Risk Takers in Business: Description & Effects on ... - Study.com

A risk taker is someone who risks everything in the hope of achievement or accepts greater potential for loss in decisions and tolerates ... forTeachers forSchools forWorkingScholars® forCollegeCredit LogIn SignUp Menu forWorkingScholars® forCollegeCredit Plans Plans Courses Courses FindCoursesbySubject Science Math Business Psychology History English SocialScience Humanities Spanish ProfessionalDevelopment ByEducationLevel College HighSchool MiddleSchool TestPrep PopularTests… PopularTests SAT ACT TOEFL GMAT GRE CLEP GED ASVAB RealEstate TeacherCertification… TeacherCertification AEPA CEOE CSET/CBEST FTCE GACE ILTS MTEL MTLE MTTC MoGEA/MEGA NES NYSTCE OAE Praxis RICA TExES VCLA WEST Nursing… NursingTests HESI TEAS NCLEX PAXRN CNE OtherTests… OtherTests AP ASCP ASWB Accuplacer CHSPE CTEL DSST Finance FSA HSPT ISEE MBLEx NCE PERT PHR SHSAT TASC TECEP UExcel Exploreover 4,600 videocourses BrowseAllCourses SAT ACT TOEFL GMAT GRE CLEP GED ASVAB RealEstate AEPA CEOE CSET/CBEST FTCE GACE ILTS MTEL MTLE MTTC MoGEA/MEGA NES NYSTCE OAE Praxis RICA TExES VCLA WEST HESI TEAS NCLEX PAXRN CNE AP ASCP ASWB Accuplacer CHSPE CTEL DSST Finance FSA HSPT ISEE MBLEx NCE PERT PHR SHSAT TASC TECEP UExcel Credit Credit CreditOptions CreditOptions OnlineCollegeCredit HighSchool&GED CertificatesofCompletion HowitWorks TransferCredit TransferCredit AllTransferCredit FindYourSchool CollegeCoursesforCredit TransferringCredit HowItWorks EarnTransferableCredit&GetyourDegreefast Learnmore ContactSupport Copyright LessonTranscript Instructor: JenniferLombardo Showbio JenniferLombardoreceivedbothherundergraduatedegreeandMBAinmarketingfromRowanUniversity.ShespenttenyearsinconsumermarketingforcompaniessuchasNielsenMarketingResearch,TheDialCorporationandMattelToys.SheiscurrentlyanadjunctprofessorofmarketingatRowanUniversityandasocialmediamarketingconsultant. Businessmanagersorsupervisorswhotolerateuncertaintyandenjoymakingdecisionsthathavethegreaterpotentialforlossareconsideredrisk-takers.Learnaboutthedefinitionanddescriptionofrisk-takers,thecharacteristicsofrisk-takers,risk-averseversusrisk-takingmanagers,andtheeffectsofrisktakingonbusinessorganizationalbehavior. Updated:08/31/2021 Createanaccount DefinitionofRiskTakersManagersarefacedwithmakingdecisionsthroughouttheirworkday.Somedecisionsareroutineoreasy,whileothersarecomplicatedandrisky.Certaintypesofpeopleenjoytakingrisks,whileotherspreferstabilityandareaversetoanytypeofrisk.Arisktakerissomeonewhoriskseverythinginthehopeofachievementoracceptsgreaterpotentialforlossindecisionsandtoleratesuncertainty.Incontrast,therearemanagerswhoareriskaverse,andtheychooseoptionsthatentailfewerrisksandpreferfamiliarityandcertainty.Let'stakealookatthecharacteristicsofrisktakersinanorganizationwithanexampleofasuccessfulentrepreneur'sstory. Anerroroccurredtryingtoloadthisvideo. Tryrefreshingthepage,orcontactcustomersupport. YoumustcCreateanaccounttocontinue watching Registertoviewthislesson Areyouastudentorateacher? Iamastudent Iamateacher CreateYourAccountToContinueWatching Asamember,you'llalsogetunlimitedaccesstoover84,000 lessonsinmath,English,science,history,andmore.Plus,getpracticetests,quizzes,andpersonalizedcoachingtohelpyou succeed. Getunlimitedaccesstoover84,000lessons. Tryitnow Itonlytakesafewminutestosetupandyoucancancelanytime. Alreadyregistered?Loginherefor access  Back WhatteachersaresayingaboutStudy.com Tryitnow Alreadyregistered? Loginhereforaccess Comingupnext: TypeAandTypeBPersonalitiesinOrganizations:Definition&Characteristics You'reonaroll.Keepupthegoodwork! TakeQuiz Watch NextLesson  Replay Justcheckingin.Areyoustillwatching? Yes!Keepplaying. Yournextlessonwillplayin 10seconds 0:05DefinitionofRiskTakers 0:50RiskCharacteristics 3:29RiskTakers 4:45LessonSummary Save Save Save