Mood state and risk tolerance in organizational decisions
DOI:
https://doi.org/10.5585/riae.v21i1.20677Keywords:
Mood state, Risk tolerance, Decision making.Abstract
Objective of the study: This study aims to identify the relationship between an individual's mood and risk tolerance in organizational decisions.Methodology/approach: It is an applied, quantitative, descriptive and survey research. For data collection, a questionnaire was applied to a sample of 90 academics from higher education courses in the area of management at a Higher Education Institution in the State of Santa Catarina. Data were categorized and analyzed quantitatively using descriptive statistics, correlation analysis and logistic regression analysis.
Originality/relevance: Researches relate positive mood and increased risk-taking, however, the results are fragmented and inconclusive as to the influence of negative mood on the tendency to take risks. Thus, this research focuses attention on the asymmetry of influence of both positive and negative mood on risk preferences.
Main results: We found that in decisions involving gains, respondents have less tolerance than when they involve losses. Although mood is not related to risk tolerance, when analyzed separately, a relationship was found between the dimensions of mood and the individuals' risk tolerance.
Theoretical/methodological contributions: This research adds to the literature, by exploring decision-making and the behavioral line simultaneously, as well as contributing to represent a more comprehensive description regarding the decision process regarding the Prospect Theory, by demonstrating which dimensions of mood have an influence on the risk tolerance of respondents.
Social/management contributions: The study contributes to the improvement of decision-making processes in the context of aspects related to risk tolerance. The practical implications refer to the construction of a decision-making process designed in a more assertive way and in line with the losses and gains arising from the inherent risk of this decision-making process.
Downloads
References
Alempaki, D., Starmer, C., & Tufano, F. (2019). On the priming of risk preferences: The role of fear and general affect. Journal of Economic Psychology, 75, 102137. https://doi.org/10.1016/j.joep.2018.12.011
Allwood, C. M., & Salo, I. (2012). Decision-making styles and stress. International Journal of Stress Management, 19(1), 34. https://doi.org/10.1037/a0027420
Andersson, O., Holm, H. J., Tyran, J. R., & Wengström, E. (2014). Deciding for others reduces loss aversion. Management Science, 62(1), 29-36. https://doi.org/10.1287/mnsc.2014.2085
Antunes, T. P. S. O. (2017). Humor em Contexto Organizacional. Dissertação (Mestrado em Gestão de Recursos Humanos) - Escola de Economia e Gestão, Universidade do Minho, Braga, Portugal, 73 p.
Azadeh, A., Mokhtari, Z., Sharahi, Z. J., & Zarrin, M. (2015). An integrated experiment for identification of best decision styles and teamworks with respect to HSE and ergonomics program: the case of a large oil refinery. Accident Analysis & Prevention, 85, 30-44. https://doi.org/10.1016/j.aap.2015.08.016
Baykasoğlu, A., & Gölcük, İ. (2015). Development of a novel multiple-attribute decision making model via fuzzy cognitive maps and hierarchical fuzzy TOPSIS. Information Sciences, 301, 75-98. https://doi.org/10.1016/j.ins.2014.12.048
Bazerman, M. H. (2004). Processo decisório. São Paulo: Campus.
Birnberg, J. G., Luft, J., & Shields, M. D. (2006). Psychology theory in management accounting research. Handbooks of Management Accounting Research, 1, 113-135. https://doi.org/10.1016/S1751-3243(06)01004-2
Bliss, R. T., Potter, M. E., & Schwarz, C. (2012). Decision making and risk aversion in the Cash Cab. Journal of Economic Behavior & Organization, 84(1), 163-173. https://doi.org/10.1016/j.jebo.2012.07.005
Brooks, C., Sangiorgi, I., Hillenbrand, C., & Money, K. (2018). Why are older investors less willing to take financial risks?. International Review of Financial Analysis, 56, 52-72. https://doi.org/10.1016/j.irfa.2017.12.008
Camerer, C. (2005). Three cheers—psychological, theoretical, empirical—for loss aversion. Journal of Marketing Research, 42(2), 129-133. https://doi.org/10.1509/jmkr.42.2.129.62286
Coet, L. J., & McDermott, P. J. (1979). Sex, instructional set, and group make-up: Organismic and situational factors influencing risk-taking. Psychological Reports, 44(3_suppl), 1283-1294. https://doi.org/10.2466/pr0.1979.44.3c.1283
Cools, E., & Van den Broeck, H. (2007). Development and validation of the Cognitive Style Indicator. The Journal of psychology, 141(4), 359-387. https://doi.org/10.3200/JRLP.141.4.359-388
Cooper, C. (2008). Elucidating the bonds of workplace humor: A relational process model. Human relations, 61(8), 1087-1115. https://doi.org/10.1177/0018726708094861
Courtney, J. F. (2001). Decision making and knowledge management in inquiring organizations: toward a new decision-making paradigm for DSS. Decision support systems, 31(1), 17-38. https://doi.org/10.1016/S0167-9236(00)00117-2
Cristofaro, M. (2016). Cognitive styles in dynamic decision making: a laboratory experiment. International Journal of Management and Decision Making, 15(1), 53-82. https://doi.org/10.1504/IJMDM.2016.076840
Cronbach, L. J. (1951). Coefficient alpha and the internal structure of tests. psychometrika, 16(3), 297-334.
