Henschel, Thomas (2010) Typology of risk management practices: an empirical investigation into German SMEs. Int. J. Entrepreneurship and Small Business, 9 (3). pp. 264-294.

Abstract/Description

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.

Actions (login required)