Risk-taking Can Lead to a Leader’s Success or Failure

Yale SOM expert Oriane Georgeac, Gerben van Kleef of the University of Amsterdam, and their co-authors discuss how leaders can take risks and avoid failure because of it.

In some situations risk-taking leaders can come out winners and in other situations it can lead them to fail. The researchers say that a lot is known about the attributes and influences that lead to leaders taking risks. These include personality traits, social contexts, etc. But little to nothing is known about the consequences of those risks, especially by leaders in an organization.

After their research, they found that risk-taking increased two specific aspects of the person taking the risk – dominance and prestige. Those whose dominance perception had increased were considered less favorable and those whose prestige perception had increased were considered more favorable.