Risk perception and strategic decisions: qualitative analysis based on top management team's characteristics in Chinese LNG import sector

Abstract

Global energy demand continues to rise, positioning liquefied natural gas (LNG) a crucial component in enabling China's energy transition. Within the international LNG market, China is already a major participant. However, China's LNG importers face the critical challenge of making long-term procurement decisions in an increasingly uncertain environment—a key element in ensuring the security and stability of the nation's energy supply.

This study adopts a qualitative research design guided by grounded theory. Semi-structured interviews serve as the primary data collection tool. Interviews were conducted with Top Management Team (TMT) members from leading Chinese LNG importing companies, covering state-owned, private, and joint ventures. The study exploresfactors that shape TMT’s strategic decision making and develops a strategy decision making framework aimed at strengthening energy supply security. Central to this framework is the role of TMT risk perception, with a specific analysis of its connections with TMT characteristics such as industry networks, business experience, cognitive style, and self-actualization needs.

The findings reveal that TMT characteristics do not directly influence long-term LNG procurement strategies—encompassing contract duration, pricing mechanisms, and procurement models. Instead, their impact is indirectly shaped by risk perception across four dimensions: geopolitical, market, logistics, and policy risks. Additionally, organizational type—state-owned, private, or joint venture— shapes the relationship between TMT traits and risk perception, reflecting the contextual differences in decision-making dynamics.

This research offers substantial theoretical and practical contributions. Theoretically, it enriches Upper Echelons Theory by clarifying how risk perception connects TMT characteristics and strategic outcomes, while also extending risk perception theory to the organizational strategy level within the energy import sector. Practically, the proposed framework provides actionable insights for Chinese LNG importers to optimize TMT composition, enhance risk perception, and improve strategic decision-making in long-term procurement. It also informs policymakers in crafting differentiated energy policies that support China’s sustainable development of its LNG industry and bolster national energy security.