Está en la página 1de 6


Risk Management in a Small & Medium Enterprise


Risk management is a task similar to the other management functions such as

marketing, purchasing or finance. Thus, if we look at economic development from
a functional viewpoint risk management is somewhat every country do which
directs it to the realisation of its overall economic objectives. The scenery of risk
management shall be scrutinized by an argument in the proposal which focuses
on Small and Medium Enterprises.

This research proposal discusses in detail the background, general purpose of the
study. Moreover, the objectives of the study and the research statements are
presented. Here, vital concepts, questions and assumptions are stated. Finally,
the scope and limitation of the study, overview of the methodology used and the
significance of the research are discussed.

Overview of Risk Management

Risk management started out as an indemnity management purpose. The cost of

indemnity had restricted management's alternatives in dealing with the hazards
faced by the organisation. Insurers rated firms according to business & in such a
way that a smooth running firm that had losses were required to pay for the
claims of poorly run firms within the same industry. With this, the role of risk
management appeared. Management began to make out that abridged losses
intended at reducing cost of risk. If risk managers reduce losses they could hold
themselves without resorting to indemnity. However, it took some time for
industries to settle in risk management.
The delicate inquisitiveness in risk management is the result of a number of
instantaneous drifts. Globalisation of trade and production has augmented
financial and direct investment in unstable up-and-coming markets. Risk
management has also ensnared consideration as a result of the recurring and
well-publicised breakdowns linked with its execution. Regardless of the academic
and specialized concentration paid to risk management, common instances still
occur when classy investors or firms experience abrupt, unexpected, and
devastating losses.

To an economist, risk is described as the survival of ambiguity about potential

upshots. Risk is the mean reason in economic existence for the reason that
individuals and firms create immutable reserves in research and product
improvement, inventory, plant and equipment and human capital, without
knowing whether the potential cash flows from these funds will be adequate to
pay off both debt and equity holders or not. If such genuine investments do not
engender their necessary returns, then the financial claims on these returns will
turn down worthless.

In addition to it, rather than altering the equity and debt in the capital
composition, firms/organisations can also influence their chance of liquidation by
extenuating the risk disclosures they countenance. Firms/organisations come out
to prefer between the types and degrees of disclosures, assuming those that they
consider have an aggressive gain in supervision and laying others off into the
capital markets. Other features of the firm's processes such as the convexity of its
tax lists, can also influence the amount to which administrators challenge to
alleviate risks.
Purpose of the Study

This research proposal seeks to examine and weigh the advantages and
disadvantages of risk management in Small and Medium Enterprises. Moreover, a
comparison with organisations risk management practices will be undertaken.
This is necessary to come up with a strong conclusion and the creation of "best of
two worlds" recommendation.

Statement of the Problem

As agents are aware of the many ways in which a generalised 'climate of risk'
presses in on our daily activities; sensitive to the risks that affect our lives; and are
specialists in managing risk. From health concerns to stock market gains and
environmental and political issues, the contemporary risk climate is one of
proliferation, multiplication, specialise, counterfactual guesswork, and anxiety.

However, adequate consideration and calculation of risk-taking, risk-management

and risk-detection can never be fully complete since there are unforeseen and
unintended aspects of risk environments. This is especially true at the level of
global hazards, where the array of industrial, technological, chemical and nuclear
dangers that confront all of us grows, and that too at an alarming rate. The
current situation as that of world is a risky society. The rise of the risky society is
the result of the new electronic global economy.

In addressing the need to mitigate risk and to predict future losses in the
economy, through business organisations, it requires business administrators to
provide adequate risk management. In addition to all this, the proposal will
attempt to answer the following question: (1) What are the differences of Small
and Medium Enterprises in terms of risk management aspects?

The purpose of this study is to conduct a study on the quality of service related to
Small and Medium Enterprises dealing in risks. This study tries to answer the
following queries:

1. What are the variables that significantly affect the perception of the consumers
regarding satisfaction?
2. Does appropriateness of risk management in Small and Medium Enterprises
significantly affects the progress of certain organisations?
3. Does consumer satisfaction contribute to the progress of Small and Medium
4. Is there any significant relationship between risk management and
organisation's progress of Small and Medium Enterprises?

Hypothesis of the Study

Based on the research questions the research proposal works out on the
following null hypotheses:
1. Appropriateness of marketing strategy and risk management has no significant
effect to the progress of Small and Medium Enterprises in.
2. Consumer's perception regarding marketing strategies has no significant
relationship to the progress of Small and Medium Enterprises.

Significance of the Study

This study will be a significant endeavour in understanding the importance of

assessing risk management in a certain organisation. This study will be helpful to
business administrators and management practitioners when they apply effective
marketing approach in their organisation. By examining the risks and other factors
involved in marketing strategies, business administrators and management
practitioners will be able to design measures to minimise the risk. Further,
understanding the needs of their consumers in terms of satisfaction, this study
will help different food manufacturers to satisfy their consumers. Moreover, this
study will be significant in promoting effective marketing strategies that suffice
the needs of consumers.

This study is deemed useful for future references on marketing strategies and its
application to different business organisations. This study could also serve as an
academic tool in informing its reader about the business development and
organisational change. Moreover, this research will provide recommendations on
how to value business development as they are important in any organisation for
its success. In addition, this study will provide information to business leaders
regarding business progress and development.

I have applied a descriptive research method. The research described in this
document is based on qualitative research methods. The qualitative research is
multi-method in focus, involving an interpretative, naturalistic approach to its
subject matter. For this research design, the researcher will gather data, collate
published studies from different local and foreign universities and articles from
books and journals; and makes a content analysis of the collected documentary
and verbal material. Afterwards, the researcher will summarise all the

From this proposal, the research paper will have five chapters. The First Chapter
will present the background of the study, the objectives, research problems,
methodology, the study's scope and limitation and its significance. In Chapter 2,
literatures pertaining to marketing strategies, risk management, management
programs and consumer satisfaction will be discussed. In Chapter 3, the
methodology used for this study is discussed. In Chapter 4, the results of the
conducted survey and interview will be present. And in Chapter 5, the study
summarises the findings and provides conclusion and recommendations.

This research study has a broad range of topics regarding status of risk
management programs in Small and Medium Enterprises with respect to the
perception of consumers. Although the focus is on the perception of the
respondents, other considerations such as the needs of the respondents, effect of
management programs on consumers, and other general information about
business development are discussed. The outcome of this study is limited only to
the data gathered from books and journals about marketing strategies and
business development. The primary data gathered will be from the result of the
questionnaire survey and interview conducted by the researcher.