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.

1. Embracing Change:
Risk-Taking in Today’s
Business Market
Claretta Taylor Pam
College of Management and Technology,
Walden University

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. 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. 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. 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. 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. 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. • 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. 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. 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. 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.