Despite the variance in all the definitions of entrepreneurship, one common theme found in the entrepreneurship literature revolves around differences in the predisposition among entrepreneurs toward risk-taking. Risk-taking propensities differ from business to business and from individual to individual, although it is clear that without it, entrepreneurship would not be an object of fascination to the same extent as it is today. Risk-taking propensity could effectively be conceptualized as an individuals’ orientation toward taking chances in any decision-making scenario.
The total risk management in a business could be seen from a number of different perspectives; strategic-, tactical- and operational risk management. The strategic focuses on risks from the business’ strategic goals which could include new types of risks in itself (launching a new product on a new market, new innovations, etc.). The tactical risk management aims to handle the tactical decisions of the business and thereby takes responsibility for handling the risks associated with the yearly planning. The operational risk management is related to the daily operations of the business (Wendestam, 2008).
For the sociologist Niklas Luhmann the term 'risk' is a neologism that appeared with the transition from traditional to modern society. "In the Middle Ages the term residuum was used in highly specific contexts, above all sea trade and its ensuing legal problems of loss and damage." In the vernacular languages of the 16th century the words rischio and riezgo were used. This was introduced to continental Europe, through interaction with Middle Eastern and North African Arab traders. In the English language the term risk appeared only in the 17th century, and "seems to be imported from continental Europe." When the terminology of risk took ground, it replaced the older notion that thought "in terms of good and bad fortune." Niklas Luhmann (1996) seeks to explain this transition:
"Perhaps, this was simply a loss of plausibility of the old rhetoric's of Fortuna as an allegorical figure of religious content and of prudential as a (noble) virtue in the emerging commercial society." Risk-taking refers to the tendency to engage in behaviors that have the potential to be harmful or dangerous, yet at the same time provide the opportunity for some kind of outcome that can be perceived as positive. Driving fast or engaging in substance use would be examples of risk-taking behavior. They may bring about positive feelings in-the-moment. However, they can also put you at risk for serious harm, such as an accident.
Entrepreneurship and Risk taking:
Entrepreneurship is a process in which the entrepreneur establishes new jobs and firms, new Creative and growing organizations associated with risk – taking by new and creative ideas and entrepreneurship identification of the new opportunities and resources mobilization. It results in introducing a new product or service to society. In Britain encyclopedia entrepreneur means "a person who organizes and manages a job or economic association and receives its risks". The origin of word entrepreneurship is French. This word is equivalent of French Enterprendre and English undertake that was translated to Entrepreneurship in English by John Stewart Mill.
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