A multilevel framework of the role of environmental and organizational context on risk taking

In this dissertation I examine one of the critical processes for each organization---organizational risk taking. To achieve this goal I develop a multilevel framework that explicates on the antecedents, consequences and moderating conditions of organizational risk taking.;While prior research indicates that risk taking is driven by discrepancy between performance and aspiration levels, little work has been done on whether all organizations respond in a similar fashion to poor performance. Using a sample of corporate divisions in multidivisional corporations (M-firms), I argue that a set of factors from the organizational and structural context affect the ability and motivation of managers to respond to poor performance by engaging in risk taking. The structural contingencies of the M-firm also have important implications for the consequences of divisional risk taking by impacting the ability of divisional managers to undertake high-quality risky choices. My results suggest that a set of factors residing at the divisional, corporate, and environmental levels of analysis significantly affects the risk taking behavior of managers. Overall, this dissertation aims to advance our knowledge on the embeddedness of managerial risky choices in a larger organizational and environmental context and offer insight into how this context impacts organizational risk taking.