Risk taking is any action with uncertain outcomes that may result in either benefit or harm; examples include starting a business, speaking in public, or trying a new skill.
What are some examples of positive risk taking?
Positive risk taking includes actions that expand capability or opportunity while managing potential downsides, such as volunteering to lead a project at work or enrolling in a course outside your field to build new skills.
In healthcare and social care, positive risk taking often means enabling independence—like when someone with a disability travels alone to a café to build confidence and social connections. The NHS puts strong emphasis on balancing autonomy with safety by assessing individual capacity and providing support where needed. For more on balancing risks and benefits, see our guide on potential resources.
What exactly is risk—and can you give an example?
Risk is the probability that exposure to a hazard will lead to harm or an adverse outcome; for instance, the risk of a car crash increases with speeding, according to traffic safety research.
The World Health Organization (WHO) defines risk in public health as the likelihood of disease or injury due to behaviors like smoking or poor diet. For example, smoking tobacco increases the risk of lung cancer by up to 12 times compared to non-smokers, as reported by the American Cancer Society. Learn more about health risks in our article on bathing and miscarriage risk.
How do you define risk taking?
Risk taking is any behavior where the outcome is uncertain and may affect physical, emotional, or financial well-being, whether you choose it consciously or not.
Research from the National Institutes of Health (NIH) shows risk taking shows up everywhere—from social situations (like public speaking) to financial decisions (like investing). It’s shaped by personality traits such as sensation-seeking and context, like peer pressure during the teen years. For more on personality and risk, read our piece on risk preferences.
Can you give an example of a business taking a risk?
A classic example is Apple launching the iPhone in 2007, betting $150 million on a product with no proven demand, despite skepticism about touchscreen phones.
According to Forbes, Apple’s gamble paid off big: the iPhone became a $200+ billion product line within a decade. Other business risks include entering a new market, adopting unproven tech, or acquiring a competitor—each with potential for huge rewards or major losses. For more on market risks, check out our article on demand schedules.
How many types of risk are there?
The two broad categories of risk are systematic (market-wide) and unsystematic (company-specific) risk.
Investopedia explains that systematic risks—like recessions—affect all companies, while unsystematic risks—such as poor management—are limited to individual firms. Diversification helps reduce unsystematic risk. For strategies to manage these risks, explore our guide on risk financing techniques.
What are the three main types of risk?
Widely recognized risk types include business risk, non-business risk, and financial risk.
Corporate Finance Institute defines business risk as operational uncertainties (e.g., demand swings), non-business risk as external shocks (e.g., natural disasters), and financial risk as debt exposure (e.g., interest rate hikes). For more on financial risks, see our article on secondary data examples.
What does positive risk mean?
A positive risk is an uncertain event with potential benefits that outweigh downsides, such as launching a new product line to capture a growing market.
In project management, positive risks (also called opportunities) include scenarios like a vendor delivering early, which can speed up project completion. The Project Management Institute recommends identifying and planning for such risks to maximize benefits.
What does positive risk taking look like in practice?
Positive risk taking is a structured process of weighing potential gains against possible harms before acting, often used in care planning to promote autonomy.
The Social Care Institute for Excellence (SCIE) suggests individualized risk assessments that consider a person’s goals, values, and support needs. For example, allowing an elderly person to walk to the park daily with a mobility aid may boost well-being despite fall risks.
How do positive and negative risk taking differ?
Positive risk taking is motivated by reward and tolerance for ambiguity, often in social contexts, while negative risk taking is driven by reward with low sensitivity to punishment across many domains.
A 2023 study in Nature Human Behaviour found that positive risk takers tend to engage in prosocial behaviors (e.g., trying a new group activity), whereas negative risk takers are more likely to engage in risky behaviors like reckless driving for thrills.
Why do people take risks at all?
The purpose of risk taking is to drive innovation, learning, and growth, as it pushes individuals and organizations beyond their comfort zones.
The Harvard Business Review points out that while failed risks can be costly, they often lead to critical insights. For example, 3M’s failed attempt to create a super-strong adhesive led to the invention of Post-it Notes, generating over $1 billion in annual revenue. For more on career growth through risk, see our article on career goal examples.
What role does risk taking actually play in life?
Risk taking expands opportunities by opening doors to new experiences, relationships, and achievements, whether in career, education, or personal development.
Psychologists at the American Psychological Association (APA) say moderate risk taking in adolescence builds resilience and self-efficacy. For adults, calculated risks like switching careers or relocating can lead to long-term fulfillment.
What are the six main health risk behaviors?
The CDC identifies six priority health risk behaviors: alcohol and drug use, behaviors contributing to unintentional injuries/violence, tobacco use, unhealthy diet, physical inactivity, and risky sexual behaviors.
These behaviors, highlighted in Youth Risk Behavior Surveys, are linked to leading causes of death and disability. For example, physical inactivity increases the risk of heart disease by 20–30%, according to the American Heart Association.
What are the five biggest risks businesses face?
Businesses face five core risk types: strategic, compliance, operational, financial, and reputational.
| Risk Type | Definition | Example |
|---|
| Strategic | Misalignment with long-term goals | Entering a declining market |
| Compliance | Legal or regulatory violations | Failing to meet data privacy laws |
| Operational | Internal process failures | Supply chain disruption |
| Financial | Monetary losses from investments or debt | Currency fluctuations affecting imports |
| Reputational | Damage to brand or public trust | Product safety scandal |
What risks do entrepreneurs face?
Entrepreneurial risk includes financial loss, competition, regulatory changes, and reputational harm, requiring careful planning to mitigate.
A report from the Small Business Administration shows about 20% of new businesses fail within the first year, often due to cash flow issues. Successful entrepreneurs assess risks by conducting market research, diversifying revenue streams, and securing contingency funds. For more on business risks, read our article on short sale risks.
Who are some famous people known for taking risks?
Famous risk takers include Neil Armstrong (first moon landing), Warren Buffett (unconventional investing), and Marie Curie (pioneering radiation research).
Armstrong’s 1969 moon landing was a calculated risk with a 50% chance of success by NASA’s estimates. Buffett’s early bets on undervalued companies defied market norms, while Curie’s research on radioactivity exposed her to dangerous radiation. These individuals show how calculated, purposeful risk taking can change industries and societies. For more on risk assessment in leadership, see our guide on preferred risk classifications.
