Managers’ risk taking behavior and innovation performance: the mediating influence of employees’ perceived risk raking climate

10/04/2013 to 12/04/2013
EU-SPRI 2013
The ability of firms to innovate is a primary factor in gaining and sustaining competitive advantage (Nelson and Winter, 1985). Hence, a widely supported idea is that innovative behaviors should be highly encouraged across all levels of the organization, given that such behaviors are likely to exert a positive influence in organizational effectiveness (Amabile et al., 2005; Woodman et al., 1993). The focal point of our research is on the relationship between risk taking and innovation performance, from both a managerial and an employee perspective.
The link between risk taking and innovation has been analyzed from two different, but connected perspectives. From a managerial perspective, the lens of entrepreneurial orientation and leadership theories have provided useful insights to establish a direct relation between managers’ risk taking an innovation (Ling et al., 2008; Wu et al., 2005; Lyon et al., 2000; Lumpkin and Dess, 1996; Covin and Slevin, 1986). From an employee perspective, scholars have pointed that an organizational climate promoting risk taking will be effective in fostering innovative behaviors among employees (Gilson and Shalley, 2004). Although work from both views has significantly advanced in the understanding of the nature of the link between risk taking and innovation performance, little empirical research has analyzed this link through a combined perspective. To address this issue, in this paper we argue that managers’ risk taking behavior not only exerts a direct effect over innovation performance. Rather, it indirectly influences employees’ innovation performance through its positive impact over the perceived risk-taking climate in the organization.
Madrid, España
Óscar Llopis Córcoles, Ana García Granero, Anabel Fernández Mesa, Joaquín Alegre Vidal