The importance of risk-taking in business ventures has been emphasised by many. Attempts to distinguish entrepreneurs on their risk-taking propensity have produced conflicting results. Data on two measures of risk-taking propensity were collected from entrepreneurs, prospective entrepreneurs and non-entrepreneur others. While the groups did not differ significantly on risk-taking propensity as measured by the Choice Dilemma Questionnaire, entrepreneurs and prospective entrepreneurs differed significantly from others on the Magnitude of Loss Questionnaire. Similarly, entrepreneurial aspirants differed significantly from the nonentrepreneur group. These results highlight the significance of loss, an important aspect in risk-taking, which is often ignored in entrepreneurial and managerial studies. The riskiness in business ventures which has been the main stumbling block for many is not the low probability of success but the high stakes involved in entrepreneurship.
The Choice Dilemma Questionnaire (CDQ) has been extensively used in risk taking studies due to its ease of administration and its ability to consistently produce risky shifts. However despite its wide use, it has been subject to a number of criticisms. This study attempts to see if
the CDQ score is factorially pure or if it is made up of sub- scales. Responses from two hundred and two students were factor analysed and it was found that four factors emerged. The study concludes that risk-taking is a multidimensional concept and one needs to take into account the different
types of risks if we are to use risk-taking propensity as a personality measure while studying individual differences.
It is generally believed that managers are more risk-taking than others. However, researchers have 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 risk-taking propensity. Managers, non-managerial employees, and MBA students from different organizations in Madras were administered the CDQ and modified Risk-in-Basket. Results of ANOVAs and chi-square analyses show that managers, potential managers (MBA students), and non-managerial employees do not differ significantly in risk-taking as measured by the instruments used. It is concluded that managers may be attributed higher risk-taking due to their ability and that what is really expected from our managers is successful risk-taking, rather than more risk-taking.
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