Wanttowatchthisagainlater? LoginorsignuptoaddthislessontoaCustomCourse. LoginorSignup Timeline Autoplay Autoplay Speed Speed 35Kviews Video Quiz Course 35K views RiskCharacteristicsWillBateswasverygoodwithmathandscience.Hefelthewaswastinghistimeinhiscollegeclasses.Society'smessagewasthatacollegedegreeequaledsuccess,butWillwantedtobeabletotakeadifferentpathtoachievement.Hehadsomebasiccharacteristicsofarisktaker. Heightenedexpectations:Thisiswhenamanagerhasgoalsthatcanbeunrealisticandunattainabletosome,butwhichtherisktakerfeelsveryconfidentwilloccur.Willfeltthedrivetostarthisowntechnologybusiness.Theproductwasanadvancedcomputer.Hewasdeterminedtocreatetheprototypehimselfanddroppedoutofcollegetocompletethetask.Hedidallthepartsoftheproductdevelopmentfromdesignandoperationstoproductionandevenmarketingthefinalprototype.Heeventuallyrealizedheneededasupportteamandhiredabasicstaff.Hetreatedthestaffprofessionallybutdemandedexcellence. Constantlearning:Thisiswhenamanagerrefusestorestonhisorherpastperformance.Theyarealwaysresearching,testingandlookingtolearn.Willviewedlifeasaconstantlearningjourney.Hespentyearsdevelopinghisprototypeandnowconstantlyworksonnewtechnologicalimprovementsofhiscomputer. Embracechange:Amanagerwhoembraceschangelooksforwardtoaconstantfluxofnewinformationandisalwaystryingforimprovements.Willwaswillingtoquitcollege,whilehisfriendsweregraduatingandpursuingacareer.Helivedclosetopovertytodevelophiscomputer.Hewasalsowillingtochangehisgoalsinregardstohiscompanythroughoutitsdevelopment.Lastly,heisconstantlyalteringhiscompany'sproductlinesandintroducingnewtechnologicalgadgets. Trustinstincts:Manyrisktakersmakedecisionsbasedonbothintelligentdataandagutinstinct.It'safeelingthattheyhaveregardingadecision.Itusuallyisn'tthesafestdecisionorthemostpractical,butitcanleadtogreatriskandsuccess.WhenWillfinishedhisfirstprototype,heinvestedallofhismoneyintolaunchinghisbusiness.Ifthebusinessfailed,hewouldhavebeendestitute.Fortunately,hisgutwascorrect,andhiscomputerwasahugesuccess. Gambler:Thelasttraitisthatmostrisktakersliketogambleagainsttheoddsorriskeverything.Ifsomeonetellsthemitisnotpossible,theyautomaticallywilltrytocompletethetask.Will'sparentsconstantlynaggedhimaboutfinishingcollege.Theytoldhimthathisprototypewasasillydream.Hequicklydismissedtheirviewandforgedaheadwithhisriskyvision. Now,let'stakealookathowrisktakersaffecttheorganizationalbehaviorofbusiness. RiskTakersMostresearchshowsthatwomenandoldermeninabusinessenvironmentaremoreriskaverse.Youngermanagersarethemostrisktakers.Managersmustfluctuatebetweentakingtherightriskandtakingariskthatdestroysthecompany.Iflower-levelmanagersarediscouragedfromactingrisky,itcanhurtproductivityandcreativity.Thekeytoallowingriskisanorganizationalphilosophythatallowsfailurethroughassessedrisks.Theabilityforworkerstoutilizetheprocessoftrialanderrorcanleadtountappedideasandsuccess.Thelastkeytoharnessingriskinanorganizationistheabilitytonothaveanescalationofcommitmentsituationdevelop.Thisiswhenthereisatendencytocontinuetosupportafailingcourseofaction.Sometimesthesmartestwaytomitigateapoordecisionistoknowwhentheriskoutweighsthebenefits.Willhadanideatodevelopacomputerforpreschool-agedchildren.Heinvestedalargeamountofmoney,butthenranintosomuchcompetitionfromtoycompaniesthathedecideditwasn'tworthcommittingtoaprojectthatcouldbedesignedbyatoyfirm.Herealizedthathewasescalatinghiscommitmenttoaprojectthatcouldcausehisentirecompanytobecomebankrupt.LessonSummaryManagersarefacedwithmakingdecisionsinthebusinessworld.Somedecisionsareroutineoreasy,whileothersarecomplicatedandrisky.Certaintypesofpeopleenjoytakingrisks,whileotherspreferstabilityandareaversetoanytypeofrisk.Arisktakerissomeonewhoriskslossorinjuryinthehopeofgainorexcitementoracceptsgreaterpotentialforlossindecisionsandtoleratesuncertainty.Theyhaveheightenedexpectations,aneedforconstantlearningandanenjoymentofgambling,whilealsoembracingchangeandtrustingtheirinstincts.Tothecontrary,therearemanagerswhoareriskaverse,andtheychooseoptionsthatentailfewerrisksandpreferfamiliarityandcertainty.Risktakersandthoseemployeeswhoareriskaversecanexcelinbusiness.Theirviewsonriskcanhampertheirsuccessiftheydonotadoptamoderatestance.Therisktakersneedtobecautiousaboutescalationofcommitment.Thoseemployeesthatareriskaverseneedtolearntotrusttheirgutandtakeintelligentandwell-researchedchances.LessonOutcomeAfterviewingthislesson,oneshouldbeableto: