Managerial Risk Taking: A Multi-Theoretical Review and Future Research Agenda

Forthcoming, Journal of Management

49 Pages Posted: 16 Sep 2016 Last revised: 2 Dec 2016

See all articles by Robert Hoskisson

Robert Hoskisson

Rice University

Francesco Chirico

Macquarie University, Macquarie Business School; Jonkoping University - Jonkoping International Business School (JIBS)

J. Daniel Zyung

Southern Methodist University (SMU) - Strategy & Entrepreneurship Department

Eni Gambeta

Rice University

Date Written: September 11, 2016

Abstract

Managerial risk taking is a critical aspect of strategic management. To improve competitive advantage and performance, managers need to take risks, often in an uncertain environment. Formal economic assumptions of risk taking suggest that if the expected values for two strategies are similar but one is a greater gamble (uncertain), managers will choose the strategy with a more certain outcome. Based on these assumptions, agency theory assumes that top managers should be compensated or monitored to achieve better outcomes. We review the theory and research on agency theory and managerial risk taking along with theories that challenge this basic assumption about risk taking: the behavioral theory of the firm, prospect theory, the behavioral agency model and the related socio-emotional wealth perspective, and upper echelons theory. We contribute to the literature by reviewing and suggesting research opportunities within and across these theories to develop a comprehensive research agenda on managerial risk taking.

Suggested Citation

Hoskisson, Robert and Chirico, Francesco and Zyung, J. Daniel and Gambeta, Eni, Managerial Risk Taking: A Multi-Theoretical Review and Future Research Agenda (September 11, 2016). Forthcoming, Journal of Management, Available at SSRN: https://ssrn.com/abstract=2837516

Robert Hoskisson

Rice University ( email )

6100 South Main Street
Houston, TX 77005-1892
United States

Francesco Chirico (Contact Author)

Macquarie University, Macquarie Business School ( email )

New South Wales 2109
Australia

Jonkoping University - Jonkoping International Business School (JIBS) ( email )

Jönköping, 55111
Sweden

J. Daniel Zyung

Southern Methodist University (SMU) - Strategy & Entrepreneurship Department ( email )

United States

Eni Gambeta

Rice University ( email )

6100 South Main Street
Houston, TX 77005-1892
United States

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