Risk in Leadership and Management: Risk-seeking vs. Risk Averse

Abstract

The 21st century business environment is full of dangers and risk. At the same time, it is ripe with opportunities and rewards. As organizations continue to pursue opportunities and rewards with vigor, while minimizing unnecessary exposure to risk, leaders find themselves with one of two perspectives on risk: risk-seeking or risk averse. Leaders who are risk-seeking are not moved by the inherent dangers of risk, and understand risk to be a necessary part of the business landscape – and therefore engage risk head-on. Alternatively, leaders who are risk averse understand the implications of risk on the enterprise, and work to minimize, or even avoid risk altogether, or at least to the furthest extent possible. This paper examines risk from a leadership perspective. There are various types of risk that business leaders face, and those will be identified and described herein, along with a discussion of various approaches for addressing risk and how risk is manifested in the business environment. Finally, this paper will assist leaders in determining their own attitudes toward risk using various self-assessment tools.