Navigating Uncertainty: The Role of Leadership, Organisational Culture, and Psychological Preparedness in Adaptive Risk Taking

Abstract

The research studies the psychological predictors of risk taking in a rapid, constantly changing work environment within the finance industry. Touching upon various important domains such as leadership, organisational culture, behavioural finance, psychology, and human dynamics at work, the research explores how emotional, cognitive, and dispositional resources come together and interact in high-stakes finance environments. Targeting an understanding of risk-taking behaviour, this study, with a sample size of 436 financial market analysts, examines what factors shaped financial risk-taking behaviour and finds it to be positively aligned with and driven by emotional intelligence, openness to experience (as an aspect of the Big Five personality traits), and the pathway-thinking dimension of hope. The neuroticism characteristic of personality was negatively aligned with risk-taking behaviour. Thus, the idea is to look at psychological dimensions not just as traits of an individual but as instruments that human resources (HR) within an organisation bring to the table, which can be leveraged to yield better workplace outcomes. This perspective is being looked at from the leadership lens in this paper to understand what can be done from that dimension in terms of interventions, cultural frameworks, and provisions of psychological safety. As a micro study, this paper also aims to build a larger macro framework to guide how psychological attributes can be utilised in high-stakes, volatile environments to bring better outputs sustainably.