Risk Taking: A Managerial Perspective

✍ Scribed by Zur Shapira

• Publisher: Russell Sage Foundation
• Year: 1995
• Tongue: English
• Leaves: 181
• Category: Library

✦ Synopsis

Classical economic theory assumes that people in risk situations follow a course of action based on a rational, consistent assessment of likely outcomes. But as Zur Shapira demonstrates in Risk Taking, corporate managers consistently stray from the prescribed path into far more subjective territory. Risk Taking offers a critical assessment of the relationship between theory and action in managerial decision making. Shapira offers a definitive account of the classical conception of risky decision making, which derives behavioral prescriptions from a calculation of both the value and the likelihood of possible outcomes. He then demonstrates how theories in this vein have been historically at odds with empirical observations. Risk Taking reports the results of an extensive survey of seven hundred managers that probed their attitudes and beliefs about risk and examined how they had actually made decisions in the face of uncertainty. The picture that emerges is of a dynamic, flexible process in which each manager's personal expertise and perceptions play profound roles. Managerial strategies are continually modified to suit changing circumstances. Rather than formulating probability estimates, executives create potential scenarios based not only on the possible outcomes but also on the many arbitrary factors inherent in their own situations. As Shapira notes, risk taking propensities vary among managers, and the need to maintain control and avoid particularly dangerous results exercises a powerful influence. Shapira also examines the impact of organizational structure, long-term management objectives, and incentives on decision making. With perceptive observations of the cognitive, emotional, and organizational dimensions of corporate decision making, Risk Taking propels the study of managerial risk behavior into new directions. This volume signals the way toward improving managerial decision making by revealing the need for more inclusive choice models that augment classical theory with vital behavioral observations.

✦ Table of Contents

Cover
Title page, Copyright, Dedication
Contents
List of Tables, Figures, and Appendixes
Preface and Acknowledgments
Chapter 1. The Role of Risk in Decision Making
Chapter 2. Characteristics of Risk and Risk Taking
Chapter 3. The Study: Methods and Participants
Chapter 4. The Definition of Risk
Chapter 5. Attitudes Toward Risk
Chapter 6. Dealing With Risk
Chapter 7. Cognitive Aspects of Risk Taking
Chapter 8. Incentives and Risk Taking
Chapter 9. On the Prospects for Improving Managerial Risk Taking
Epilogue
References
Appendixes
Index