Strategic risk-taking propensity: The role of ethical climate and marketing output control [Book Review]
David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
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Journal of Business Ethics 90 (4):593 - 606 (2009)
In the wake of the current financial crises triggered by risky mortgage-backed securities, the question of ethics and risk-taking is once again at the front and center for both practitioners and academics. Although risk-taking is considered an integral part of strategic decision-making, sometimes firms could be propelled to take risks driven by reasons other than calculated strategic choices. The authors argue that a firm's risk-taking propensity is impacted by its ethical climate (egoistic or benevolent) and its emphasis on output control to manage its marketing function. The firm's long-term orientation is argued to moderate the control–risk propensity relationship. The authors also extend research on risk and performance and argue that the association of risk-taking propensity and firm performance is contingent on the ownership (publicly traded versus privately held) structure of the firm. Based on survey data from a sample of manufacturing industries in the United States, the results show significant impact of ethical climate and marketing output control on a firm's risk-taking propensity; also risk-taking propensity shows a stronger association with firm performance in privately held firms than in publicly traded firms
|Keywords||risk risk-taking propensity ethical climate long-term orientation output control publicly traded privately held|
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References found in this work BETA
John B. Cullen, K. Praveen Parboteeah & Bart Victor (2003). The Effects of Ethical Climates on Organizational Commitment: A Two-Study Analysis. [REVIEW] Journal of Business Ethics 46 (2):127 - 141.
Lynn T. Drennan (2004). Ethics, Governance and Risk Management: Lessons From Mirror Group Newspapers and Barings Bank. [REVIEW] Journal of Business Ethics 52 (3):257-266.
Ronald Francis & Anona Armstrong (2003). Ethics as a Risk Management Strategy: The Australian Experience. [REVIEW] Journal of Business Ethics 45 (4):375 - 385.
Citations of this work BETA
Constantin Blome & Antony Paulraj (2013). Ethical Climate and Purchasing Social Responsibility: A Benevolence Focus. [REVIEW] Journal of Business Ethics 116 (3):567-585.
Robert Stewart, Sabrina D. Volpone, Derek R. Avery & Patrick McKay (2011). You Support Diversity, But Are You Ethical? Examining the Interactive Effects of Diversity and Ethical Climate Perceptions on Turnover Intentions. [REVIEW] Journal of Business Ethics 100 (4):581 - 593.
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