Determinants of Managerial Risk: Exploring Personality and Cultural Influences

A risk-assessment instrument using 10 business scenarios that varied the risk dimensions of outcome uncertainty, personal exposure, outcome potential, and personal expectations was used to test the effects of individual risk preferences on managerial risk propensity among 285 Indian managers in India and Singapore. Additionally, the effects of individual and organizational characteristics on managerial risk preferences were measured. Blockwise regression analysis revealed that the following groups of managers were significantly more willing than others to take risks: male managers, managers in India, managers with more modern cultural values, managers working in organizations with higher perceived risk willingness, managers with a higher need for achievement, and Type A managers. Individual risk willingness preferences were also found to influence managerial beliefs about the perceived riskiness of risk-related decisions.