E-Book Overview
This book offers a fresh method of assessing and managing risks in SMEs, by adopting a multidisciplinary approach. In small and medium companies, the risk management process cannot be often formalised and procedures are usually integrated unconsciously into the decision-making process. Therefore, to enhance the flexibility of these companies, increase their market share and allow them to grow and manage risks more effectively, the first step is to improve the way decisions are made. Consequently, it is fundamental for those companies to improve the awareness about the way reasonable decisions are made, which can be achieved only through a proper knowledge and the definition of the Risk Appetite Framework. Therefore, by improving knowledge, the risk appetite and awareness in the decision making, companies will implicitly start developing a risk consciousness, which can be translated into a sound risk approach. SMEs need to understand the importance of an effective internal control system. Hence, the central point is the necessity to start reconsidering the company as a unique entity, by adopting a holistic approach. The book explores whether small and medium companies should adopt a formalised risk management process and, more importantly, the role that the development of an appropriate risk mindfulness and approach to expand existing functions plays in these entities. It suggests an appropriate way of thinking about risk, starting with the amalgamation of both past and present theories, and enabling SMEs to find a solution to improve the effectiveness of their risk management strategies.
E-Book Content
Risk Management in Small and Medium Enterprises
Chiara Crovini
Risk Management in Small and Medium Enterprises
G. Giappichelli Editore
First published 2019 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business and by G. Giappichelli Editore Via Po 21, Torino – Italia © 2019 Chiara Crovini The right of Chiara Crovini to be identified as author of this work has been asserted by them in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data A catalogue record for this book has been requested
ISBN: 978-0-367-22679-4 (hbk-Routledge) ISBN: 978-0-429-27631-6 (ebk-Routledge)
Typeset in Simoncini Garamond by G. Giappichelli Editore, Turin, Italy
The manuscript has been subjected to the double blind peer review process prior to publication.
To Mum and Dad, for always supporting me
CONTENTS page List of figures and tables
9
Preface
11
Introduction
15
1. Theoretical background
21
1.1. 1.2. 1.3. 1.4.
Definition and characteristics of Small and Medium Enterprises (SMEs) Risk and uncertainty The risk management process: a brief state of the art The decision-making process within the business management
2. The management of risks in SMEs 2.1. Types of risks in SMEs 2.1.1. Credit, financial and defaults risks 2.1.2. Supply chain risk 2.1.3. Cyber, IT and