*3.2. Risk-Taking and Its Relationship with Business Performance*

Risk is the probability that there is a chance of obtaining less than the expectation [58], which is deemed as inevitable for entrepreneurs when conducting any business. Historically it is embedded with entrepreneurship ever since the term entrepreneurship was first coined by Cantillon in the 1980s [59–61]. Successful entrepreneurs are those who are ready to take present ambiguity for future prospects [62] but risk must be judgmental and calculated [63]. A study in Australia found that risk-taking that involved taking calculated risks had a positive impact on firm performance, but taking risks that were considered daring actions were considered detrimental to firm performance [46]. Davis [51] found a positive relationship between two aspects which is supported partially by Kreiser et al. [39]. Kreiser in his study showed organizations adopting a modest level of risk-taking were the highest performers when compared with their counterparts who assume very high or very low levels of this dimension. Rauch et al. [45] found a positive relationship but the intensity of the relationship was less than the other factors of EO. On the other hand, Naldi et al. [64] and Sebora, Lee, and Sukasame [65] found a negative relationship. The reason explains the negativity is that in the case of SMEs the owners try to keep control their business with family fund as well as through involvement of family members. Additionally, the culture of risk aversion could be a reasoning factor.
