And -which is more -you'll be a Man, my son.
Rudyard KiplingThe image of the corporate executive as a bold, risk-taking, wheeler-dealer has become part of the folklore of American business. Durant, Ling, Lear are names which conjure up pictures of strategists willing to make one heap of all their profits and risk it on one project, one idea, one foray into the stock market. Yet when Sloan (1965) In recent years, interest in the importance of risk taking in strategy has grown tremendously (Bettis, 1983).Strategists' risk propensities are considered important influences on corporate strategy. Ted Turner's risk-taking nature is viewed as responsible for Turner Broadcasting's heavy borrowing to finance entry into the new field of 24 hour cable news programming (Huey, 1980). Concern is also expressed regarding how to include risk considerations in strategic decision making. Moore and Thomas (1976) describe the Rolls Royce decision to accept the ill-fated RB-211 jet engine contract with Lockheed as an instance where managers were unsure how to incorporate situational risk into their strategic plans.Strategists are aware that corporate disasters can occur if risk is handled improperly.The process of handling risk appropriately has been problematic and has also received attention recently. Loomis (1983) Uncertainty in the processes of identifying goals and assigning them importance and in determining the effort necessary to achieve goals and the current level of goal attainment is one facet of risk perception (Bauer, 1967; Cox, 1967 Insert Figure 1 about here It is hypothesized that major variables in the external and internal environment of the organization impinge on the strategists, whose resultant risk estimates are seen as interacting with the nature of the strategic problem under consideration to determine the willingness of the firm to accept the risk of that strategy (see also