Dohmen, T., Falk, A., Huffman, D., Sunde, U., Schupp, J., & Wagner, G. G. (2011). Individual risk attitudes: Measurement, determinants, and behavioral consequences. Journal of the European Economic Association, 9(3), 522-550. https://doi.org/10.1111/j.1542-4774.2011.01015.x
Duarte, S. R., & de Paula Duarte, L. C. R. (2009). O Humor nas Organizações Hoteleiras: um estudo de casos múltiplos. Revista Hospitalidade, 6(1), 89-104.
Eberlin, R. J., & Tatum, B. C. (2008). Making just decisions: organizational justice, decision making, and leadership. Management Decision, 46(2), 310-329. https://doi.org/10.1108/00251740810854177
Ekman, F!, & Davidson, R. J. (1994). The Nature ofEmotion. Oxford: Oxford University Press.
Fagundes, E. (2019). Tolerância ao risco dos gestores: uma análise na tomada de decisões nos campos pessoal e organizacional. Dissertação (Mestrado em Contabilidade) - Programa de Pós-Graduação em Contabilidade - PPGC, Universidade Federal de Santa Catarina, Florianópolis.
Fagundes, E., Schnorrenberger, D., Gasparetto, V., & Lunkes, R. J. (2021). Tolerância ao Risco de Gestores: Análise na Tomada de Decisões nos Campos Pessoal e Organizacional. Revista Evidenciação Contábil & Finanças, 9(1), 22-43.
Fagundes, E., Schnorremberger, D., & Lunkes, R. J. (2018). Aversão ao risco na tomada de decisões organizacionais: análise da literatura e oportunidades de pesquisa. Revista de Contabilidade do Mestrado em Ciências Contábeis da UERJ, 23(2), 19-36. https://doi.org/10.12979/rcmccuerj.v23i2.39910
Faraci, P., Lock, M., & Wheeler, R. (2013). assessing leadership decision-making styles: psychometric properties of the leadership Judgement indicator. Psychology research and behavior management, 6, 117. doi: 10.2147/PRBM.S53713
Farias, T. A., Salim, P. H., & Santos, R. R. S. (2020). Aversão ao risco e resposta comportamental: Uma exploração histórico-econômica. Revista de Estudos Sociais, 22(45), 5-36.
Francis, B., Hasan, I., Park, J. C., & Wu, Q. (2015). Gender differences in financial reporting decision making: Evidence from accounting conservatism. Contemporary Accounting Research, 32(3), 1285-1318. https://doi.org/10.1111/1911-3846.12098
Gary, M. S., & Wood, R. E. (2011). Mental models, decision rules, and performance heterogeneity. Strategic management journal, 32(6), 569-594. https://doi.org/10.1002/smj.899
Geetha, S. N., & Selvakumar, M. M. (2016). An analysis on the factors influencing risk tolerance level of individual investors. International Journal of Business Excellence, 9(2), 253-264. https://doi.org/10.1504/IJBEX.2016.074867
Grable, J. E. (2000). Financial risk tolerance and additional factors that affect risk taking in everyday money matters. Journal of Business and Psychology, 14(4), 625-630.
Grable, J. E., & Joo, S. H. (2004). Environmental and biophysical factors associated with financial risk tolerance, 73-82.
Hair, J. F., Black, W. C., Babin, B. J., Anderson, R. E., & Tatham, R. L. (2009). Análise multivariada de dados. Bookman Editora.
Hallahan, T. A., Faff, R. W., & McKenzie, M. D. (2004). An empirical investigation of personal financial risk tolerance. Financial Services Review-Greenwich-, 13(1), 57-78.
Hastie, R., & Dawes, R. M. (2009). Rational choice in an uncertain world: The psychology of judgment and decision making. Sage Publications.
