Risk-taking in software companies: a sector study in Rio Grande do Sul

Abstract

This article approaches risk-taking as one of the dimensions of an entrepreneurial orientation (EO) in an organization. The research aims to consolidate a set of components that characterize risk-taking in software companies, based on the literature and on organizational practice. The review of the theory resumes the concepts of risk-taking and EO, defined as the organization's inclination to undertake risky projects and the preference of managers to take bold action in order to achieve the organizational goals. The research method employed was exploratory and qualitative, with data collection through in-depth interviews conducted with executives from 13 notably entrepreneurial software organizations in the state of Rio Grande do Sul, Brazil. The results indicate that the companies are characterized by risk-taking behavior, even though this manifests itself in different ways. The overall risk is evident because of the sector's dynamism, with constantly changing technologies. The business risk is the one that stands out the most, due to competition with large companies and multinationals. The decision-making risk tends toward a balance, with some decisions that are daring and others that are more conservative. The financial risk is expressed with a measure of distaste. The article ends with the consolidation of a set of elements that characterize risk-taking in the researched organizations, in which calculated risk stands out as a new element.