IDEAS home Printed from https://ideas.repec.org/a/sae/emffin/v8y2009i3p289-314.html
   My bibliography  Save this article

An Operationalisation of Managerial Risk-Taking and its Performance Implications in the Tunisian Context

Author

Listed:
  • Amel Belanes

    (Amel Belanes, Fiesta, Institut Supérieur de Gestion Résidence Rym 1 Bloc P App 123 Cité Les oasis El Agba 0021698979275. E-mail: amel_bns@yahoo.fr)

  • Rym Hachana

    (Rym Hachana, Fiesta, Institut Supérieur de Gestion Résidence Donia Bloc Selma S5A 1013 El Menzah 9 B 0021621863057. E-mail: hachana_rym@yahoo.fr)

Abstract

This article assesses managerial risk-taking and their performance in the Tunisian context. Drawing on a Tunisian sample of 46 listed companies during 1997–2006, our modelling offers a factor score of managerial risk-taking which takes into account both financial and strategic dimensions. We find that the Tunisian firms tend to be more conservative and risk-averse, which might lead to performance decline. Our analysis also highlights a non-linear relationship between managerial risk-taking and performance.

Suggested Citation

  • Amel Belanes & Rym Hachana, 2009. "An Operationalisation of Managerial Risk-Taking and its Performance Implications in the Tunisian Context," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 8(3), pages 289-314, September.
    • Handle: RePEc:sae:emffin:v:8:y:2009:i:3:p:289-314
    DOI: 10.1177/097265270900800303
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/097265270900800303
    Download Restriction: no
    File URL: https://libkey.io/10.1177/097265270900800303?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Timothy B. Palmer & Robert M. Wiseman, 1999. "Decoupling risk taking from income stream uncertainty: a holistic model of risk," Strategic Management Journal, Wiley Blackwell, vol. 20(11), pages 1037-1062, November.
    2. Trevis Certo, S. & Connelly, Brian L. & Tihanyi, Laszlo, 2008. "Managers and their not-so rational decisions," Business Horizons, Elsevier, vol. 51(2), pages 113-119.
    3. Danny Miller, 1983. "The Correlates of Entrepreneurship in Three Types of Firms," Management Science, INFORMS, vol. 29(7), pages 770-791, July.
    4. Lumpkin, G. T. & Dess, Gregory G., 2001. "Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle," Journal of Business Venturing, Elsevier, vol. 16(5), pages 429-451, September.
    5. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    6. William S. Schulze & Michael H. Lubatkin & Richard N. Dino, 2002. "Altruism, agency, and the competitiveness of family firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 23(4-5), pages 247-259.
    7. James G. March & Zur Shapira, 1987. "Managerial Perspectives on Risk and Risk Taking," Management Science, INFORMS, vol. 33(11), pages 1404-1418, November.
    8. Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
    9. Jeffrey G. Covin & Dennis P. Slevin & Randall L. Schultz, 1994. "Implementing Strategic Missions: Effective Strategic, Structural And Tactical Choices," Journal of Management Studies, Wiley Blackwell, vol. 31(4), pages 481-506, July.
    10. Chakraborty, Atreya & Sheikh, Shahbaz & Subramanian, Narayanan, 2007. "Termination risk and managerial risk taking," Journal of Corporate Finance, Elsevier, vol. 13(1), pages 170-188, March.
    11. Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2006. "Managerial incentives and risk-taking," Journal of Financial Economics, Elsevier, vol. 79(2), pages 431-468, February.
    12. Wu, Hsueh-Liang, 2008. "When does internal governance make firms innovative," Journal of Business Research, Elsevier, vol. 61(2), pages 141-153, February.
    13. Michael Lubatkin & Eric Gedajlovic & William S. Schulze, 2004. "Crossing the threshold from founder management to professional management : A governance perspective," Post-Print hal-02311640, HAL.
    14. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    15. Wiklund, Johan & Shepherd, Dean, 2005. "Entrepreneurial orientation and small business performance: a configurational approach," Journal of Business Venturing, Elsevier, vol. 20(1), pages 71-91, January.
    16. Michael Lubatkin & William S. Schulze & Richard N. Dino, 2002. "Altruism, Agency and the Competitiveness of Family Firms," Post-Print hal-02311705, HAL.
    17. Eric Gedajlovic & Michael H. Lubatkin & William S. Schulze, 2004. "Crossing the Threshold from Founder Management to Professional Management: A Governance Perspective," Journal of Management Studies, Wiley Blackwell, vol. 41(5), pages 899-912, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Benedict Valentine Arulanandam & Christo Selvan & Goh Xin Tong, 2023. "Critical Factors Influencing Firms' Risk-Taking Behaviour: CEO Characteristics and the Moderating Role of the Audit Committee," Central European Business Review, Prague University of Economics and Business, vol. 2023(5), pages 1-41.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. José Luis Esparza-Aguilar & Argentina Soto-Maciel & Ma. Isabel De la Garza-Ramos, 2016. "Entrepreneurial orientation in Mexican family businesses," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 4(6), pages 29-39, December.
