Risk Management of Small and Medium Enterprises: A Case Study of the Service Sector in Bangkok and Metropolitan Areas to Achieve Organizational Sustainability

Abstract

Small and Medium Enterprises (SMEs) play a crucial role in the Thai economy but face significant challenges and risks from both external and internal factors. This research aims to study the relationship between the opportunity and severity of business risks in SMEs and the effectiveness of risk management. Additionally, it aims to present guidelines for developing effective risk management for SMEs to ensure organizational sustainability. A purposive sampling method was used to select 367 entrepreneurs from SMEs in the service sector. The inferential statistics used in data analysis were Path Analysis and Structural Equation Modeling.

The research findings indicate that the model showing the relationship between the opportunities and severity of business risks in SMEs with risk management and the effectiveness of risk management, using path analysis, reveals overall statistically significant results. The values of CFI, GFI, and NFI from the tests were all close to 1, and the p-value was less than 0.05. The study also found that risk management directly influences the effectiveness of risk management, with a correlation value of 0.77.  Key factors influencing risk management were Review and Revision and following by Information Communication and Reporting, Performance Goals, Strategy and Objective Setting respectively. The factor with the least impact on risk management was Governance and Culture.

Keywords: Risk Management;  Small and Medium Enterprises;  Organizational Sustainability