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CEOs from highest social class take the most risks, new study finds

Date:
February 18, 2016
Source:
University of Arkansas, Fayetteville
Summary:
Origins of social class explain risk-taking behavior – good or bad – by the top executive at the largest U.S. public corporations, a new study explains. In a survey of 265 chief executive officers, researchers found that CEOs with lower and upper social-class origins take greater strategic risks than those who grew up in middle-class families. Within the two high-risk categories, CEOs with upper social-class origins engage in higher levels of strategic risk-taking than their lower social-class counterparts.
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A new study by a University of Arkansas management professor shows how origins of social class explain risk-taking behavior -- good or bad -- by the top executive at the largest U.S. public corporations.

In a survey of 265 chief executive officers, Jennifer Kish-Gephart, assistant professor of management in the Sam M. Walton College of Business, and co-author Joanna Campbell at the University of Cincinnati found that CEOs with lower and upper social-class origins take greater strategic risks than those who grew up in middle-class families. Within the two high-risk categories, CEOs with upper social-class origins engage in higher levels of strategic risk-taking than their lower social-class counterparts.

"Our work suggests that social-class origins exert a lasting influence on executive decision-making," said Kish-Gephart. "In short, childhood social class matters. Even though inequality has lately come to the fore as a public issue, two widely held American beliefs persist -- first, that the U.S. is largely a classless society and, second, that people shed or discard the vestiges of their social class roots when they achieve upward mobility. Countering these beliefs is, I think, an important contribution of our study."

The study also found that college choice also influenced risk-taking for the CEOs surveyed.


Story Source:

Materials provided by University of Arkansas, Fayetteville. Note: Content may be edited for style and length.


Journal Reference:

  1. J. J. Kish-Gephart, J. T. Campbell. You Dont Forget Your Roots: The Influence of CEO Social Class Background on Strategic Risk Taking. Academy of Management Journal, 2014; 58 (6): 1614 DOI: 10.5465/amj.2013.1204

Cite This Page:

University of Arkansas, Fayetteville. "CEOs from highest social class take the most risks, new study finds." ScienceDaily. ScienceDaily, 18 February 2016. <www.sciencedaily.com/releases/2016/02/160218084252.htm>.
University of Arkansas, Fayetteville. (2016, February 18). CEOs from highest social class take the most risks, new study finds. ScienceDaily. Retrieved May 8, 2017 from www.sciencedaily.com/releases/2016/02/160218084252.htm
University of Arkansas, Fayetteville. "CEOs from highest social class take the most risks, new study finds." ScienceDaily. www.sciencedaily.com/releases/2016/02/160218084252.htm (accessed May 8, 2017).