PDF

Published

2024-03-12

Issue

Vol. 9 No. 6 (2024)

Section

Research Articles

License

The journal adopts the Attribution-NonCommercial 4.0 International (CC BY-NC 4.0), which means that anyone can reuse and redistribute the materials for non-commercial purposes as long as you follow the license terms and the original source is properly cited.

Author(s) shall retain the copyright of their work and grant the Journal/Publisher rights for the first publication with the work concurrently licensed since 2023 Vol.8 No.2.

Under this license, author(s) will allow third parties to download, reuse, reprint, modify, distribute and/or copy the content under the condition that the authors are given credit. No permission is required from the authors or the publisher.

This broad license intends to facilitate free access, as well as the unrestricted use of original works of all types. This ensures that the published work is freely and openly available in perpetuity.

By providing open access, the following benefits are brought about:

  • Higher Visibility, Availability and Citations-free and unlimited accessibility of the publication over the internet without any restrictions increases citation of the article.
  • Ease of search-publications are easily searchable in search engines and indexing databases.
  • Rapid Publication – accepted papers are immediately published online.
  • Available for free download immediately after publication at https://esp.as-pub.com/index.php/ESP

 

Copyright Statement

1.The authors certify that the submitted manuscripts are original works, do not infringe the rights of others, are free from academic misconduct and confidentiality issues, and that there are no disputes over the authorship scheme of the collaborative articles. In case of infringement, academic misconduct and confidentiality issues, as well as disputes over the authorship scheme, all responsibilities will be borne by the authors.

2. The author agrees to grant the Editorial Office of Environment and Social Psychology a licence to use the reproduction right, distribution right, information network dissemination right, performance right, translation right, and compilation right of the submitted manuscript, including the work as a whole, as well as the diagrams, tables, abstracts, and any other parts that can be extracted from the work and used in accordance with the characteristics of the journal. The Editorial Board of Environment and Social Psychology has the right to use and sub-licence the above mentioned works for wide dissemination in print, electronic and online versions, and, in accordance with the characteristics of the periodical, for the period of legal protection of the property right of the copyright in the work, and for the territorial scope of the work throughout the world.

3. The authors are entitled to the copyright of their works under the relevant laws of Singapore, provided that they do not exercise their rights in a manner prejudicial to the interests of the Journal.

About Licence

Environment and Social Psychology is an open access journal and all published work is available under the Creative Commons Licence, Authors shall retain copyright of their work and grant the journal/publisher the right of first publication, and their work shall be licensed under the Attribution-NonCommercial 4.0 International (CC BY-NC 4.0).

Under this licence, the author grants permission to third parties to download, reuse, reprint, modify, distribute and/or copy the content with attribution to the author. No permission from the author or publisher is required.

This broad licence is intended to facilitate free access to and unrestricted use of original works of all kinds. This ensures that published works remain free and accessible in perpetuity. Submitted manuscripts, once accepted, are immediately available to the public and permanently accessible free of charge on the journal’s official website (https://esp.as-pub.com/index.php/ESP). Allowing users to read, download, copy, print, search for or link to the full text of the article, or use it for other legal purposes. However, the use of the work must retain the author's signature, be limited to non-commercial purposes, and not be interpretative.

Click to download <Agreement on the Licence for the Use of Copyright on Environmental and Social Psychology>.

How to Cite

Tsagay, T., Rattanawiboonsom, V., & Yawised, K. (2024). Determining the influence of personal entrepreneurial competencies on enterprise risk management in the Bhutanese SMEs. Environment and Social Psychology, 9(6). https://doi.org/10.54517/esp.v9i6.2369

Determining the influence of personal entrepreneurial competencies on enterprise risk management in the Bhutanese SMEs

Tsagay Tsagay

Faculty of Business, Economics and Communications (BEC), Naresuan University

Vichayanan Rattanawiboonsom

Faculty of Business, Economics and Communications (BEC), Naresuan University

Kritcha Yawised

Faculty of Business, Economics and Communications (BEC), Naresuan University


DOI: https://doi.org/10.54517/esp.v9i6.2369


Keywords: enterprise risk management (ERM), personal entrepreneurial competency (PEC), small-medium enterprises (SME), Bhutan, structural equation model (SEM)

