IDEAS home Printed from https://ideas.repec.org/a/oup/indcch/v17y2008i3p427-466.html
   My bibliography  Save this article

Organizational risk taking: adaptation versus variable risk preferences

Author

Listed:
  • Jerker Denrell

Abstract

The observed association between performance and organizational risk taking has usually been attributed to the influence of performance on risk preferences. Here I show how a simple model of adaptation, which only assumes that organizations avoid activities with poor past performance, can explain the empirically observed U-shaped association between risk and return. The model also makes novel predictions, which are shown to be consistent with the data. The findings suggest that risk taking may be a by-product of adaptation rather than a deliberate choice motivated by variable risk preferences. Copyright 2008 , Oxford University Press.

Suggested Citation

  • Jerker Denrell, 2008. "Organizational risk taking: adaptation versus variable risk preferences," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(3), pages 427-466, June.
    • Handle: RePEc:oup:indcch:v:17:y:2008:i:3:p:427-466
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/icc/dtn007
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Inseong Song & Jonghoon Bae, 2016. "Politics, strong institution and competitive advantage: an examination of organizational aspiration for competition," Computational and Mathematical Organization Theory, Springer, vol. 22(4), pages 412-443, December.
    2. Johannes G. Jaspersen & Richard Peter, 2017. "Experiential Learning, Competitive Selection, and Downside Risk: A New Perspective on Managerial Risk Taking," Organization Science, INFORMS, vol. 28(5), pages 915-930, October.
    3. Jaspersen, Johannes G. & Montibeller, Gilberto, 2020. "On the learning patterns and adaptive behavior of terrorist organizations," European Journal of Operational Research, Elsevier, vol. 282(1), pages 221-234.
    4. Bae, Joonhyung & Ozmel, Umit, 2024. "The interplay between product development failures and alliance portfolio properties in the formation of exploration versus exploitation alliances," Journal of Business Research, Elsevier, vol. 177(C).
    5. Jerker Denrell & Christina Fang & Chengwei Liu, 2015. "Perspective—Chance Explanations in the Management Sciences," Organization Science, INFORMS, vol. 26(3), pages 923-940, June.
    6. Yan Li & Neal M. Ashkanasy, 2019. "Risk adaptation and emotion differentiation: An experimental study of dynamic decision-making," Asia Pacific Journal of Management, Springer, vol. 36(1), pages 219-243, March.
    7. Situmeang, Frederik B.I. & Gemser, Gerda & Wijnberg, Nachoem M. & Leenders, Mark A.A.M, 2016. "Risk-taking behavior of technology firms: The role of performance feedback in the video game industry," Technovation, Elsevier, vol. 54(C), pages 22-34.
    8. Farrukh Mahmood & Robert M. Kunst, 2023. "Modeling nonlinear in Bowman’s paradox: the case of Pakistan," Empirical Economics, Springer, vol. 64(5), pages 2357-2372, May.
    9. David Maslach, 2016. "Change and persistence with failed technological innovation," Strategic Management Journal, Wiley Blackwell, vol. 37(4), pages 714-723, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:indcch:v:17:y:2008:i:3:p:427-466. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://academic.oup.com/icc .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.