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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 you’ve 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 don’t 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