The main purpose of this study is twofold: first, to analyze how risk is considered and managed by entrepreneurial SMEs, where the original founder is still the entrepreneur running the business, and second to understand if risk management is integrated with decision making.
This research is based on a multiple case study. Three entrepreneurial SMEs based in the North-West of Italy were selected to obtain a heterogeneous sample. They operate in the manufacturing sector and they have different size and corporate ownership.
The risk management process cannot be always formalized but an unconscious risk analysis is always carried out. Risk is intertwined with decision and entrepreneurial orientation. Nowadays, rethinking risk management means enhancing and improving the decision-making process and integrating the phases of the two processes by introducing an alternative new model (RM-DM) that stands for “risk management-decision making”.
Conclusions can be generalized at a theoretical level even though this multiple case study represents a contingent analysis.
This research enhances the understanding of the potential benefits for entrepreneurial SME owners of a risk mind-set while making decisions. RM-DM model is an alternative tool to manage risks properly in SMEs, especially when a formalized process is not implemented, as it improves the way decisions are made and introduces a more reasoned approach to manage risks.
This empirical study introduces a unique model (RM-DM) that helps to rethink risk management in entrepreneurial SMEs, by integrating it with the decision making and by proposing an alternative tool to manage risks with a more structured approach.
We are grateful to the reviewers for their valuable comments that helped to improve our work. This study belongs to a research project entitled “When Risk becomes a chance: risk management as part of the decision-making process in SMEs”. In March 2017 Dr Crovini obtained a research grant after a public competition for young researchers at national level funded by the Italian Accounting Association SIDREA (Società Italiana dei Docenti di Ragioneria e Economia Aziendale).
Crovini, C., Santoro, G. and Ossola, G. (2021), "Rethinking risk management in entrepreneurial SMEs: towards the integration with the decision-making process", Management Decision, Vol. 59 No. 5, pp. 1085-1113. https://doi.org/10.1108/MD-10-2019-1402
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