The study aims at clarifying the role of risk management in improving business performance. In this study a literature review has been employed in order to understand the subject matters in managing business risks to increase company performance. The literature reviewed shows that risk management does contribute to the improvement of the business performance, measured as increase of company profits, decrease of business costs and, in turns, increase in economic proficiency. Therefore, the risk management impacts, in a positive way, the quality of a business that is embodied in improving the financial status of the company, increasing the profits, as well as decreasing the costs. Some recommendations are made for decision makers in the insurance business sector, who are required to be fully aware of the influence that risk management has on helping their business flourish. This is advisable through decreasing the cost of production, increasing profits, and improving financial business situation in their companies. Also, company decision makers are required to work continuously to develop risk management to increase profits, reduce costs, and improve the financial situation, and thus improve business performance.
Small and medium enterprises are considered as one of the most important sectors in the development of the Palestinian economy. The purpose of this paper is to explore whether risk management and strategic planning have a significant positive influence and to assess the influence of their applications on the sustainable business performance of SMEs in Palestine. A combination of qualitative and quantitative approaches was adopted; secondary data were obtained by a theoretical presentation of previous literature, and primary data was collected by a specific questionnaire. This was done through a random sample of (fifty) questionnaires distributed to owners or managers of SMEs in Palestine. In order to answer the study question, the researcher followed the analytical descriptive approach using SPSS and tested three subquestions which were clarified in the study. This paper’s results revealed that risk management and strategic planning have a significant positive influence on the sustainable business performance of SMEs in Palestine. Furthermore, not all Palestinian SMEs’ managers use strategic planning and risk management steps since most of them have family businesses that are suffering from a lack of management steps and improper management styles, where most of them tend to use an autocratic management style. Therefore, the researcher recommended SMEs’ managers should think and use strategy in their daily operations and use risk management practices to protect their financial resources so they can attain superior sustainable business performance.
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