Determining the influence of personal entrepreneurial competencies on enterprise risk management in the Bhutanese SMEs

Abstract

The purpose of this research was to empirically investigate the existence of Enterprise Risk Management and to determine the influence of Personal Entrepreneurial Competencies on the Enterprise Risk Management of the Small-medium Enterprises (SMEs). To achieve the objectives of the study, empirical data is collected from 300 production and manufacturing SME owners and managers from the economic region of Bhutan using closed-ended structured questionnaire. The Structural Equation Modelling was employed as the main technique for data analysis to test the proposed model and hypothesis. The findings revealed the relationship between Personal Entrepreneurial Competencies and Enterprise Risk Management to be statistically significant. Furthermore, the study found that the SME owner/managers demonstrated to be in the “Strong” category on four Personal Entrepreneurial Competencies items and in “Moderate” category for the remaining six items, which are vital to understand in a developing nation. The novel contribution of this research focuses on integrating Enterprise Risk Management and strategic planning processes to gain a better understanding of the enterprise’s key risks and opportunities that are relevant to strategic objectives, as well as defining the leadership team’s responsibilities to establish clear risk oversight and accountability.