User:Job89/sandbox

Overview
The traditional view of human decision processes provides that people make rational decisions predicated on maximizing pleasure or gains and minimizing pain or losses (Denes-Raj, V., & Epstein, S. 1994). However, in the world of business, investors tend to deviate from rationality when making financial decisions (Kuhnen, C. M., & Knutson, B. 2005). These decisions can have a serious financial and social implications, therefore the consideration of risk necessarily involves weighing potential gains against potential losses.

Pfleeger et al. (2000) provides that a risk is an unwanted event that has negative consequences. Ideally, we would like to determine whetherany unwelcome events are likely to occur during development or maintenance. Then, we can make plans to avoid these events or, if they are inevitable, minimize their negative consequences. We use risk management techniques to understand and control the risks on our projects (Pfleeger, S. L. 2000).

The common perception of risk is that it is a decision making process that is associated with a high likelihood of a negative outcome occurring (Mishra, S. 2014). This negative outcome will impact an individuals risk-taking propensity; which is an individual’s current tendency to take or avoid risk, (Tang, J., & Tang, Z. 2007). This perspective has a signifcant impact on an individuals capacity to make any decision as almost every human and non-human animal decision an element of risk must be applied.

Evidence suggests that the path to being successful in the world of business is paved with ambiguity and uncertainty (HAIFENG ZHAOSIBIN, W. 2014). Motivation for success is often the key determinant for the success or failure of many business ventures. There in the world of business, many of the choices made will be based on a thorough and sound decision making process,although in a range of circumstances this may not necessarily lead to the desired outcome, therefore we must take on a large element of risk in our decision making (Weller, J. A., Ceschi, A., & Randolph, C. 2015).

This decisions making process produces the release of dopamine after an unexpected reward makes humans willing to take risks (Zwieg, 2002). This is particularly relevant as a lot of huge financial gains have come from decisions that had a large amount of risk involved. Therefore the behavior of those involved in such dealings would be compared to those of an individual who engages in gambling or addictive behaviors.

Extrinsic Motivation
The term extrinsic motivation refers to the individual’s inclination to perform tasks in order to attain positive rewards, such as tangible or verbal rewards (SUN YOUNG, S., & JIN NAM, C. (2009). This will affect the behavior of the individual as they may only wish to engage in certain activities for a tangible reward, in business, this reward would often be in the form of a financial incentive. Extrinsic motivation can often undermine intrinsic motivation and self determination. The possibility of financial incentives have the potential to control employee behavior externally, reducing (Deci & Ryan, 1985), by controlling behavior externally, extrinsic can often undermine the likelihood of an employee taking risks, but in business, individuals are often chasing money, and Jenkins et al. (1998) presents that if we get our employees to just go after money, we then create a culture where people are only participating in these activities to create more money,

Intrinsic Motivation
Intrinsic motivation is a natural motivational concept that arises spontaneously out of the needs for self-determination and competence (Deci & Ryan, 1985b, 1991 -CIted in Reeve, J., Nix, G., & Hamm, D. 2003). One is said to be intrinsically motivated to perform an activity when he receives no apparent rewards except the activity itself. This intrinsic motivation might be either innate or learned. Deci (1974) presents that If a person's feelings of competence and self-determination are enhanced, that their intrinsic motivation will increase. If the feelings of competence and self-determination are diminished,his intrinsic motivation will decrease. This concept would then suggest that some rewards or feedback will increase intrinsic motivation through this process and others will decrease it, either through this process or through the change in perceived locus of causality process (Benabou, R., & Tirole, J. 2003).

The key difference between these two types of motivation are apparent through Hull’s drives, which are primarily involved in extrinsic motivation and non drives which are concerned with intrinsic motivation. Extrinsic motivation entails the Hull-Spence drives of hunger, thirst, sex, and pain/anxiety avoidance. In contrast, non survival needs, or so-called ego motives such as curiosity, competence, autonomy, and play, comprise intrinsic motivation (Reiss, S. 2012). This concept plays out in the world of business, with a range of extrinsic and intrinsic tools being made use of in different scenarios. The use of rewards (extrinsic motivation) can encourage employees can take more risk, whilst engaging in risky behavior for the thrill of it, and to show greater competence to oneself would be an example of intrinsic motivation.

Implicit Needs
Implicit motives are unconscious recurrent preferences that arouse motivation in a task (McClelland, Koestner, & Weinberger, 1989). These motives are broken down into three key areas. Gröpel & Kehr (2014) describe these three motives as:
 * 1) Achievement Motive - completing a task in a proficient manner;
 * 2) Power Motive - The ability to exert a degree of influence or control over people or a situation; and
 * 3) Affiliation Motive - The individuals attached importance to maintaining and engaging in personal relationships.

