Typology of risk management practices: an empirical investigation into German SMEs

Thomas Henschel

International Journal of Entrepreneurship and Small Business, 2010, vol. 9, issue 3, 264-294

Abstract: The business management literature has largely neglected the theme of risk management for Small- to Medium-sized Enterprises (SMEs). So the aim of this research was to explore the current state of risk management in German SMEs. Derived from a comprehensive analysis of a questionnaire survey which was supported by research interviews, a multidimensional scoring approach to assess a firm's risk management sophistication has been developed. The present approach does not evaluate one single scoring figure, as is usual. Instead, it allows a differentiated assessment by evaluating separate scoring figures for each aspect that a holistic risk management system should cover. Based on the scoring approach, this paper introduces a new typology of risk management practices. Making the Miles and Snow organisational typology applicable to assess risk management practices, three types – reactor, defender/prospector and analyser – reflecting the levels of sophistication, are extracted. Each of the three risk management types is described by its determinants with respect to the components of a holistic risk management. Then recommendations are formulated on which actions a firm of the respective type should take to improve its risk management.

Keywords: holistic risk management; project management; business planning; performance measurement; small and medium-sized enterprises; SMEs; Germany; multidimensional scoring; organisational typologies; Raymond E. Miles; Charles C. Snow; reactors; defenders; prospectors; analysers; entrepreneurship; entrepreneurs. (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (6)

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