Risk minimization and profit maximization in market economies

Executive Summary
Amidst scarce resources and unlimited needs, it is imperative for law enforcement and criminal justice organizations to allocate resources efficiently. The budgeting process must ensure resources are allocated to the most critical or pressing areas (Doss, Guo & Lee, 2012). There are proposals by the state government to cut the police department’s operations budget. If not well thought out, the proposed budget cuts may hinder the organization from realizing its goals and objectives. It is imperative for the state government to be properly aware of the forces that influence the law enforcement market. Cutting the budget at a time when there is increased demand for law enforcement services is not a sensible thing to do. Crime levels in the city have increased significantly in the last few years. This has meant deployment of more police officers, addition of equipment and facilities (e.g. police cars), and even more rigorous training for police officers in an effort to enhance their crime management skills. In fact, the funds the police department currently gets from the state government are barely enough to cover the increased needs. There have also been challenges to do with insufficient personnel and equipment. While cost minimization is crucial for any organization, whether in the private or public sector, this is certainly not the time to cut the budget. With a reduced budget, the police department will be at a much greater disadvantage in terms of fulfilling its mandate, especially in the wake of increased crime in the city. Increased crime means increased demand for law enforcement personnel or services. The increased demand must be accompanied by a corresponding increase in the supply of law enforcement personnel as well as police equipment and facilities. Without balancing supply and demand, the city will be unable to address the problem of growing crime, which could eventually affect social and economic aspects within the city. Effective law enforcement is indeed a crucial ingredient of socioeconomic prosperity within a community. The need for balanced supply and demand further stems from competition within the police department. The department has several competing needs, including personnel recruitment and training, crime prevention, community policing, personnel wellness, materials and equipment, emergency response, and criminal investigations. All these needs are equally vital in ensuring public safety (Mitchell & Casey, 2007). Each of the needs must be carefully considered in the budget to ensure the limited resources are efficiently distributed across the needs. This is particularly important given the financial constraints faced by the department and the state government at large. Overall, the proposal to slash the police department’s budget may have severe implications on the organization. It will disrupt equilibrium with respect to supply and demand, making it quite difficult for the department to fulfill its goals and objectives. The proposal may negatively affect critical performance metrics such as call response time, emergency response time, on-duty time, and crime rate. It is prudent, therefore, for decision makers within the state government not to proceed with the proposed budget cut. The current state of the market in terms of supply and demand does not favor a budget. In fact, a larger budget is needed if the department is to successfully respond to the growing need for law enforcement services.


References
Doss, D., Guo, C., & Lee, J. (2012). The business of criminal justice: A guide for theory and practice. Boca Raton: CRC Press.
Mitchell, M., & Casey, J. (2007). Police leadership and management. Annandale, NSW: The Federation Press.