McClelland Need Theory
Implicit motives are dispositions that have traditionally been labeled needs, for example, need for achievement (nAch), need for power (nPower), and need for affiliation(nAff). McClelland considers these concepts to be developed early in life and to be an important element of human decision making as they drive, direct and select behaviors (Spangler, W. D. 1992). These three facets of behavior help to understand how and why people make the decisions that they do.

Need for Achievement (nAch)
McClelland (1961) argued that individuals with need for achievement prefer tasks that involve skill and effort, provide clear performance feedback, and were of moderate challenge or risk. This is supported by research conducted by Elliot and Dweck (1988) suggested that risk bearing behavior was the major indicator that separated those who were successful in business from those who were not so successful. These two theories help explain a number of reasons why people would engage in high risk decisions. An individual who is highly motivated by the need for achievement, and their achievement goal is to have a successful career in business, then their direct implicit motive into doing the activity that is required to achieve this goal (McClelland, D. C., Koestner, R., & Weinberger, J. 1989). However, they will not be inclined to be involved in activity that has moderate to high levels of risk.

Need for Power (nPower)
The need for power is defined as the desire to have impact on others by influencing, persuading, helping, arguing with, or attacking them (Mclelland et al 1989). Th need for power is closely aligned with power motivation, or the need for power, which refers to an individual’s intensity of desire to influence others, acquire recognition, and gain social status (JIE, Z., YUN, F., & XU, Z. 2015). Mclelland et al (1989) used a series of test to determine the effect of power of motivation, the goal was to make individuals believe that a high score on a social perception test would indicate that they were in a position of power and from this, they could influence other or exert an element of control over their peers. The results conclusively proved that power motivated people to outperform others, as long as they believed that the results would provide them with a greater degree of power (Winter, D. G,1991).

This concept highlights that individuals will engage in high pressure situations that possess a great deal of risk if they perceive that this could potentially increase their ability to exert influence and extend their power over others.The success of executive will often depend on their power motivation, those whose score high in power and high in responsibility will generally have successful career, whilst those who have power and score low in responsibility will often engage in aggressive impulsive behaviors, which will hinder their ability to be successful.

Sensation Seeking & Risk Theory
Zuckerman (1994) was the early proponent of sensation seeking theory and defines this theory as a a trait defined an individual seeking a range of different circumstances which are diverse, often quite complex and highly intense experiences and the willingness to encounter a dramatic range of risks for sake of the experience and the emotional or physical high which would be derived from such an experience (Zuckerman, 1994).

Sensation seekers find high risk financial deals entertaining and the high possibility of something going wrong, only seems to make the matter more exciting. It is the variety, novelty, and perceived risk of these deals that makes them entertaining (Grinblatt, M., & Keloharju, M. 2009). The risk that is undertaken would not be considered rational or sensible by a regular human being, instead these high risk deals are driven by a considerable behavioral component. This is caused by a concept known as overconfidence.

Overconfidence
Overconfidence is the tendency of people to overestimate the accuracy of their knowledge (Sharma, V., & Shakeel, M. 2015). . Grinblatt et al. (2009) provide a similar definition and provide that overconfidence is the tendency to place an irrationally excessive degree of confidence in one’s abilities and beliefs (Grinblatt, M., & Keloharju, M. 2009). This overconfidence was an everpresent in the collapse of Enron, where the most obivous issue in the business was that individuals possessed an incredible amount of over confidence. The company had built a culture that made individuals believe they could handle an exceptional level of risk without fear of danger or repercussion (Hall, K. 2006).

Gambling and Business
reveals that a similar pattern of human psychology emerges in both the business of investment and gambling. Recently scientists have used magnetic resonance imaging (MRI) to study men’s brain activity. They found that the same part of the brain responds similarly to gambling wins as it does to cocaine use (Lainas, J. G. 2008).

Money and the Brain
The human brain is a complex and complicated organ which seems to have a a never ending series of developments and changes as the human beings evolve. When an individual wins, loses or even participates in an activity which requires them to risk a sum of money, a range of emotions are stirred up inside, these emotions are hope, sunrise, regret, greed and fear (Zweig, 2007). There is an important relationship to identify between the psychology involved in the investment element of business and that in gambling. The same part of the brain is affected when people are gambling as when they making a significant financial decision (Lainas, J. G. 2008).

When faced with a choice to pursue a course of action that brings an immediate reward at the risk of incurring future negative consequences, they choose the immediate reward and ignore the future consequences, this is particularly apparent when people are forced to deal with situation which will result in significant financial gain. As Zweig (2002) presented earlier, The less likely or predictable a reward is, the more active your dopamine neurons become and this will continue to make the individual feel elation, almost in a state of euphoria.

