Risk-Taking
People differ in their willingness to take chances. Matthew
Barrett, the former CEO and chair of Bank of Montreal, and
Frank Stronach, chair of Magna International (and the sub-
ject of Case Incident—“Frank Stronach, Risk-Taker and Fair
Enterprise Creator” on the CD-ROM that accompanies this
textbook), are good examples of high risk-takers. The ten-
dency to assume or avoid risk has been shown to have an
impact on how long it takes managers to make a decision
and how much information they require before making their
choice. For instance, 79 managers worked on simulated exer-
cises that required them to make hiring decisions.^59 High
risk-takingmanagers made more rapid decisions and used
less information in making their choices than did the low
risk-taking managers. Interestingly, the decision accuracy
was the same for both groups.
While it is generally correct to conclude that managers in
organizations are risk-aversive,^60 there are still individual dif-
ferences within this dimension.^61 As a result, it makes sense to
recognize these differences and even to consider matching risk-
taking tendencies with specific job demands. For instance, high
risk-taking might lead to higher performance for a stock trader
in a brokerage firm because that type of job demands rapid
decision making. On the other hand, a willingness to take risks
would not be suitable for an accountant who performs audit-
ing activities. Organizations also send messages about how
much risk is tolerated. Some managers convey to employees
that they will be punished if they take risks that fail. This can dampen one’s natural risk-
taking tendencies. If you are interested in determining where you stand on risk-taking,
you might want to complete Learning About Yourself Exercise #5on pages 63–64.
Type A and Type B Personalities
Do you know any people who are excessively competitive
and always seem to be pushed for time? If you do, it’s a
good bet that those people have a Type A personality.
An individual with a Type A personality is “aggressively
involved in a chronic, incessant struggle to achieve more
and more in less and less time, and, if required to do so,
against the opposing efforts of other things or other per-
sons.”^62 In North American culture, such characteristics
tend to be highly prized and positively associated with ambition and the successful
acquisition of material goods.
Type As- Are always moving, walking, and eating rapidly
- Feel impatient with the rate at which most events take place
- Strive to think or do two or more things at once
- Cannot cope with leisure time
- Are obsessed with numbers, measuring their success in terms of how many or
how much of everything they acquire
Chapter 2Perception, Personality, and Emotions 49Richard Branson’s tendency to take risks aligns with his job
demands as an entrepreneur. Branson, founder and chairman of
London-based Virgin Group, starts risky ventures that compete
against industry giants. His Virgin Atlantic airline, for example,
has taken market share from British Airways and has earned a rep-
utation as one of the financially healthiest airlines in the world.
Branson’s risk-taking personality extends to his leisure activities of
speedboat racing, skydiving, and ballooning.risk-taking A person’s willingness
to take chances or risks.Do you think it is
better to be a Type A
or a Type B
personality?* Type A personality A personality
with aggressive involvement in a
chronic, incessant struggle to
achieve more and more in less and
less time and, if necessary, against
the opposing efforts of other things
or other people.