision making”, Journal of Public Administration Research and Theory, Vol. 7 No. 2, pp. 277-304.

Rubin, C.B. and Barbee, D.G. (1985), “Disaster recovery and hazard mitigation: bridging the intergovernmental gap”, Public Administration Review, Vol. 45, January, pp. 57-63.

Sementelli, A. (2007), “Toward a taxonomy of disaster and crisis theories”, Administrative Theory & Praxis, Vol. 29 No. 4, pp. 497-512.

Shih, H.-S., Shyur, H.-J. and Lee, E.S. (2007), “An extension of TOPSIS for group decision making”, Mathematical and Computer Modelling, Vol. 45 No. 7, pp. 801-813.

Shrivastava, P. (1993), “Crisis theory/practice: towards a sustainable future”, Organization & Environment, Vol. 7 No. 1, pp. 23-42.

Simon, H.A. (1945/1976), Administrative Behavior, Cambridge University Press, Cambridge.

Simon, H.A. (1991), “Bounded rationality and organizational learning”, Organization Science, Vol. 2 No. 1, pp. 125-134.

Stallings, R.A. (2002), “Weberian political sociology and sociological disaster studies”, Sociological Forum, Vol. 17 No. 2, pp. 281-305.

Tversky, A. and Kahneman, D. (1974), “Judgment under uncertainty: heuristics and biases”, Science, Vol. 185 No. 4157, pp. 1124-1131.

Tversky, A. and Kahneman, D. (1983), “Extensional versus intuitive reasoning: the conjunction fallacy in probability judgment”, Psychological Review, Vol. 90 No. 4, pp. 293-315.

UNISDR (2004), Living with Risk: A Global Review of Disaster Reduction Initiatives, UNISDR, New York, NY.

Vanegas, J.A. (2003), “Road map and principles for built environment sustainability”, Environmental Science & Technology, Vol. 37 No. 23, pp. 5363-5372.

Von Neumann, J. and Morgenstern, O. (1945), “Theory of games and economic behavior”, Bull. Amer. Math. Soc, Vol. 51 No. 7, pp. 498-504.

Wilby, R.L. (2007), “A review of climate change impacts on the built environment”, Built Environment, Vol. 33 No. 1, pp. 31-45.

Wooten, L.P. and James, E.H. (2008), “Linking crisis management and leadership competencies: the role of human resource development”, Advances in Developing Human Resources, Vol. 10 No. 3, pp. 352-379.

Corresponding author S. Mohammad H. Mojtahedi can be contacted at: [email protected]

To purchase reprints of this article please e-mail: [email protected] Or visit our web site for further details: www.emeraldinsight.com/reprints

369

Stakeholders’ approaches

to DRR

Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.