THE CURRENT STATE OF RISK MANAGEMENT IN ITALIAN SMALL AND MEDIUM-SIZED ENTERPRISES

Abstract

Risk management literature mainly refers to large companies. When it focuses on SMEs, risk management seems to be unstructured, reactive and solely in the hands of owner-managers. Further investigation is necessary, especially in Italy where SMEs are the backbone of the country. This research aims to identify the most important risks, SMEs’ risk management organization, process and approach, as well as drivers, obstacles and benefits of a holistic risk management implementation. Ten case studies indicate that Italian SMEs are aware of the benefits of implementing holistic risk management practices, but constraints seem to be stronger than drivers. Companies are particularly concerned with financial risks, IT breakdown and exogenous events. Risk managers are never appointed and risk management processes are usually not formalized. Half of the companies behave fatalistically, others have introduced holistic risk management practices, and few cases show to be even more advanced