Herman, A. M., Critchley, H. D., & Duka, T. (2018). The role of emotions and physiological arousal in modulating impulsive behaviour. Biological psychology, 133, 30-43. https://doi.org/10.1016/j.biopsycho.2018.01.014
Hockey, G. R. J., John Maule, A., Clough, P. J., & Bdzola, L. (2000). Effects of negative mood states on risk in everyday decision making. Cognition & Emotion, 14(6), 823-855. https://doi.org/10.1080/02699930050156654
Hough, J. R., & Ogilvie, D. T. (2005). An empirical test of cognitive style and strategic decision outcomes. Journal of Management Studies, 42(2), 417-448. https://doi.org/10.1111/j.1467-6486.2005.00502.x
Isen, A. M. (1993). Positive affect and decision making.
Kahneman, D. (2012). Rápido e devagar: duas formas de pensar. Objetiva.
Kahneman, D., Knetsch, J. L., & Thaler, R. H. (1990). Experimental tests of the endowment effect and the Coase theorem. Journal of political Economy, 98(6), 1325-1348.
Kahneman, D., & Tversky, A. (1979). Prospect Theory: An Analysis of Decisions under Risk. Econometrica, 47(2), 263-291.
Kelly, K. (2010). Accuracy of relative weights on multiple leading performance measures: Effects on managerial performance and knowledge. Contemporary Accounting Research, 27(2), 577-608. https://doi.org/10.1111/j.1911-3846.2010.01017.x
Kruger, S. D., Prestes, M., Mazzioni, S., & Petri, S. M. (2018). Processo decisório sob efeito de preferências: aversão e exposição ao risco. Revista Contemporânea de Contabilidade, 15(36), 166-187.
Kusev, P., Purser, H., Heilman, R., Cooke, A. J., Van Schaik, P., Baranova, V., ... & Ayton, P. (2017). Understanding risky behavior: the influence of cognitive, emotional and hormonal factors on decision-making under risk. Frontiers in psychology, 8, 102.
Langhorn, S. (2004). How emotional intelligence can improve management performance. International Journal of Contemporary Hospitality Management. https://doi.org/10.1108/09596110410537379
Larson, R, & Farber, B. (2015). Estatística aplicada. 6ª edição. São Paulo: Pearson Education do Brasil.
Leith, K. P., & Baumeister, R. F. (1996). Why do bad moods increase self-defeating behavior? Emotion, risk tasking, and self-regulation. Journal of personality and social psychology, 71(6), 1250. https://doi.org/10.1037/0022-3514.71.6.1250
Leonard, N. H., Scholl, R. W., & Kowalski, K. B. (1999). Information processing style and decision making. Journal of Organizational Behavior: The International Journal of Industrial, Occupational and Organizational Psychology and Behavior, 20(3), 407-420. https://doi.org/10.1002/(SICI)1099-1379(199905)20:3<407::AID-JOB891>3.0.CO;2-3
Lima Filho, R. N.; & Bruni, A. L. (2013). Quanto mais faço, mais erro? uma análise sobre a presença de vieses cognitivos em julgamentos sobre orçamento. Revista Base, 10(3), 224-239. doi: 10.4013/base.2013.103.03
Lucena, W. G. L., Fernandes, M. S. A., & da Silva, J. D. G. (2011). A contabilidade comportamental e os efeitos cognitivos no processo decisório: uma amostra com operadores da contabilidade. Revista Universo Contábil, 7(3), 41-58. doi:10.4270/ruc.2011321
Luft, J., Shields, M. D., & Thomas, T. F. (2016). Additional information in accounting reports: Effects on management decisions and subjective performance evaluations under causal ambiguity. Contemporary Accounting Research, 33(2), 526-550. https://doi.org/10.1111/1911-3846.12156
Luppe, M. R.; & Angelo, C. F. de. (2010). As decisões de consumo e a heurística da ancoragem: uma análise da racionalidade do processo de escolha. RAM - Revista de Administração Mackenzie, 11(6), pp. 81-106.
McKenna, J., Hyllegard, K., & Linder, R. (2003). Linking psychological type to financial decision-making.
McNair, D. M., Loor, M., & Droppleman, L. F. (1971). EITS manual for the Profile of Mood States.San Diego, CA: Educational and Industrial Testing Service.
Meier-Pesti, K., & Goetze, E. (2005). Masculinity and femininity as predictors of financial risk-taking: Evidence from a priming study on gender salience. ACR European Advances.
Mittal, V., & Ross Jr, W. T. (1998). The impact of positive and negative affect and issue framing on issue interpretation and risk taking. Organizational behavior and human decision processes, 76(3), 298-324. https://doi.org/10.1006/obhd.1998.2808
Montinari, N., & Rancan, M. (2013). Social preferences under risk: the role of social distance (No. 2013-050). Jena Economic Research Papers.
Myers, J. L., Well, A. D., & Lorch Jr, R. F. (2013). Research design and statistical analysis. Routledge. https://doi.org/10.4324/9780203726631
Nobre, F. C., Calil, J. F., De Camargo Machado, M. J., & Giuliani, A. C. (2016). Contabilidade mental: Levantamento e desenvolvimento recente. Revista ESPACIOS, 37(34).
