Analysing the Risk Management Perception of Small, Micro and Medium Enterprises
South African small, micro and medium enterprises (SMMEs) display a rather poor performance despite their importance in developing economies. The global Coronavirus (Covid-19) pandemic and recession in South Africa have proved the need for comprehensive risk management perception and sound risk management practices in SMMEs. This paper aims to analyse the risk management perception of SMMEs in the Sedibeng District area to identify the possible reasons for their failure. Additionally, the study aims to provide SMMEs in the Sedibeng District with a more pronounced perception of risk management through a thorough explanation of risk management theories and the importance of risk management as a whole. The results indicated that in the Sedibeng District, SMMEs do not employ adequate risk management practices and do not follow the risk management process correctly. It was also found that SMME owners and risk managers do not proactively identify risks early enough, which might pose significant pressure on risk management processes later on. The theoretical relationship that should exist between risk identification and risk management was very weak and can lead to SMMEs that are vulnerable and more susceptible to failure. The lack of this relationship proves that SMME managers d/o not have a sound risk management perception that will lead to poor risk identification and management thereof. This is detrimental not only to the survival and growth of SMMEs, but also to the South African economy as a whole.
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