Risk Taking
Introduction
Although risk-taking has been a rather minor area of study for the last twenty years, increasing numbers of people today are concerned with risk-taking as it relates to learning. Hutchinson, (1978) pointed out the risk-taken behavior is persistence in a task ( a game of chance) regardless of whether a reward results. Continuing performance in this task is considered as an indication of risk-taking tendency.

It appears then the any definition of risk-taking must take into account both the situation and the personality of the risk-taker. The situation of the risk-taker includes such factors as the nature of the risk-taking task, the motivation provided by that task, and the risk-taker's interaction with other people either a group witch may be involved in the risk-taking decision or society as a whole. The personality of the risk-taker includes a myriad of factors sex, age, profession, values, anxiety level, and creativity --- which affect the risk-taking disposition.

How to develop a risk-taking spirit:

  • Evaluate whether or not youíve taken enough risks in your life
  • Ask others to rate you on a scale from 1 to 5 on how much of a risk taker you are (E.g. Parents, friends, peers, boss)
  • Practice taking risks in a variety of situations (E.g. School, volunteering, work, financial etc)

    Why do People Engage in Risky Behavior at Work?

  • They donít perceive the risk
  • They do perceive the risk, but also perceive some benefit from taking the risk
  • Risk taking attitude
    The Gambler- this individual is lucky because they rely on his/her gut to make risky decisions. This is not proper risk management, this is gambling!

    The Risk-Averse- this individual has a hard time making decisions because he/she spends too much time analysing the situation and as a result misses out on opportunities

    The Sure Loser- this individual has adopted a very negative approach and is resistant to any change. He/she is constantly trying to avoid risks at all costs. The problems they ignore eventually blow up in their face.

    The Effective Risk Taker- this individual is able to manage risk and make good decisions by confronting the facts, assessing the impact and weighing their options

    Risk taking perception
    There are 3 principles that govern the perception of risk

      1. Feeling in control

    • Voluntary vs. involuntary risks
    • Involuntary risks are situations where we believe we have little control over the situation are perceived as having greater risk
    • Voluntary risks are situations we believe we have some control over are perceived as less risky
    • Example: Car Trip v. Plane Trip

      2. Size of the possible harm

    • Risks that involve greater possible harm are perceived as greater than those involving less harm
    • Even if the less harmful events are more likely
    • Example: Tornado v. Kitchen Fire

      3. Familiarity with the risk

    • Risks that are less familiar are perceived as being greater than more familiar risks
    • Example: Nuclear plant accident vs. Food poisoning

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