Abstract

The purpose of this research was to empirically investigate the existence of Enterprise Risk Management and to determine the influence of Personal Entrepreneurial Competencies on the Enterprise Risk Management of the Smallmedium Enterprises (SMEs). To achieve the objectives of the study, empirical data is collected from 300 production and manufacturing SME owners and managers from the economic region of Bhutan using closed-ended structured questionnaire. The Structural Equation Modelling was employed as the main technique for data analysis to test the proposed model and hypothesis. The findings revealed the relationship between Personal Entrepreneurial Competencies and Enterprise Risk Management to be statistically significant. Furthermore, the study found that the SME owner/managers demonstrated to be in the “Strong” category on four Personal Entrepreneurial Competencies items and in “Moderate” category for the remaining six items, which are vital to understand in a developing nation. The novel contribution of this research focuses on integrating Enterprise Risk Management and strategic planning processes to gain a better understanding of the enterprise’s key risks and opportunities that are relevant to strategic objectives, as well as defining the leadership team’s responsibilities to establish clear risk oversight and accountability.

References

[1]. Lee, H., Kelley, D., Lee, J., & Lee, S. (2012). SME Survival: The Impact of Internationalization, Technology Resources, and Alliances. Journal of Small Business Management, 50(1), 1–19. https://doi.org/10.1111/j.1540-627X.2011.00341.x

[2]. Pathak, S., & Ahmad, M. M. (2018). Role of government in flood disaster recovery for SMEs in Pathumthani province, Thailand. Natural Hazards, 93, 957-966.

[3]. Cottage and Small Industry Policy. (2012). Department of Small and Cottage Industries. https://www.moice.gov.bt/wp-content/uploads/2023/03/Cottage-and-Small-Industry-Policy-2012.pdf

[4]. Pem, D. (2017). PSL guideline launched. The Bhutanese. https://thebhutanese.bt/psl-guideline-launched/

[5]. Dorji, T. (2019, 2019/03/15/). CSIs and CSOs, agents for sustainable graduation. KuenselOnline. http://www.kuenselonline.com/csis-and-csos-agents-for-sustainable-graduation/

[6]. Sweeting, P. (2012). Financial enterprise risk management. Cambridge : Cambridge University Press, 2012, c2011. http://search.ebscohost.com/login.aspx?direct=true&db=cat07210a&AN=nur.355973&site=eds-live&authtype=ip,uid&scope=cite

[7]. Andersen, T. J., & Schrøder, P. W. (2010). Strategic Risk Management Practice: How to Deal Effectively with Major Corporate Exposures. Cambridge University Press. https://books.google.co.th/books?id=xFly_CoerqwC

[8]. Moeller, R. (2007). COSO Enterprise Risk Management. Wiley, Hardcover. https://www.amazon.com/Enterprise-Management-Moeller-Robert-Hardcover/dp/B008CMJGIA/ref=sr_1_6?keywords=coso+enterprise+risk+management&qid=1569155714&s=books&sr=1-6

[9]. Hiebl, M. R. W., Duller, C., & Neubauer, H. (2019). Enterprise risk management in family firms: evidence from Austria and Germany. Journal of Risk Finance, 20(1), 39-58. https://doi.org/10.1108/JRF-01-2018-0003

[10]. Naude, M. J., & Chiweshe, N. (2017). A proposed operational risk management framework for small and medium enterprises. SOUTH AFRICAN JOURNAL OF ECONOMIC AND MANAGEMENT SCIENCES, 20(1). https://doi.org/10.4102/sajems.v20i1.1621

[11]. Pratono, A. H. (2018). Does firm performance increase with risk-taking behavior under information technological turbulence?: Empirical evidence from Indonesian SMEs. The Journal of Risk Finance, 19(4), 361-378. https://doi.org/10.1108/JRF-10-2017-0170

[12]. Falkner, E. M., & Hiebl, M. (2015). Risk management in SMEs: a systematic review of available evidence (Vol. 16).

[13]. Mersha, T., & Sriram, V. (2019). Gender, entrepreneurial characteristics, and success: Evidence from Ethiopia. Thunderbird International Business Review, 61(2), 157-167. https://doi.org/10.1002/tie.21984

[14]. Schermerhorn, J. R. (2011). Introduction to Management. John Wiley & Sons. https://books.google.co.th/books?id=wbAmkdoG4O8C

[15]. Wren, D. A. (2001). Henri Fayol as strategist: a nineteenth century corporate turnaround. Management Decision. https://doi.org/10.1108/EUM0000000005565

[16]. Peaucelle, J.-L., & Guthrie, C. (2012). The private life of Henri Fayol and his motivation to build a management science. Journal of Management History. https://doi.org/10.1108/17511341211258774

[17]. Hart, S. (1995). A Natural-Resource-Based View of the Firm. Academy of Management Review, 20(4), 29.