Key Motivational Theories
Achievement motivation theory (McClelland, D. C., Atkinson, J. W., Clark, R. A., & Lowell, E. L. 1953), the strength of motive to achieve success relative to avoiding failure provides an individual with achievement motivation. In the corporate business world, this desire will generally be relative to high standards of excellence. Atkinson and Feather (1966) suggested that achievement motivation combined two kinds of personality constructs: tendency to approach success and tendency to approach failure.

When doing business, the existence of risk is high, and as the financial stakes get higher, this element of risk also increase. The idea that a great reward will be be provided upon the completion of the task motivates some, others are even more motivated when the magnitude of the reward may be more uncertain (LUXI, S., FISHBACH, A., & HSEE, C. K. (2015). This theory provides that three key criteria must be met in order for
 * 1) Uncertain rewards can increase time & resource investment from the individual;
 * 2) From an economic perspective,uncertain rewards can be less expensive because an uncertain reward can be more motivating than a certain reward of a higher expected value; and
 * 3) Uncertainty can be a source of positive intrinsic motivation and therefore increase an individuals motivation and once the task is completed, their overall satisfaction.

Self Determination Theory
Self determination theory provides when employees are externally motivated, they engage in activities because of external reasons, such as to receive a reward or to avoid punishment. In contrast, employees who are motivated in an internal manner do things because of internal, yet instrumental reasons, such as avoiding feelings of worthlessness, shame, or guilt (Vandercammen, L., Hofmans, J., & Theuns, P. 2014). These theories would suggests that extrinsic goal pursuits tend to be associated with poorer well-being and less optimal functioning than do intrinsic goal pursuits (Vansteenkiste, M., Lens, W., & Deci, E. L. 2006).

According to Self Determination theory, motivation occurs along a continuum, which begins at amotivation, which is completely bereft of self determination, to intrinsic motivation, which is completely determined by the individual. In addition to these two concepts is extrinsic motivation, w:Extrinsic Motivation.

Self-determination theory (Deci and Ryan 2000) provides that here are three key factors to allow for intrinsic motivation, namely, competence, autonomy and relatedness.

These concepts are broken down further (Deci, E. L., Ryan, R. M., Gagné, M., Leone, D. R., Usunov, J., & Kornazheva, B. P. 2001): If an employee is not interested in their job, the risk of the decision making does not appeal to them then the involve in such a program will require the employee to make a link between engaging in such a risky decision and a tangible reward or a degree of approval from the boss and another important figure for the individual (Deci, et al. 2001). This would mean that the employee is going to be extrinsically motivated.
 * Competence requires succeeding at optimally challenging tasks and attaining desired outcomes;
 * Autonomy requires experiencing choice and feeling like the initiator of one’s own actions ; and
 * Relatedness requires a sense of mutual respect, caring, and reliance.

Extrinsic Motivation
External Regulation: Is when an individual who engages in behaviour to avoid negative consequences, this is prominenet in business, as if you not meeting your budget, the likelihood of an employee losing their job is extremely high. This behavior will occur egardless of whether the goal of behavior is to obtain rewards or to avoid sanctions, the individual experiences an obligation to behave in a specific way. Therefore if their is firm wide culture of high risk for high reward, then the employee would behave in a manner which suits that culture (Guay, F., Vallerand, R. J., & Blanchard, C. 2000 & Chantal, Y., Vallerand, R. J., & Vallieres, E. F. (1995).

Integrated Regulation: occurs when one comes to experience an organization among regulatory processes within which they can harmoniously coexist. This particular form of extrinsic motivation does possess a degree of autonomy, it is not intrinsic. The activity may not be interesting for the individual, but may be of particular important for personal goals. If an employee does not particularly like having to make high risk decisions, but to get to be the manager of a particular firm then they must make such decisions, then they will do that, but they are still not necessarily engaged by the activity.

Identified Regulation: occurs when a behavior is valued and perceived as being chosen by oneself. The individual does the activity because they perceive it to be the right thing to do, even though they do truly believe in doing it. It is often just completed as a means to an end. In this situation, the employee participates in the behaviors as it appears to be the right thing to do, although they may not truly be buying in to the experience. They are participating in a behaviors as they might value being in the workplace and want to work for a particular firm.

Introjected Regulation: occurs when one performs the activity by internal pressure such as guilt and self-approval, this means an employee acting in accoradance with behaviours or else they may be overcome with guilt if they do not.

How does the concept relate to motivation.
Motivation can often change people and be the catalyst for change, not only in their behavior but also in how they view and define themselves (Lickel, B., Kushlev, K., Savalei, V., Matta, S., & Schmader, T. 2014). The results suggested that there may be important individual differences with respect to the influence of motivation on non optimal responses. With an increase in incentive, men made more, and women made more non optimal responses (Denes-Raj, V., & Epstein, S. 1994).

