The attitudes and approaches to risk management among Gozitan SMEs within the construction and financial services sectors

Abstract

Small and Medium Enterprises (SMEs) form a substantial portion of the Maltese economy. Such enterprises are typically family businesses. While SME business operators may be thorough in managing their business, one may be concerned about the risks present in such undertakings. Research on risk management within the context of SMEs is limited, especially in the Maltese context. This research aims to assess SMEs of the like, on their knowledge of risks present to their enterprise or industry. Due to time constraints, this study will be focusing on SMEs operating the Construction and Financial Services sector in the Gozitan economy; two sectors which contribute substantially to the Gozitan economy as a whole. This study shall therefore attempt to gain an understanding of the SME ‘risk universe’ by analysing the different risks which affect SMEs. Further research aims to analyse the effectiveness of practices in place, if any, to mitigate risks present. Are SMEs too risk averse when it comes to decision making? Or do such entities take decisions regardless of risks involved? This will enable the researcher to understand how risk management is currently implemented by SMEs pertaining to these sectors. Thorough research should provide further insight on how SMEs manage their risk and possibly lead to formalized knowledge on the managing of risks in such environments. Finally, this study aims to understand the attitudes and associated risks which mould the business culture with respect to risk and risk management within the Construction and Financial Services sectors in the Gozitan economy. SMEs which make use of risk management practices should be able to better manage their limited resources to achieve the best possible returns on their investments.