A systemic risk management model for SMEs under financial crisis

Abstract

PurposeThe “business‐risk” relationship across countries does not fit exactly into a “model” nor does it have a pure palliative effect. Following this idea, the purpose of this research is to reinforce a comparative study on small to medium‐sized enterprises (SMEs) handling both risk and crisis management according to a new tailored model of a balance scorecard (BS). This new model of risk and crisis management aims at improving both SMEs' management adaptation and performance across all of crisis' stages, something not attempted so far in the literature.Design/methodology/approachThe application of such a BS comes from the author's experience as a banker financing various SMEs industries, as a bank consultant on risk management, yet primarily from the results of a survey performed on a set of Romanian and Cypriot SMEs, equal‐proportionally selected from the area of trading, manufacturing, and services. The data regard the period 12/2008‐06/2011 as representative for the latest global financial crisis affecting the entire European Union region, too.FindingsCoincidently or not, this study's results show a significant improvement of the financial performance of the SMEs who employed this model compared to those who did not.Originality/valueThis model's simplicity appeals to managers and regulators in understanding important business risks and crisis related phenomena. Backed by this idea, this research underpins a comparative study on SMEs handling risk and crisis management according to a new tailored model of a BS.

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“…(Mihai Yiannaki, 2012). (3) Capital management BOC needs to accord the medium and long-term capital planning requirements of the group to strengthen internal capital management and optimize the assets structure, in order to further compact the capital base.…”

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“…furniture industry (Li et al 2011), textile (Abbas et al 2012), banking sector (Romanova 2012;Lakštutienė et al 2011), agriculture (Li et al 2011), TFT-LCD panel industry (Hon, Chu 2011), automobile industry (Du 2009;Bok 2009), tourism (Baleanu et al 2009), construction (Al-Malkawi 2013). Other scientists perform research on the economic crisis effect on small and medium enterprises (Yiannaki 2012;Soininen et al 2012) or large publicly listed companies (Dzikowska, Jankowska 2012;Norvaišienė 2012;Hsu 2013).…”

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“…In figure 2, yearly distribution of those articles are shown. (Chen, 2008;Garcia-Valderrama et al, 2008;GarciaValderrama et al, 2009;Bigliardi and Dormio, 2010;Wang et al, 2010;Ghazinoory and Soofi, 2012;Khota and Pretorius, 2012;Jarrar and Smith, 2014;Rylková and Bernatík, 2014;Zizlavsky, 2014) Information Systems and Knowledge Management (Bhargava et al, 2007;Harlow, 2008;Amberg and Lang, 2009;Asosheh et al, 2010;Han, 2011;Lopez-Nicolas and Merono-Cerdan, 2011;Wu and Chang, 2012;Loukis and Charalabidis, 2013;Wu and Chen, 2014) Finance & Management Accounting (Rom and Rohde, 2007;Zhao, 2007;Granlund, 2011;Belfo and Trigo, 2013;Chenhall and Moers, 2015;Yiannaki, 2015 (Huang et al, 2011;Karabulut, 2015;Noori, 2015) Corporate Social Responsibility & Sustainability Leon-Soriano et al, 2010;Wang, 2013;Álvarez, 2015) Method Specific (ANN, AHP) (Savetpanuvong and Tanlamai, 2008;Quezada and LopezOspina, 2014) © 2017 AESS Publications. All Rights Reserved.…”

“…Another finance related approach is introduced by Yiannaki (2015). The author is developed a study on small and medium-sized enterprises to compare their handling of both risk and crisis management.…”