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It is generally believed that managers are more risk-taking than others. However research has shown managers to be both risk-averse and risk-seeking, depending on the target performance or reference points. The present study is an attempt to see if managers differ from others in risktaking propensity. Managers, non-managerial employees and MBA students from different organisations in Madras were administered the CDQ and modified Risk-in-Basket. Results of ANOVA and Chi-square analysis show that managers, potential managers (M.B.A. students), and non-managerial employees do not differ significantly in risk-taking as measured by the instruments used. The study concludes on the note that managers may be attributed higher risktaking due to their ability and that what is really expected from our managers is successful risktaking, rather than more risk-taking.
Managerial risk-taking is a topic of interest because the impact of managerial decisions can be far reaching (be it in politics, education or business). Important managerial decisions take place under conditions of incomplete information, and managers have to recognize the risks invovled when evaluating alteratives. While normative theory suggests that information should be gathered till costs outweigh the benefits, requirements of expediency often make it necessary to decide with available information. In such situations, the manager's risk-taking propensity can play an important part.
Research has shown (Brown, 1965), that risk-taking is valued by society and that most people consider themselves more risk-taking than the average (Levinger & Schnider, 1969). Managers also rate themselves more highly on risk-taking than the average (March & Shapira, 1988) and consider risk-taking as an important managerial function. Swalm (1966) in his study of 32 business executives found them "risk-averse" - meaning that executives would not recommend a project with a 50-50 chance of making Rs. 250,000 or losing Rs. 50,000. This was interpreted to mean that the lower levels screen out all proposals except the low-risk, low-gain type, and that the top decision-makers never get to rule on many potentially desirable opportunities. Swaim concludes "If the decision-makers interviewed are at all representative of U.S. executives in general, our managers are surely not the takers of risk so often alluded to in the classical defense of the capitalistic system."
McCelland (1961) has reported that achievement motivation is an important aspect of the managerial personality, and...