The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe
Background: At the dawn of the 21st century, Zimbabwe started moving towards dangerous levels of the infamous hyperinflation trajectory that made management of businesses a nightmare. Many businesses failed. Aim: This study seeks to explore if entrepreneurship, and in particular the aspects of risk...
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doaj-a38bc51e274e403c9b7495ae747e9ae32020-11-25T00:27:26ZengAOSISThe Southern African Journal of Entrepreneurship and Small Business Management2522-73432071-31852019-04-01111e1e1510.4102/sajesbm.v11i1.14273The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary ZimbabweOliver Kapepa0Jurie van Vuuren1Department of Entrepreneurship, University of Pretoria, PretoriaDepartment of Entrepreneurship, University of Pretoria, PretoriaBackground: At the dawn of the 21st century, Zimbabwe started moving towards dangerous levels of the infamous hyperinflation trajectory that made management of businesses a nightmare. Many businesses failed. Aim: This study seeks to explore if entrepreneurship, and in particular the aspects of risk-taking and tolerance of failure, could have saved the few companies that survived the menace that ravaged the insurance industries among many other sectors of the economy. Setting: The study looks at this particular entrepreneurial behaviour of risk-taking among insurance companies in Zimbabwe during the hyperinflationary environment that ravaged and defied economic logic and fundamentals. Savings were being eroded at a pace faster than anywhere in the world ever before, taking a toll on businesses as they struggled to survive. Methods: Using a survey sample of insurance companies in Zimbabwe, a quantitative approach was adopted. Questionnaires were used to extract data from participants to establish the nature and extent of risk-taking, and in particular tolerance for failure during this period. Therefore, tolerance of failure in corporate entities is discussed in this article as a critical aspect of risk-taking that enhances entrepreneurial innovation and ultimate prospects of corporate prosperity among insurance companies. A measure is developed to gauge the extent of tolerance of failure from the perspective of employees in the insurance industry in Zimbabwe. Results: The benefit of tolerance of failure or the lack thereof was measured on the dimension of profitability and growth. Results revealed that tolerance of failure is a necessary entrepreneurial virtue that encourages knowledge acquisition by both experimental and experiential learning – a risk element that also spurs entrepreneurial innovation and ultimately encourages both profitability and growth of the business entity, if well managed. Conclusion: The study concluded that firms that tolerate failure are more likely to be entrepreneurially innovative and perform better than those that are risk-averse and do not tolerate failure.https://sajesbm.co.za/index.php/sajesbm/article/view/142Entrepreneurshiprisk takingtolarance of failureinsurance firmsentrepreneurial performanceZimbabwe. |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Oliver Kapepa Jurie van Vuuren |
spellingShingle |
Oliver Kapepa Jurie van Vuuren The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe The Southern African Journal of Entrepreneurship and Small Business Management Entrepreneurship risk taking tolarance of failure insurance firms entrepreneurial performance Zimbabwe. |
author_facet |
Oliver Kapepa Jurie van Vuuren |
author_sort |
Oliver Kapepa |
title |
The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe |
title_short |
The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe |
title_full |
The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe |
title_fullStr |
The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe |
title_full_unstemmed |
The importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary Zimbabwe |
title_sort |
importance of tolerance for failure and risk-taking among insurance firms in hyperinflationary zimbabwe |
publisher |
AOSIS |
series |
The Southern African Journal of Entrepreneurship and Small Business Management |
issn |
2522-7343 2071-3185 |
publishDate |
2019-04-01 |
description |
Background: At the dawn of the 21st century, Zimbabwe started moving towards dangerous levels of the infamous hyperinflation trajectory that made management of businesses a nightmare. Many businesses failed.
Aim: This study seeks to explore if entrepreneurship, and in particular the aspects of risk-taking and tolerance of failure, could have saved the few companies that survived the menace that ravaged the insurance industries among many other sectors of the economy.
Setting: The study looks at this particular entrepreneurial behaviour of risk-taking among insurance companies in Zimbabwe during the hyperinflationary environment that ravaged and defied economic logic and fundamentals. Savings were being eroded at a pace faster than anywhere in the world ever before, taking a toll on businesses as they struggled to survive.
Methods: Using a survey sample of insurance companies in Zimbabwe, a quantitative approach was adopted. Questionnaires were used to extract data from participants to establish the nature and extent of risk-taking, and in particular tolerance for failure during this period. Therefore, tolerance of failure in corporate entities is discussed in this article as a critical aspect of risk-taking that enhances entrepreneurial innovation and ultimate prospects of corporate prosperity among insurance companies. A measure is developed to gauge the extent of tolerance of failure from the perspective of employees in the insurance industry in Zimbabwe.
Results: The benefit of tolerance of failure or the lack thereof was measured on the dimension of profitability and growth. Results revealed that tolerance of failure is a necessary entrepreneurial virtue that encourages knowledge acquisition by both experimental and experiential learning – a risk element that also spurs entrepreneurial innovation and ultimately encourages both profitability and growth of the business entity, if well managed.
Conclusion: The study concluded that firms that tolerate failure are more likely to be entrepreneurially innovative and perform better than those that are risk-averse and do not tolerate failure. |
topic |
Entrepreneurship risk taking tolarance of failure insurance firms entrepreneurial performance Zimbabwe. |
url |
https://sajesbm.co.za/index.php/sajesbm/article/view/142 |
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