Perceiving and managing business risks: differences between entrepreneurs and bankers
Date of Original Version
Abstract or Description
We compared entrepreneurs with bankers in their perception and management of a variety of risks. Problems included financial risk, risk to human life and health, and risk of a natural disaster. Cluster analysis and content analysis of think-aloud protocols revealed surprising details. Entrepreneurs accept risk as given and focus on controlling the outcomes at any given level of risk; they also frame their problem spaces with personal values and assume greater personal responsibility for the outcomes. Bankers focus on target outcomes — attempting to control risk within structured problem spaces and avoiding situations where they risk higher levels of personal responsibility.
Journal of Economic Behavior & Organization, 33, 2, 207-225.