A grounded exploration of organisational risk propensity

Abstract

Organisational risk propensity directly affects the decision‐making behaviour of employees, with linked impacts on the ongoing prosperity of the organisation. The literature on an individual's risk behaviour is extensive. However, few studies investigate the risk propensity of an organisation. This study uses primary data from interviews within a major change programme in a FTSE100 pharmaceutical organisation to explore the characteristics of organisational risk propensity. The data are analysed using open coding procedures from Grounded Theory in order to fragment the category of ‘organisational risk propensity’ into some constituent properties and dimensions. An integrative framework is then inductively derived which provides insights into risk propensity within the case context; together with some cues for implementing changes to the organisation's risk propensity if so desired. The output from this research also provides a useful base from which to develop a survey instrument for assessing organisational risk propensity.

Keywords:

• risk
• risk propensity
• risk culture
• risk appetite