The Influence of Perceived Risk on the Performance of the Entrepreneur

Norfaezah Mohd Shahren, Mastura Ayob and Siti Nazirah Omar

Information Management and Business Review, 2024, vol. 16, issue 3, 328-338

Abstract: The perception of risk has a substantial impact on the decision-making process and allocation of resources in entrepreneurship, which in turn affects business performance and the identification of strategic growth possibilities. Entrepreneurs frequently encounter situations characterized by uncertainty and ambiguity. Their perception of risk plays a crucial role in determining whether they adopt a cautious or proactive approach to decision-making. Perceiving a high level of risk might result in the adoption of conservative measures, which may restrict the allocation of funds toward growth projects. On the other hand, when entrepreneurs perceive a low level of risk, they are more likely to allocate resources aggressively, which allows them to pursue growth-oriented strategies. This study examines the impact of perceived risk on entrepreneurial performance by analyzing how risk perception influences decision-making and resource allocation. The results emphasize the significance of understanding perceived risk levels to improve business performance and boost employee motivation. Future research should conduct empirical investigations to examine the correlation between perceived risk and motivation, taking into account both inner and extrinsic elements to gain a thorough understanding of how they interact.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:rnd:arimbr:v:16:y:2024:i:3:p:328-338

DOI: 10.22610/imbr.v16i3(I).3864

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