Embracing Change: Risk-Taking in Today’s Business Market

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The author argues that SMEs have lower risk bearing capabilities than larger enterprises and will explore higher risk. How does risk bearing capabilities of SMEs impact local economies? What demographic factors such as education, age, or gender impact risk bearing capabilities? Is there a need for a risk bearing capability scale? This paper will present a literature review on risk taking and change management and describe the research design and methods in preparation for research. To explore this issue, the author proposes developing a risk bearing capability measurement scale for SME to measure risk tolerance and perceptions. Further study and critical analysis is needed, particularly examining SME stability and viability in economic contexts.

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Embracing Change: Risk-Taking in Today’s Business Market

  1. 1. Embracing Change: Risk-Taking in Today’s Business Market Claretta Taylor Pam College of Management and Technology, Walden University
  2. 2. Introduction Changes in the business market (changes that have prompted organizations to change and adapt accordingly) have come in a variety of ways. Both internal and external forces drive changes within firms (including innovations).
  3. 3. Changes in the Business Market A number of empirical studies conducted in recent times has shown that incremental changes are mostly active in firms than are sensitive and responsive to information regarding changes in the marketplace. In this respect, for instance, customers (end-users) have played a key role in driving innovation associated with products and services.
  4. 4. Innovativeness is an aspect of risk taking that is necessary for change. According to Buehler, Andrew, and Ron (2008), when discussing innovation, often there is reference to two types of business change: radical and incremental innovations. Innovation and Risk Taking: Conceptual Framework
  5. 5. Risk taking and seizing new opportunities may appear to be opposites. For instance, if one constantly focuses on opportunities, they may be forced to take “calculated risks” (Morgan, 2004). Risk Taking, Innovativeness, and New Opportunities
  6. 6. Risk taking should also be accompanied by the development of appropriate contingency and crisis plans that will aid not only the prevention of harmful outcomes, but also the minimization of others. Simply, risk taking must focus on promoting safety, rather than based on negligence.
  7. 7. Proposed three-year project I am planning a mixed-method research design suited to investigate how SMEs in the United States manage risk bearing capabilities. The research will also encompass the development of a risk bearing capability scale for SMEs.
  8. 8. • How does risk bearing capabilities of SMEs impact local economies? • What demographic factors such as education, age, or gender impact risk bearing capabilities? • Is there a need for a risk bearing capability scale? Research Questions
  9. 9. Conclusion This paper has examined the concept of risk taking in the business market. Indeed, there are mixed results found regarding the impact of risk taking on potential returns. Not taking a risk in today’s business market is a risk in itself. As long as a firm accompanies its risk taking with caution and invests in its strengths, risk taking can raise its value and enhance its competitive advantage.
  10. 10. References • Buehler, K., Andrew, F. & Ron, H. (2008). “Owning the Right Risks”, Harvard Business Review, September. • Morgan, S. (2004). Positive Risk-Taking: an Idea whose Time has Come, Health Care Risk Report, October.
  11. 11. About the Authors Claretta T. Pam is a doctoral candidate in the Walden University School of Management. Claretta earned an MBA at the University of Phoenix and two undergraduate degrees at the UMass Boston. Her doctoral topic is: A Phenomenological Exploration of Immigrant Entrepreneurs Perceptions of Business Success.

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