Sex Differences and Risk-Taking Propensity of Entrepreneurs

ABSTRACT: RAPPORTS ENTRE LE SEXE DES ENTREPRENEURS ET LEURS TENDANCES A PRENDRE DES RISQUES Il a ete souvent suggere que les entrepreneurs etaient enclins a prendre plus de risques que les gerants, et que les hommes prenaient plus de risques que les femmes. Le but de cette etudetait d'examinerces deux propositions en utilisant un instrument standard,le"Kogan and Wallach Choice Dilemma Questionnaire (CDQ)." Elle s'inspire des recherches conduites par Brockhaus pour determiner la difference d'attitude entre les entrepreneurs et les gerants dans le domaine des prises de risques. Elle en corrobore les resultats: il n'y a aucune difference significative entre la tendance a prendre des risques parmi les entrepreneurs et les gerants. Il en est de meme en ce qui concerne la difference entre hommes et femmes. The entrepreneur's and manager's roles have always involved risk taking. Entrepreneurs, however, are widely believed to be willing to take more risks than managers. In addition, women have been stereotyped as conservative and risk-averse-males are viewed as taking more risks than females. The purpose of this article is to present the results of a study conducted to determine whether male entrepreneurs and female entrepreneurs in the United States differ in risk-taking propensity. A secondary purpose of the study was to replicate the research conducted by Brockhaus comparing the risk-taking propensity of entrepreneurs and managers..sup.1 BACKGROUND Previous researchers have either openly stated or implied that both entrepreneurs and managers are risk-taker..sup.2 According to Burch, "The antithesis of the entrepreneur is a person who never loses because he or she never puts himself or herself at risk.".sup.3 Research conducted prior to the 1960s investigating differences between males and females in various situations typically found females to be more conservative than males..sup.4 Wallach and Kogan concluded that women are more conservative when they make decisions under conditions of uncertainty; however, they are more extreme in their judgments when conditions are certain..sup.5 This result is generally explained by reference to the constraining influences females are exposed to in the socialization process. Males are reinforced for exploratory (i.e., risk-taking) behavior; females are encouraged to be more conservative. The women's movement which took shape in the 1960s and 1970s has had a major influence on societal value systems. Its primary emphasis has been on achieving legal equality and increasing employment opportunities for women, including preparing women for managerial roles, in part by developing awareness of risk-taking..sup.6 During the 1980s, the literature addressed female entrepreneurship and actual risk-taking, which demonstrated women's advancement into entrepreneurial and risk-taking roles.sup.7 Statistics show that during this period, women started more small businesses than men, and women-owned businesses were the fastest growing segment of small business in North America.sup.8 From 1972 to 1982, the number of self-employed women increased by 59 percent; five times the rate of increase among men..sup.9 It appears, therefore, that sex differences with respect to risk taking may no longer exist. DEFINITIONS Many characteristics and attributes have been attributed to "the entrepreneurial personality.".sup.10 Some writers have suggested defining entrepreneurs in terms of role rather than attributes.sup.11 The debate as to what actually constitutes an entrepreneur has not been resolved. For the purposes of this article, the entrepreneur is defined as a major owner of a small business or the major owner and manager of a small business. A manager is defined as a person who manages, but does not own a small business. As for the definition of risk-taking, Baty has said a question to ask when considering an entrepreneurial venture is "are the potential rewards commensurate with the risks? …