How SMEs in a non-Western context navigate risk? Insights from Schatzki’s perspective

Purpose This study aims to explore how the components of risk: human vs. non-human have shaped SMEs risk management in a Muslim country such as Saudi Arabia as informed by Schatzki’s perspective on practice theory as flat ontology. Design/methodology/approach The methodology of this study based on Adams’ (2017) deductive-inductive data coding and interpretative approach to operationalize Schatzki’s (2005) key principles of practical understanding, rules, teleoaffective structures and general understanding to examine the risk management practices in SMEs in Saudi Arabia. A total of 10 semistructured interviews were conducted. This synthesized methodological approach is essential in bridging the gap in Schatzki’s (2005) practice theory for non-Western sites and introduces a hidden practiced concept often employed by SMEs in risk management in those sites, such as the deontological concept of tawakkul (reliance upon Allah). We argue that this concept is pivotal component contributing to the underpinning theory of Schatzki’s (2005) practice theory. Findings The findings indicate that tawakkul (reliance upon Allah) is significantly embedded into the risk-management practices by the owners of SMEs in Saudi Arabia as a means to mitigate risks for such small enterprises. This value infuses a significant sense of individual agency into the owners’ daily business practices. The results further suggest that despite the existence of extensive risk-management processes in SMEs (i.e. the teleoaffective structures and rules that enable, constrain and orient human-centered risk-management activities), in reality, risk-management practices in such firms are largely shaped by tawakkul and by the SME owners’ general and practical understanding of the current and forecasted future business conditions, hence bridging the gap in Schatzki’s (2005) practice theory for non-Western sites. Originality/value The findings provide a novel contribution to the existing literature on the risk-management practices of SMEs in Muslim countries. Specifically, it elucidates that the risk-management practices of these SME owners appear to be determined by their general understanding and practical understanding of the current (and likely future) business conditions. This study paves the way for future researchers to apply Schatzki’s (2005) practice theory to better understand organizational behavior, like risk management, in previously unresearched settings.