Document Type : Research Paper
Authors
Abstract
In the competitive world of today, which is marked by uncertainty, people behavior towards risk is a success factor in decision - making. The present paper has investigated the effect of the extent of risk - taking by managing directors on financial performance of the companies listed in Tehran Stock Exchange. The managing directors' extent of risk - taking was measured by using the standard questionnaire designed by Likert Scale. In order to measure the said companies' financial performance, these indicators were used: Return on Assets, Return on Stockholders Equity, Sale Growth & Net Profit Growth. Given that attitude towards risk vary in profit and loss situations, the relation between the extent of risk - taking and each of the financial indicators was studied separately in either situation. Results of the study only indicate a significant direct relation between a managing director's extent of risk - taking and Return on Assets in profit situations. Regarding the relation between the managing directors' personal characteristics and their extent of risk• taking as byproducts of the research, there is only a significant direct relation between the managing directors' risk - taking extent and their age and managerial experience in loss situations.
)