[18]. Kor, Y. Y., & Mahoney, J. T. (2004). Edith Penrose's (1959) Contributions to the Resource-based View of Strategic Management. Journal of Management Studies, 41(1), 183-191. https://doi.org/10.1111/j.1467-6486.2004.00427.x

[19]. Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5(2), 171-180. https://doi.org/10.1002/smj.4250050207

[20]. Penrose, E. (2009). The Theory of the Growth of the Firm. OUP Oxford. https://books.google.co.th/books?id=85FLx2NQlaoC

[21]. Burvill, S. M., Jones-Evans, D., & Rowlands, H. (2018). Reconceptualising the principles of Penrose’s (1959) theory and the resource based view of the firm: The generation of a new conceptual framework. Journal of Small Business and Enterprise Development, 25(6), 930-959. https://doi.org/10.1108/JSBED-11-2017-0361

[22]. Bird, B. (1995). Toward a theory of entrepreneurial competency. Advances in entrepreneurship, firm emergence and …. https://www.academia.edu/1282975/Toward_a_theory_of_entrepreneurial_competency

[23]. Tehseen, S., Ahmed, F. U., Qureshi, Z. H., Uddin, M. J., & T, R. (2019). Entrepreneurial competencies and SMEs’ growth: the mediating role of network competence. Asia-Pacific Journal of Business Administration, 11(1), 2-29. https://doi.org/10.1108/APJBA-05-2018-0084

[24]. UNCTAD. (2019, 2019). Empretec Inspiring Entrepreneurs. United Nations. https://empretec.unctad.org/

[25]. Behling, G., & Lenzi, F. C. (2019). Entrepreneurial Competencies and Strategic Behavior: a Study of Micro Entrepreneurs in an Emerging Country. Brazilian Business Review (Portuguese Edition), 16(3), 255-272. https://doi.org/10.15728/bbr.2019.16.3.4

[26]. Brustbauer, J. (2016). Enterprise risk management in SMEs: Towards a structural model. International Small Business Journal, 34(1), 70-85. https://doi.org/10.1177/0266242614542853

[27]. Hopkin, P. (2017). Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective Risk Management. Kogan Page Publishers. https://books.google.co.th/books?id=zfvTDQAAQBAJ

[28]. Frame, J. D. (2003). Managing Risk in Organizations: A Guide for Managers: 1st (First) Edition. Wiley, John & Sons, Incorporated. https://www.amazon.com/Managing-Risk-Organizations-Guide-Managers/dp/B0086HR3M2/ref=sr_1_4?keywords=managing+risk+in+organizations+a+guide+for+managers&qid=1569155582&s=books&sr=1-4

[29]. Karunaratne, K. (2017). The Impact of Enterprise Risk Management on Firm Performance: Evidence from Sri Lankan Banking and Finance Industry. International Journal of Business and Management, 13, 225. https://doi.org/10.5539/ijbm.v13n1p225

[30]. Hopkin, P. (2010). Fundamentals of risk management: understanding, evaluating, and implementing effective risk management. Kogan Page.

[31]. Renault, B., Agumba, J., & Ansary, N. (2018). An exploratory factor analysis of risk management practices: A study among small and medium contractors in Gauteng. Acta Structilia, 25(1), 1-39. https://doi.org/10.18820/24150487/as25i1.1

[32]. Bruton, G. D., Su, Z., & Filatotchev, I. (2018). New Venture Performance in Transition Economies from Different Institutional Perspectives. Journal of Small Business Management, 56(3), 374-391. https://doi.org/10.1111/jsbm.12266

[33]. De Clercq, D., Thongpapanl, N., & Dimov, D. (2014). Contextual ambidexterity in SMEs: the roles of internal and external rivalry. Small Business Economics, 42(1), 191-205. https://doi.org/10.1007/s11187-013-9471-2

[34]. Das, S. S., & Das, A. (2014). India shining? A two-wave study of business constraints upon micro and small manufacturing firms in India. International Small Business Journal, 32(2), 180-203. https://doi.org/10.1177/0266242613488790

[35]. Gao, S. S., Sung, M. C., & Zhang, J. (2013). Risk management capability building in SMEs: A social capital perspective. International Small Business Journal, 31(6), 677-700. https://doi.org/10.1177/0266242611431094

