Risk Management Practices and SMEs: An empirical study on Turkish SMEs

Zoghi, Farzaneh Soleimani

doi:10.18178/ijtef.2017.8.2.550

Cited by 16 publications

(17 citation statements)

References 12 publications

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“…Many SMEs do not apply risk management practices, mostly because they cannot afford to rededicate resources due to their constraints (Marcelino-Sádaba et al 2014). This is confirmed by the research carried out by Zoghi (2017) among Turkish SMEs where, on average, half of them do not have formal procedures for risk management. This implies that the owners of small enterprises do not devote enough time to develop and implement risk strategies in their companies and more often show an informal approach to risk management (Mudiyanselage and Jayathilake 2012), whereas the practice of risk management indicates numerous benefits including better use of resources, greater predictability of operations, an increase in the quality of products and services, or reduction in waste.…”

Section: Discussion On the Resultsmentioning

confidence: 88%

Parametric Conditions of High Financial Risk in the SME Sector

Ślusarczyk

Grondys

2019

Risks

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The sector of SME is the major force for the national economic and social development. Financial risk is one of the key threats to the activity of small and medium enterprises. The most common manifestation of the financial risk of SMEs is difficulty in financing the business and lack of funds for development. Banks are unwilling to grant loans to such companies. Moreover, it is the rising operating costs that cause shrinking profits, which may result in corporate debt, difficulty in debt repayment, and consequently, high financial risk of these entities. Numerous differences in conducting the activity of small and large enterprises intensify this risk and mean that the model of credit financing for companies is not adjusted to the capabilities and principles of the operation of small enterprises. Therefore, risk management is one of the most important internal processes in small and medium enterprises. The identification of factors that affect the level of financial risk in these entities is therefore crucial. The main objective of this research was to analyze the impact of selected parametric characteristics of the SME sector on the intensity of financial risk they take. This objective was accomplished on the basis of the survey with the participation of Polish SMEs. In order to test the adopted research assumptions, the linear regression model was used with four continuous variables for each type of the identified financial risk. Based on the final research results, the logit model was obtained for the risk of insufficient profits. It was indicated that both the internationalization of the company and the ability to manage risk are the only factors that affect a high level of risk of low income. The article ends with the discussion and the comparison with some previous research in this area.

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Section: Discussion On the Resultsmentioning

confidence: 88%

Parametric Conditions of High Financial Risk in the SME Sector

Ślusarczyk

Grondys

2019

Risks

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“…Understanding of risk management plays a vital role in influencing SMEs' capabilities in managing uncertainties (Crovini, 2017), and disturbances to their operations (Verbano & Venturini, 2013). However, the SME owners/managers, who are the key actors in the risk management process (Zoghi, 2017;Belinskaja & Velickiene, 2015), have little understanding on risk management (Agrawal, 2016). In this regard, owners/managers and their employees need to acquire the risk management knowledge in order to manage the multiple aspects of their businesses (Lukianchuk, 2015;Falkner & Hiebl, 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

“…SMEs have been facing financial, operational, and strategic risks (Zoghi, 2017). Risk management techniques, depending on the form of risks, should be adopted by SMEs in order to manage these risks.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Additionally, their involvement in risk management tasks is very infrequent. They mainly develop risk management techniques based on experience, and brainstorming (Zoghi, 2017). Some do manage risks through an emergency plan (Falkner & Hiebl, 2015).…”

Section: Literature Reviewmentioning

confidence: 99%

“…This plan informs the SME capabilities in managing risks, and can be used by lenders or investors in assessing the future performance of SMEs (Lukianchuk, 2015). However, most of their risk management processes are not documented (Zoghi, 2017).…”

Section: Literature Reviewmentioning

confidence: 99%

See 2 more Smart Citations

Risk-Taking and Performance of Small and Medium-Sized Enterprises: Lessons from Tanzanian Bakeries

Jeje¹

2020

JEBS

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SMEs are the major drivers of socioeconomic development of many economies. In order to influence economic growth, SMEs must be capable of enhancing their competiveness, growth, and sustainability. These capabilities are acquired by SMEs that understand and adopt entrepreneurial strategies that work. There is abundant literature confirming that one of these entrepreneurial strategies include risk-taking practices. SMEs are still facing challenges to understand and apply the right risk-taking strategies that influence their performance. We therefore characterise risk-taking as risk planning, risk controlling, and strategic risk initiatives, and seek to establish their contribution on SME performance. This study draws lessons from the risk management practices of small and medium-sized bakeries in Tanzania where agriculture, a sector that directly relates with bakery business, is one of the leading sectors in driving economic growth. We adopt a multi-stage sampling technique and receive responses from 161 questionnaires, and 20 in depth interviews from bakery owners/managers throughout Tanzania. The principal component analysis, qualitative content analysis (manifest analysis), and the moderator analysis are used in analyzing these data. We ascertain that both the firm age, and the gender, of the owner/manager moderate the relationship between risk-taking strategies and SME performance. We argue that SMEs have the responsibilities of improving their risk-taking practices and capabilities in order to drive their competitiveness. Additionally, SMEs need to employ their efforts and resources in supporting their risk management initiatives, and integrate them in their business operations, and policy development practices, and ultimately advance their sustainability.

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Project risk management adaptation of infrastructures in the Greek context

Demertzis

Vatalis

2021

IOP Conf. Ser.: Earth Environ. Sci.

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Last years in Greece there has been an increase in the number of “Small and Medium Enterprises, SMEs” active in the construction of infrastructures and specifically in the telecommunications sector. The research methodology was done with an appropriate questionnaire which is addressed mainly to construction companies. Large companies, for both operational and financial reasons, prefer to outsource projects and services related to their network infrastructure to third companies rather than using their own resources. SMEs undertake to implement many of these services. They are more flexible in terms of operation but also adapt faster to the requirements of the projects they undertake. However, unlike large companies, they lack in procedures and have limited administrative resources. This makes them more vulnerable to the risks presented in the various phases of the projects they undertake. Risk Management, as a process, includes the identification of risks, the prediction of the probability of occurrence and its consequences and finally proposes solutions to treat them. The research investigates the current situation regarding risk management by Greek SMEs. The results showed up that although the use of relevant risk management procedures is limited, the participants believe to the usefulness of the process according to international standards for the projects that SMEs implement.

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Risk Management Practices and SMEs: An empirical study on Turkish SMEs

Abstract: Index Terms-Risk, risk management (RM) process, SMEs (small to medium-sized enterprises).

Cited by 16 publications

References 12 publications

Parametric Conditions of High Financial Risk in the SME Sector

Parametric Conditions of High Financial Risk in the SME Sector

Risk-Taking and Performance of Small and Medium-Sized Enterprises: Lessons from Tanzanian Bakeries

Project risk management adaptation of infrastructures in the Greek context

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