Strategic risk behaviour and its temporalities: between risk propensity and decision context

Abstract

What are the determinants of strategic risk behaviour? Are they the dispositional characteristics of decision makers or the situational constraints? Or both? The empirical evidence is on all sides. We believe the issue has not been satisfactorily resolved so far because of the continued neglect of the fundamental role of time in risk behaviour. Given that risk is embedded in time, we need to recognize two critical aspects of the temporal dimension. The first is concerned with risk horizons, as in short‐range and long‐range risk horizons. The second temporal aspect relates to individual future orientations of the top managers, as in near‐future and distant‐future orientations. We propose in this article a temporal framework of strategic risk behaviour in which the two temporalities are integrated with risk propensity and perceived decision context. We then develop, based on this temporal framework, the contingent answers for the relative roles of dispositional characteristics and situational constraints in determining strategic risk behaviour.

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