Competitive determinants of organizational risktaking attitude: the role of strategic reference points

Aviv Shoham, Avi Fiegenbaum

Research output: Contribution to journalArticlepeer-review


A growing body of literature has emphasized the importance of innovative strategy as a source of competitive advantage. Drazin and Shoonhoven summarized the literature using multilevel theoretical perspectives (community, population, and organization) that affect organizational innovative behavior. In parallel, Fiegenbaum et al. developed an organizational level theory, based on prospect theory, to explain how risky strategies are determined within organizations. They argued that organizational reference points delineate organizational attitudes toward risktaking into two polarized regimes: riskaversive whereas below it is riskassertive. They described the organizational mechanism that converts attitudes toward risktaking into actual riskaversive and riskassertive strategic behavior. A threedimensional space is provided that illustrates the spectrum of strategic reference points (SRP). The current study extends SRP theory. It is proposed that the nature of the industry, organizational strategy, and performance impact the kind of reference points used, which, in turn, impact risktaking behavior towards innovative strategy.

Original languageEnglish
Pages (from-to)127-141
Number of pages15
JournalManagement Decision
Issue number2
StatePublished - 1 Mar 2002


  • Organizations
  • Risk management
  • Strategic management

ASJC Scopus subject areas

  • General Business, Management and Accounting
  • Management Science and Operations Research


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