Abstract:
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 risktaking 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.
