The impact of leader personality on inclination to adapt the business model : decision-making in environments of perceived threat and perceived opportunity.

Abstract

This master thesis is an empirical research study designed to examine the possible moderating effect of personality traits on the relationship between risk domains and business model adaptation. Different theories of risk predict opposite firm and individual behaviour in domains of potential loss and domains of potential gain. It is hypothesised that one of the variables that moderate the relationship, and thereby explains how contradictory theories are supported by various studies, is individual leader personality traits. 134 Norwegian leaders participated in a survey to measure personality traits and an experiment to test for inclination to adapt the business model in different scenarios of risk. Results indicate that there is little support for most of the hypotheses predicting personality to significantly impact the way leaders make business model adaptation decisions. However, leader Emotionality was significantly related to low risk-taking in the domain of potential gain. As business model adaptation can be a source of sustained competitive advantage and value creation, the findings have exciting theoretical and practical implications. The findings indicate that there are meaningful applications of personality tests in theory and practice. Deliberate recruitment strategies when recruiting leaders and top management team members may help firms better facilitate business model adaptation, and result in long-term survival.