Designing Executive Risk-Taking: An Agenda for Improving Executive Outcomes Through Work Design

Abstract

Executives exert a pervasive influence on the organizations they lead. As such, scholars have long considered how to calibrate the risks inherent in executive decision making, often relying on incentives and compensation to calibrate executive risk behavior. However, there are shortcomings that reduce the efficacy of this approach, largely because incentives and compensation do not alter the work environment itself, which play a significant role influencing executive risk behavior. Consequently, in this chapter, we propose a conceptualization that integrates executive risk-taking with work design, framing three central features of the strategic leader job and work environment that may be manipulated to channel and shape executive risk-taking. Specifically, accountability, discretion, and relationships are proposed as the key higher-order characteristics of the executive work context, and they are examined with respect to optimal calibration in order to maximize both executive performance and well-being, as well as organizational coordination and control. Implications of this conceptualization and directions for future research are discussed.

Citation

Summers, J.K., Munyon, T.P., Ranft, A.L., Ferris, G.R. and Buckley, M.R. (2012), "Designing Executive Risk-Taking: An Agenda for Improving Executive Outcomes Through Work Design", Martocchio, J.J., Joshi, A. and Liao, H. (Ed.) Research in Personnel and Human Resources Management (Research in Personnel and Human Resources Management, Vol. 31), Emerald Group Publishing Limited, Leeds, pp. 53-86. https://doi.org/10.1108/S0742-7301(2012)0000031004