The Factors Affecting Effectiveness Of Risk Management Of Small And Medium Enterprises In Thailand

Abstract

The purpose of this research was to look at the factors affecting the quality of risk management used by SMEs in Thailand, and to see how that quality relates to the success of those businesses. The study combined quantitative methods, such as survey responses from 545 SMEs and secondary data from the office of small and medium enterprises promotion's database, with qualitative methods, like in-depth interviews with 30 SMEs using best practice in risk management.  Both sets of findings showed that the quality of risk management was influenced in a positive way by a set of six critical success factors, including size of the entity, investment in risk management information technology, investment in the development of human resources associated with risk management, risk management competency, risk management organizational structure, and risk culture. When compared to the other factors, risk culture consistently produced good findings across all statistical methodologies. Concurrently, findings from quantitative and qualitative studies corroborated a link between SMEs' risk management practices and their success. Thus, in order to improve performance, Thai SME entrepreneurs should improve the quality of risk management conducted by themselves, especially through cultivating a culture of risk management. This enhancement will generate a competitive edge, giving SMEs more capacity to contribute to Thailand's long-term economic growth.