There is an argument for the potential for risk taking increasing dramatically in business as the executive levels tend to be dominated by men. Young males in environments that would be considered to be highly competitive tend to engage in risky behavior due to disparity in their current state and their desired goal state (Mishra, 2014). Mishra (2014) explains that this desired state is derived from the success of competitors, therefore extrinsically motivated, and risk taking behavior will increase an the individual attempts to minimize the difference between the current and desired state of affairs.

research conducted by Capa et al (2008) have established that difficult and specific goals lead to higher levels of effort and performance than easy and vague goals (Capa, R. L., Audiffren, M., & Ragot, S. 20008).

Cognitive evaluation theory suggested first that external factors such as tangible rewards, deadlines, surveillance, and evaluations tend to diminish feelings of autonomy, prompt a change in perceived locus of causality from internal to external and undermine intrinsic motivation (Gagné, M., & Deci, E. L. 2005).

The Brain
When an individual makes a decision, they may seek out information from a industry expert or a trusted, well educated associate. An individual could have all the appropriate information to make a decision and can identify that a sensible decision could provide a reasonable return. This concept is further explored by Suen et al (2014) when individuals defy authority, or believe they are doing this to make an investment decision there is increased activation of the anterior cingulate cortex and the superior frontal gyrus, and this increased activation makes an argument that decision making may be based on imbalances in activity in the brain. It natural for people to go back to previous decision that they have made and rely on those to inform future decision making. This brain activity would indicate switching from a reliance on the advice to relying on previous trials or previous experience to guide decision-making

Human effects of motivation
Humans are often willing to sacrifice their own economic payoffs in the interest of being honest, even in the absence of punishment or reputation factor (Zhu, L., Jenkins, A. C., Set, E., Scabini, D., Knight, R. T., Chiu, P. H., & Hsu, M. 2014)

Key points
People with high power motivation often satisfy this motivational need through leadership roles or by pursuing a career as a business executive, as this role will result in legitimate interpersonal power over others. this will satisfy the requirements of this particular personalty type, these roles also cater for Individuals need for risk, and these individuals who fill these role with a high degree of power, are much more likely tolerate a greater level of risk, in order to take greater reward (JIE, Z., YUN, F., & XU, Z. 2015).

How can this knowledge be applied?
Tang et al (2007) suggests that risk-taking propensity relates to performance negatively although risk bearing is a fundamental part of business, because a person cannot know with certainty if the desired products can be produced.

In high level business decision making, risk forms a large part of the work that is undertaken, and research conducted by Mishra (2014) indicates people are more likely to engage in risky aggressive and criminal conduct if they are unsuccessful at economic competition, therefore if an individual is already extremely competitive, then several less than favorable outcomes will only exacerbate risky behaviors.

Decision Making
The level of risk taking in decision making will be affected by the relationship between the decision makers’ education level and their risk preferences (YONGHAI, W., WEI, Z., & KE-CHIUN, C. 2013). Therefore from this concept, one would assume that someone who is more highly educated would engage in less risky behaviors. Research conducted in China by Yonghai et al (2013) presents that corporations run by leaders who have a higher education level to inform their decision making experience longer and more successful periods of growth, However, a study conducted by Greenberg (2013) indicated that individuals who are asked to imagine that they will be wealthy in the future will make significantly more risky decisions. The concept is well supported by Coval and Shumway (2005) who found that if a trader lost a significant amount of money in the morning, then the afternoon would be much more risk intensive as the trader attempted to chase the money that they had lost. This study was focused primarily on people who were trading in significant markets which would indicate a high level of education. Therefore from these two contrasts that culture plays a signifcant role in the motivation to engage in risk taking behavior in business.

Test Yourself!
{ Intrinsic Motivation is defined as?=""} - An old wooden ship. - The value of a company, stock, currency or product determined through fundamental analysis without reference to its market value. - An unconscious recurrent preferences that arouse motivation in a task. + A natural motivational concept that arises spontaneously out of the needs for self-determination and competence.

{Sensation Seeking & Risk Theory was originally proposed by?=""} - Mark Zuckerberg - Marvin Zindler + Marvin Zuckerman - Alfred Binet

{The Three key criteria for McClelland Need's Theory are?=""} - Need for Shelter, Need for Warmth and Need for Speed. - Need for Goals, Needs for Shelter and Need for Power + The Need for Achievement, Need for Power and Need for Affiliation. - Need for Warmth, Need for Power Need for Challenges

{The neurotransmitters that helps control the brains center for pleasure and reward is?=""} + Dopamine - Seratonin - Neuron - Homeostasis