How Does Risk Taking Propensity Impact Firm Performance?

Abstract

Purpose

Risk taking is the foremost component of entrepreneurial orientation. As the business grows, firm faces numerous kinds of risks in terms of finance, competition, latest technology; political party and their new policies etc. These all risks may impact on the performance of the business. The paper develops a model defining the relationship of risk taking with firm’s performance and exploring the impact of former on the latter.

Design/Methodology/Approach

The study is descriptive in nature. A cross-sectional design has been adapted to demeanor the present study. Data of 500 firms has been collected through survey method. To determine the relationship between risk taking and business performance descriptive statistics and factor analysis has been used.

Findings

There is a relationship between one of the main dimension of strategic orientation i.e. risk taking propensity and in four constructs of firm’s performance.