Small and medium enterprise approach to risk management in the Kumasi metropolis

This study investigated risk management processes in Small and Medium Enterprises (SMEs) within the informal service sector. It aimed to understand how these SMEs identify, analyze, and handle risks. The research employed a descriptive field survey design with quantitative research methods. A structured questionnaire was administered to 386 participants, and 210 completed responses were analyzed using mean score ranking and standard deviation. Data processing was conducted using IBM Statistical Product and Service Solution (SPSS) version 21 and Smart PLS for further analysis. The study focused on the Kumasi Metropolis and utilized structural equation modeling (SEM) to examine risk management. Inferential statistics helped determine the domains associated with risk identification and analysis. Various techniques, including benchmarking, interviews, brainstorming, workshops, and questionnaires, were commonly used for risk identification. Qualitative risk analysis was found to be crucial in service-oriented SMEs. The research also explored the mediating effect of risk analysis and risk response and the moderating effect of experience. Construct reliability and validity were high for experience, risk analysis, risk identification, and risk response. Risk analysis was identified as a full mediator between risk identification and risk response, but experience did not moderate risk analysis. This study emphasized the significance of risk identification in risk management. It recommended that organizational managers explore various techniques and options for effective risk identification. Overall, the research provided valuable insights into the risk management practices of SMEs in the informal service sector, offering guidance for improving risk identification and analysis processes.