Risk management in the segment of SMEs in V4 countries

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F70883521%3A28120%2F19%3A63523156" target="_blank" >RIV/70883521:28120/19:63523156 - isvavai.cz</a>

Result on the web

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DOI - Digital Object Identifier

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Result language

angličtina

Original language name

Risk management in the segment of SMEs in V4 countries

Original language description

Small and medium-sized enterprises (SMEs) have a great importance for the economy worldwide because they represent the competitive and dynamic part of the economic system. European SMEs have increased their importance over the past few years and they are set to continue to grow in the near future. In 2018, the whole segment of SMEs represented 99.8% of all companies in the Czech Republic, 99.9% in Slovakia, 99.8% in Poland, 99.8% in Hungary and 99.8% in all countries of European Union. Enterprises are affected by several risks. Risk is an integral part of entrepreneurship and in case of SMEs, it can be a crucial factor of business success. Business risk can be defined as the possibility (uncertainty) that the actual results of business will deviate from the expected results. There are different types of business risks distinguished by various authors. This publication divided business risks into the groups as follows: market risk, economic risk, financial risk, operational risk, personnel risk, security risk, legal risk and other business risks. The importance of business risks in the Czech Republic, Slovakia and Poland is similar. The importance is given to the market risk, economic risk and personnel risk. In Hungary, all risks are of a similar importance. The sources of risks are perceived differently in terms of social factors (gender, age and education of the entrepreneur) and characteristics of the company (size and length of business). Some risks are perceived more intensively by women then by men (market risk, economic risk, financial risk). Other business risks are perceived more intensively by men than by women. More educated people perceive risks and their sources more seriously and look for a method in order to reduce them. Enterprise risk management (ERM) is considered to be more important after the financial crisis of the early 21st century. It covers some purposeful activities from risk prevention and risk management to limiting the amount of damage that can occur. The activities are as follows: risk identification, risk classification, risk analysis and risk assessment, choosing an appropriate method to reduce risk and a review the effectiveness of ERM. An inability of business owners to adopt the processes of risk management leads to a decreasing sustainability of SMEs. Nevertheless, SMEs do not have a specialist for a risk management and risks are most often managed by the owner. Micro companies generally underestimate the application of the risk management processes. What is more, they do not provide the training for employees in the risk management area. The approach to the business risks management depends on individual characteristics of the SME owners and SME ownership structure. The decision on how to handle risks very often depends on gender, age and education of the entrepreneur. Two groups of methods for risk reduction can be defined as quantitative and qualitative methods. The quantitative methods are based on a mathematical calculation of risk from the frequency of a threat and its impact. The qualitative methods are characterized by risks being expressed in a certain extent (for example, they are scored from 1 to 10, or determined verbally - small, medium, large). The qualitative methods are simpler and faster, but more subjective. Surprisingly, in younger enterprises, the quantitative methods are used more often than in the older ones. It was proven that women apply mathematical and statistical methods in the process of risk management more often than men. It can be concluded that there are differences in many areas of risk identification and risk management among the countries of V4 Group.

Czech name

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Czech description

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Type

B - Specialist book

CEP classification

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OECD FORD branch

50204 - Business and management

Project

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Continuities

V - Vyzkumna aktivita podporovana z jinych verejnych zdroju

Publication year

2019

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

ISBN

978-80-7454-859-8

Number of pages

150

Publisher name

Akademia centrum UTB

Place of publication

Zlín

UT code for WoS book

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