Measuring the big five personality traits effects on manager’s propensity to take risks

Abstract

This paper aims to analyze the relationship between the Big Five personality traits and managers' propensity to take risks. The items used in the questionnaire to assess the Big Five inventory were grouped into five large dimensions: extraversion, agreeableness, conscientiousness, neuroticism and openness. The risk taking orientation was measured based on two dimensions: profit vs. safety and bold growth vs. moderate growth. Several hypotheses have been tested on a convenience sample of 154 Romanian managers, using correlation, exploratory, and confirmatory factor analysis and causal (structural) model. Results show that extraverted managers are more prone to look for profit maximisation to the detriment of safety, while conscientious managers are susceptible to concentrate on safety, adopting cautious behaviors.