Nygren, T. E., Isen, A. M., Taylor, P. J., & Dulin, J. (1996). The influence of positive affect on the decision rule in risk situations: Focus on outcome (and especially avoidance of loss) rather than probability. Organizational behavior and human decision processes, 66(1), 59-72. https://doi.org/10.1006/obhd.1996.0038
Pennino, C. M. (2002). Is decision style related to moral development among managers in the US?. Journal of Business Ethics, 41(4), 337-347.
Penolazzi, B., Leone, L., & Russo, P. M. (2013). Individual differences and decision making: when the lure effect of gain is a matter of size. PloS one, 8(3), e58946. https://doi.org/10.1371/journal.pone.0058946
Pietromonaco, P. R., & Rook, K. S. (1987). Decision style in depression: The contribution of perceived risks versus benefits. Journal of Personality and Social Psychology, 52(2), 399. https://doi.org/10.1037/0022-3514.52.2.399
Ramiah, V., Zhao, Y., Moosa, I., & Graham, M. (2016). A behavioural finance approach to working capital management. The European Journal of Finance, 22(8-9), 662-687. https://doi.org/10.1080/1351847X.2014.883549
Shafir, E., Diamond, P., & Tversky, A. (1997). Money illusion. The Quarterly Journal of Economics, 112(2), 341-374. https://doi.org/10.1162/003355397555208
Shepherd, D. A., Williams, T. A., & Patzelt, H. (2015). Thinking about entrepreneurial decision making: Review and research agenda. Journal of management, 41(1), 11-46. https://doi.org/10.1177/0149206314541153
Shields, M. D. (2015). Established management accounting knowledge. Journal of Management Accounting Research, 27(1), 123-132. https://doi.org/10.2308/jmar-51057
Soares, R. B., Simões, P., & Neto, P. D. M. J. (2018). Aversão ao risco e efeito incentivo: um experimento laboratorial com alunos da UFC. Contextus: Revista Contemporânea de economia e gestão, 16(1), 10-33.
Souza, M. L. (2017). Finanças comportamentais: um estudo das publicações no Enanpad no período de 2003 a 2013. Conhecimento Interativo, 11(1), 59-74.
Sung, J., & Hanna, S. (1996). Factors related to risk tolerance. Journal of Financial Counseling and Planning, 7, 11.
Tversky, A., & Kahneman, D. (1991). Loss aversion in riskless choice: A reference-dependent model. The quarterly journal of economics, 106(4), 1039-1061. https://doi.org/10.2307/2937956
Viana, M. F., Almeida, P. L. D., & Santos, R. C. (2001). Adaptação portuguesa da versão reduzida do Perfil de Estados de Humor: POMS. Análise Psicológica, 19(1), 77-92.
Yao, R., Sharpe, D. L., & Wang, F. (2011). Decomposing the age effect on risk tolerance. The Journal of Socio-Economics, 40(6), 879-887. https://doi.org/10.1016/j.socec.2011.08.023
Yuen, KS e Lee, TM (2003). O estado de humor pode afetar as decisões de tomada de risco ?. Journal of affective disorder , 75 (1), 11-18. https://doi.org/10.1016/S0165-0327(02)00022-8
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2022 Iberoamerican Journal of Strategic Management (IJSM)
This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
The author (s) authorize the publication of the manuscript in the journal;
The author (s) guarantee that the contribution is original and unpublished and that it is not being evaluated in another journal (s);
The journal is not responsible for the opinions, ideas and concepts emitted in the texts, as they are the sole responsibility of its author (s);
Editors reserve the right to make textual adjustments and adapt to the publication's rules.
Authors retain the copyright and grant the journal the right to first publication, with the work simultaneously licensed under the Creative Commons Attribution License - 4.0 (CC BY-NC-SA 4.0) that allows the sharing of the work with acknowledgment of authorship and initial publication in this magazine.
Authors are authorized to assume additional contracts separately, for non-exclusive distribution of the version of the work published in this journal (eg, publishing in institutional repository or as a book chapter), with acknowledgment of authorship and initial publication in this journal.
Authors are allowed and encouraged to publish and distribute their work online (eg in institutional repositories or on their personal page) at any point before or during the editorial process, as this can generate productive changes, as well as increase impact and citation of the published work (see “The Effect of Open Access” at http://opcit.eprints.org/oacitation-biblio.html).
Authors can use ORCID for identification. An ORCID identifier is unique to an individual and acts as a persistent digital identifier to ensure that authors (particularly those with relatively common names) can be distinguished and their work appropriately assigned.
