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

Authors: Thomas Henschel

Addresses: School of Accounting, Economics & Statistics, Edinburgh Napier University, UK

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.

DOI: 10.1504/IJESB.2010.031922

International Journal of Entrepreneurship and Small Business, 2010 Vol.9 No.3, pp.264 - 294

Published online: 03 Mar 2010 *

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