TITLE

TESTING A CAUSAL MODEL OF CORPORATE RISK TAKING AND PERFORMANCE

AUTHOR(S)

Bromiley, Philip

PUB. DATE

March 1991

SOURCE

Academy of Management Journal;Mar1991, Vol. 34 Issue 1, p37

SOURCE TYPE

Academic Journal

DOC. TYPE

Article

ABSTRACT

The determinants of organizational risk taking and its impact on economic performance are critical issues in strategic management. Using a model that included risk, performance, performance expectations and aspirations, slack, and industry performance, this research addressed how past performance and other factors influence risk taking and how risk taking and other factors influence future performance. Not only did poor performance appear to increase risk taking-risk taking appeared to result in further poor performance, even when past performance, industry performance, and organizational slack were controlled. Overall, the results favor a model in which low performance and lack of slack drive risk taking, but the risks taken have poor returns.

ACCESSION #

4404015

Tags: DECISION making;  INDUSTRIAL management;  RISK management in business;  STRATEGIC planning;  MANAGEMENT science;  RISK assessment;  RISK-taking (Psychology);  ORGANIZATIONAL behavior;  FINANCIAL performance;  RATE of return

 

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