    2. O'Connell, Vincent & Lee, Jong-Ho & O'Sullivan, Don, 2018. "The influence of CEO equity incentives on licensing," European Management Journal, Elsevier, vol. 36(2), pages 266-277.
    3. Elizabeth N. K. Lim & Brian T. McCann, 2014. "Performance Feedback and Firm Risk Taking: The Moderating Effects of CEO and Outside Director Stock Options," Organization Science, INFORMS, vol. 25(1), pages 262-282, February.
    4. Yan Ling & María Concepción López-Fernández & Ana María Serrano-Bedia & Franz W. Kellermanns, 2020. "Organizational culture and entrepreneurial orientation: examination through a new conceptualization lens," International Entrepreneurship and Management Journal, Springer, vol. 16(2), pages 709-737, June.
    5. Chari, Murali D.R. & David, Parthiban & Duru, Augustine & Zhao, Yijiang, 2019. "Bowman's risk-return paradox: An agency theory perspective," Journal of Business Research, Elsevier, vol. 95(C), pages 357-375.
    6. DasGupta, Ranjan & Dhochak, Monika, 2021. "Risk-Antecedents of Firms and Strategic Mediators – New Evidence from a Cross-Country Analysis," American Business Review, Pompea College of Business, University of New Haven, vol. 24(1), pages 3-35, May.
    7. González L., Ana C. & Rodríguez, Yeny E. & Gómez, Juan M. & Chávez, Helmuth & Chea, Jaly, 2021. "Family business risk-taking and financial performance: Is it easier said than done?," Journal of Family Business Strategy, Elsevier, vol. 12(4).
    8. Toru Yoshikawa & Abdul A. Rasheed, 2010. "Family Control and Ownership Monitoring in Family‐Controlled Firms in Japan," Journal of Management Studies, Wiley Blackwell, vol. 47(2), pages 274-295, March.
    9. Adetoun Adedotun Amubode & Hassanat Motunrayo Rauf-Lawal & Boiso Maria Owodiong-Idemeko, 2016. "Attitude of Couples and Marrigeable Singles in Establishing Joint Fashion Business," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 6(1), pages 192-205, March.
    10. Engelen, Andreas & Kube, Harald & Schmidt, Susanne & Flatten, Tessa Christina, 2014. "Entrepreneurial orientation in turbulent environments: The moderating role of absorptive capacity," Research Policy, Elsevier, vol. 43(8), pages 1353-1369.
    11. Vishal Gupta & Alka Gupta, 2015. "Relationship between entrepreneurial orientation and firm performance in large organizations over time," Journal of International Entrepreneurship, Springer, vol. 13(1), pages 7-27, March.
    12. Patrick Kreiser & Louis Marino & Donald Kuratko & K. Weaver, 2013. "Disaggregating entrepreneurial orientation: the non-linear impact of innovativeness, proactiveness and risk-taking on SME performance," Small Business Economics, Springer, vol. 40(2), pages 273-291, February.
    13. César Camisón-Zornoza & Beatriz Forés-Julián & Alba Puig-Denia & Sergio Camisón-Haba, 0. "Effects of ownership structure and corporate and family governance on dynamic capabilities in family firms," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-34.
    14. Patricio Duran & Nadine Kammerlander & Marc van Essen & Thomas Zellweger, 2016. "Doing More with Less : Innovation Input and Output in Family Firms," Post-Print hal-02276703, HAL.
    15. Andrea Calabrò & Donata Mussolino, 2013. "How do boards of directors contribute to family SME export intensity? The role of formal and informal governance mechanisms," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(2), pages 363-403, May.
    16. Adel Elgharbawy & Magdy Abdel-Kader, 2013. "Enterprise governance and value-based management: a theoretical contingency framework," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 17(1), pages 99-129, February.
    17. Martin, Silvia L. & Javalgi, Rajshekhar (Raj) G., 2016. "Entrepreneurial orientation, marketing capabilities and performance: The Moderating role of Competitive Intensity on Latin American International New Ventures," Journal of Business Research, Elsevier, vol. 69(6), pages 2040-2051.
    18. César Camisón-Zornoza & Beatriz Forés-Julián & Alba Puig-Denia & Sergio Camisón-Haba, 2020. "Effects of ownership structure and corporate and family governance on dynamic capabilities in family firms," International Entrepreneurship and Management Journal, Springer, vol. 16(4), pages 1393-1426, December.
    19. Andreas Rauch & Johan Wiklund & G.T. Lumpkin & Michael Frese, 2009. "Entrepreneurial Orientation and Business Performance: An Assessment of past Research and Suggestions for the Future," Entrepreneurship Theory and Practice, , vol. 33(3), pages 761-787, May.
    20. Reddy, Krishna & Wellalage, Nirosha Hewa, 2023. "Effects of family ownership and family management on the performance of entrepreneurial firms," Research in International Business and Finance, Elsevier, vol. 65(C).

    More about this item

    Keywords

    JEL Classification: D81; JEL Classification: G30; JEL Classification: M13; Managerial risk-taking; entrepreneurial orientation; performance Tunisian firms;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:emffin:v:8:y:2009:i:3:p:289-314. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.ifmr.ac.in .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.