A literature review of small and medium enterprises (SME) risk management practices in South Africa

Smit, Yolande

doi:10.5897/ajbm11.2709

Cited by 56 publications

(25 citation statements)

References 24 publications

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“…Business owners are always frustrated when it comes to the intensity requirement or compliance with regulatory and financial matters couple with the decisions that have to do with the future of their businesses, progress achieved in business strategic objectives and timely risk mitigation activities [40]. As earlier mentioned many SMEs owners are not experienced in identifying, managing or mitigating risks fundamental to the success of their businesses which stem from the business philosophy of the owners [41]. In order to give their businesses a leap and sustain continuity, there is need for management of SMEs to appoint a professional or an expert to on continuous basis assess risks facing their enterprises.…”

Section: The Institution Of Risk Oversightmentioning

confidence: 99%

Enterprise Risk Management and the Survival of Small Scale Businesses in Nigeria

Kehinde¹,

A²,

Benjamin³

et al. 2017

Int J Account Res

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Section: The Institution Of Risk Oversightmentioning

confidence: 99%

Enterprise Risk Management and the Survival of Small Scale Businesses in Nigeria

Kehinde¹,

A²,

Benjamin³

et al. 2017

Int J Account Res

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“…In Thailand, small and medium enterprises (SMEs) are as important for economic development as larger firms and there are more than 3 million SMEs in Thailand which contribute 37 percent of the total productivity in Thailand and 80 percent of total employment (Office of Small and Medium Enterprise Promotion, 2017). However, SMEs in Thailand are under great pressure from increasing competition fuelled by globalization, legislation, and the relaxing of trade barriers, as well as having to address increased market expansion due to emerging technology and innovation (Smit & Watkins, 2012). Risk management is also a considerable problem for Thai SMEs.…”

Section: Introductionmentioning

confidence: 99%

“…Risk management is also a considerable problem for Thai SMEs. For example, risk assessments are normally linked to specific disciplines which are not necessarily understood by the SME's owner and managers (Smit & Watkins, 2012). In addition, although the SME's owner and managers may be able to identify obvious risks, their depth of knowledge of risks which may potentially threaten their business may impede their control activities as they may fail to identify indirect risks, or to take account of inter-connections between risks (Watt, 2007).…”

Section: Introductionmentioning

confidence: 99%

The Influence of Enterprise Risk Management on Firm Performance Measured by the Balanced Scorecard: Evidence from SMEs in Southern Thailand

Suttipun¹,

Siripong²,

Sattayarak³

et al. 2019

CMUJASR

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Even though enterprise risk management (ERM) has been extensively studied in recent years, the influence of ERM on firm performance in small and medium enterprises (SMEs) and its benefits to them has been little studied in emerging countries. Therefore, the main objectives of the study reported were to (1) investigate the extent and level of ERM among SMEs in southern Thailand, and (2) test for the influence of ERM on firm performance measured by the balanced scorecard (BSC) of SMEs. Using a mailed questionnaire, a sample of 385 (out of 394) SMEs from southern Thailand were analyzed. Descriptive analysis, a correlation matrix, and multiple regression were used to analyze the data obtained. From the results, the most common element of ERM employed was information and communication followed by control activities, monitoring, risk response, internal environment, event identification, objective setting, and risk assessment. Moreover, objective setting, risk assessment, control activities, and monitoring were found to significantly and positively influence SMEs' performance measured by BSC while event identification had a negative influence on SMEs' performance. The study demonstrates that SMEs in developing countries can benefit from the adoption of ERM in the same way as large firms in developed countries.

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“…If applied correctly, risk management maximises favourable outcomes, minimises the effects of connected and unexpected risks, clarifies the causal relationships among risk events, amplifies survivability and competitiveness, and optimises business resource usage (O'Gorman, 2001;Watson, 2009;Knight, 2012;Diedericks, 2015;COSO, 2016;Hopkin, 2018). Through risk management strategies, business resources are spent more efficiently, creating a surplus of resources to be used elsewhere in the business (Smit & Watkins, 2012;Gwangwava et al, 2014). By ensuring compliance with legal and regulatory standards, the business's robustness is further enhanced, and performance variability is decreased, leading to more stable growth and operations (COSO, 2016).…”

Section: Literature Reviewmentioning

confidence: 99%

Implications of the Internet-of-Things on the components of business models of mining companies

Eresia-Eke

Müller

2021

Journal of Contemporary Management

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Background: When observing Small Medium Enterprises (SMEs), key relationships present themselves between SME owners' demographics and their likelihood to apply Risk Management (RM) within their businesses. These relationships were the focus of this study. Purpose of study:The study aimed to explore those relationships through correlation analysis of the demographics and the various risk management components representing small businesses and risk management activities. This was done to answer the research question: How do SMEs' demographics affect their risk management in practice. Design/Methodology/Approach: To gather primary data the study applied a quantitative survey using 332 SMEs, within the Sedibeng District Municipal Area (SDMA). An exploratory factor analysis was used to establish the relevant risk management components used by the sample. The factors generated were then analysed statistically and the correlative relationships between the factors and SME demographics were analysed. Results/Findings: What was found is that an implicit degree of progression towards risk management practices is in progress. Moreover, the identified risk management processes have strong intercorrelations showing that the risk management components that SMEs identified are being applied in their businesses cumulatively across the sample. Another notable finding was that the relationship between risk appetite and availability of liquidity is profound. Liquidity frames the considerations of SMEs firmly and may serve as a theoretical point from which to model their decision-making behaviours. Finally, it was found that although some risk management practices were in place, they are applied differently in practice than in theory, and SMEs have limited awareness of the risks they are exposed to. Recommendations: It is first recommended that the findings of this study be used to construct a theoretical starting point for risk management development interventions at an SME level. Secondly, it is recommended that the role of liquidity regarding risk-taking be explored in terms of behavioural finance to determine if there are subconscious biases that result in inappropriate risk-taking behaviours. Managerial implication: In using the understanding of how risk manifests in SMEs, managers can develop meaningful interventions that empower SMEs to bring risks in line with their ability to manage them. A positive secondary effect is the improvement of resource utilisation and solvency support. Future implications from such actions could refine how risks manifest in small businesses, identify which risks are the primary risks to focus on at their various stages, and explain how best to approach and manage them.

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A literature review of small and medium enterprises (SME) risk management practices in South Africa

Cited by 56 publications

References 24 publications

Enterprise Risk Management and the Survival of Small Scale Businesses in Nigeria

Enterprise Risk Management and the Survival of Small Scale Businesses in Nigeria

The Influence of Enterprise Risk Management on Firm Performance Measured by the Balanced Scorecard: Evidence from SMEs in Southern Thailand

Implications of the Internet-of-Things on the components of business models of mining companies

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