[36]. Maliranta, M., & Nurmi, S. (2019). Business owners, employees, and firm performance. Small Business Economics, 52(1), 111-129. https://doi.org/10.1007/s11187-018-0029-1

[37]. Yiannaki, S. M. (2012). A systemic risk management model for SMEs under financial crisis. International Journal of Organizational Analysis, 20(4), 406-422. https://doi.org/10.1108/19348831211268607

[38]. Vaughan, E. J. (1996). Risk Management (1 edition ed.). Wiley. https://www.amazon.com/Risk-Management-Emmett-J-Vaughan/dp/047110759X

[39]. Sánchez, J. (2012). The influence of entrepreneurial competencies on small firm performance. Influencia de las competencias emprendedoras en el rendimiento de la pequeña empresa., 44(2), 165-177. http://search.ebscohost.com/login.aspx?direct=true&db=asn&AN=80215492&site=eds-live&authtype=ip,uid

[40]. Andika, S. P., & Puspita, S. W. (2018). The Model of Firm Performance Improvement through Entrepreneurial Competence. Holistica, 9(3), 55-70. https://doi.org/10.2478/hjbpa-2018-0023

[41]. Lopa, N. Z., & Bose, T. K. (2014). Relationship between Entrepreneurial Competencies of SME Owners/Managers and Firm Performance: A Study on Manufacturing SMEs in Khulna City. Journal of Entrepreneurship and Management; New Delhi, 3(3), n/a. http://search.proquest.com/docview/1733224541/abstract/870CDA8DF2A04F10PQ/1

[42]. Ng, H. S., & Kee, D. M. H. (2018). The core competence of successful owner-managed SMEs. Management Decision; London, 56(1), 252-272. https://doi.org/http://dx.doi.org.libproxy.murdoch.edu.au/10.1108/MD-12-2016-0877

[43]. Johnsen, G. J. (2005). Owner-manager Gender, Financial Performance and Business Growth amongst SMEs from Australia's Business Longitudinal Survey. International Small Business Journal, 23(2), 115-142. https://doi.org/10.1177/0266242605050509

[44]. Wolf, P., Kaudela-Baum, S., & Meissner, J. O. (2012). Exploring innovating cultures in small and medium-sized enterprises: Findings from Central Switzerland. International Small Business Journal, 30(3), 242–274. https://doi.org/10.1177/0266242610386666

[45]. Ang, S. H. (2014). Research design for business & management. Sage Publications.

[46]. Kyguoliene, A., & Svipas, L. (2019). Personal Entrepreneurial Competencies of Participants in Experiential Entrepreneurship Education. Management of Organizations: Systematic Research, 82, 37-51. https://doi.org/10.1515/mosr-2019-0012

[47]. Sadeghi, A. (2018). Success factors of high-tech SMEs in Iran: A fuzzy MCDM approach. Journal of High Technology Management Research. https://doi.org/10.1016/j.hitech.2018.04.007

[48]. Fornell, C., & Larcker, D. F. (1981). Evaluating Structural Equation Models with Unobservable Variables and Measurement Error. Journal of marketing research, 18(1), 39-50. https://doi.org/10.1177/002224378101800104

[49]. Frankfort-Nachmias, C. (2006). Research Methods in Social Sciences + General Social Survey 1996 Data Bank Cd-rom. Macmillan Higher Education. https://books.google.bt/books?id=hO_WPQAACAAJ

[50]. Malhotra, N. K., & Dash, S. (2011). Marketing Research an Applied Orientation. Pearson Publishing.

[51]. Jordan, P. J., & Troth, A. C. (2020). Common method bias in applied settings: The dilemma of researching in organizations. Australian Journal of Management, 45(1), 3-14. https://doi.org/10.1177/0312896219871976

[52]. Cooper, B., Eva, N., Zarea Fazlelahi, F., Newman, A., Lee, A., & Obschonka, M. (2020). Addressing common method variance and endogeneity in vocational behavior research: A review of the literature and suggestions for future research. Journal of vocational behavior, 121, 103472. https://doi.org/10.1016/j.jvb.2020.103472

[53]. Finch, W. H., & French, B. F. (2015). Latent variable modeling with R. Routledge, Taylor & Francis Group.

[54]. Kline, P. (1994). An Easy Guide to Factor Analysis Routledge.



21 Woodlands Close #02-10 Primz Bizhub Singapore 737854

Email:editorial_office@as-pub.com