Define'risktaker'and'riskaverse' Identifythecharacteristicsofarisktaker Understandhowamanager'sinclinationtowardriskcanaffectproductivityandsuccess Describethekeyconceptsbusinessescanemploytomoderaterisk TounlockthislessonyoumustbeaStudy.comMember. Createyouraccount Registertoviewthislesson Areyouastudentorateacher? Iamastudent Iamateacher UnlockYourEducation Seeforyourselfwhy30millionpeopleuseStudy.com BecomeaStudy.commemberandstartlearningnow. BecomeaMember Alreadyamember?LogIn  Back WhatteachersaresayingaboutStudy.com Tryitnow Alreadyregistered? Loginhereforaccess Createanaccount RiskTakersinBusiness:Description&EffectsonOrganizationalBehavior Starttoday.Tryitnow Business / Business107:OrganizationalBehavior Business107:OrganizationalBehavior 22chapters| 142lessons |13 flashcardsets {{courseNav.course.topics.length}}chapters| {{courseNav.course.mDynamicIntFields.lessonCount}}lessons |{{course.flashcardSetCount}} flashcardset{{course.flashcardSetCoun>1?'s':''}} Ch1. TheEvolutionofOrganizational... Goto TheEvolutionofOrganizationalBehavior Ch2. ManagementandOrganizational... Goto ManagementandOrganizationalBehavior Ch3. FoundationsofIndividual... Goto FoundationsofIndividualBehavior Ch4. PersonalityandBehaviorinOrganizations IntrotoPersonality 4:16 Personality-JobFitTheory:UsingTraitstoPredictWorkplaceBehavior 5:09 TheBigFivePersonalityTraits&WorkplaceBehavior 6:35 Myers-BriggsTypeIndicator(MBTI)PersonalityFramework:Strengths&Weaknesses 5:43 MachiavellianisminOrganizations:JustifyingtheMeansbytheEnds 7:01 NarcissisminOrganizations:Definition,Characteristics&EffectsontheWorkplace 7:04 RiskTakersinBusiness:Description&EffectsonOrganizationalBehavior 5:54 4:50 NextLesson TypeAandTypeBPersonalitiesinOrganizations:Definition&Characteristics Goto PersonalityandBehaviorinOrganizations Ch5. EmotionsandMoodsinthe... Goto EmotionsandMoodsintheWorkplace Ch6. AttitudesandValuesinthe... Goto AttitudesandValuesintheWorkplace Ch7. PerceptionandAttribution Goto PerceptionandAttribution Ch8. EmployeeMotivation Goto EmployeeMotivation Ch9. IndividualDecisionMakingin... Goto IndividualDecisionMakinginOrganizations Ch10. WorkforceDiversity Goto WorkforceDiversity Ch11. OrganizationalCommunicationin... Goto OrganizationalCommunicationinBusiness Ch12. GroupsandWorkTeams Goto GroupsandWorkTeams Ch13. GroupDecisionMaking Goto GroupDecisionMaking Ch14. ConflictintheWorkplace Goto ConflictintheWorkplace Ch15. LeadershipinOrganizational... Goto LeadershipinOrganizationalBehavior Ch16. LeadershipStylesinOrganizational... Goto LeadershipStylesinOrganizationalBehavior Ch17. OrganizationalStructureand... Goto OrganizationalStructureandDesign Ch18. JobDesign Goto JobDesign Ch19. OrganizationalCulture Goto OrganizationalCulture Ch20. OrganizationalChangeand... Goto OrganizationalChangeandOrganizationalBehavior Ch21. CareerManagement Goto CareerManagement Ch22. 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Apricetakerisafirmthat:a.seekstomaximizerevenueratherthanprofit,b.cannotinfluencethemarketprice,c.searchesforthebestpriceandthentakesthehighestprofitspossible,d.buysinputsforfirms. Whatcausesreputationalrisk? Trueorfalse?Managersdonotalwaysoperateinthebestinterestoftheownersbecauseownersaremorerisk-aversethanmanagers. "Entrepreneursareusuallymoderate,ratherthanhigh,risk-takers."Indicatewhetherthestatementistrueorfalse. 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