The Utilisation of Enterprise Risk Management in Fast-Food Small, Medium and Micro Enterprises Operating in the Cape Peninsula
It is widely accepted that small, medium and micro enterprises (SMMEs) are pivotal to any country’s economic growth. In a South African dispensation, these business entities are believed to be the panacea to the economic challenges facing the country. Consequently, a number of initiatives have been deployed by national government to assist these business entities, inter alia, the formation of the Ministry of Small Business Development in 2014. Notwithstanding government support these business entities have received over the years, the sustainability of South African SMMEs still remains among the worst in the world. One of the main cited reasons for this weak sustainability is a lack of management skills, particularly risk management skills. Taking the latter into account, it comes as no surprise that previous studies show that South African SMMEs make use of customised risk management initiatives which are regarded as inadequate and/or ineffective. For this research study, the main objective was to determine the extent to which South African SMMEs utilise enterprise risk management (ERM) – a formal approach to manage risks in a holistic manner. To achieve the latter, a literature review was conducted from which relevant terms were conceptualised (see Chapter 2). Subsequently, primary data were collected using questionnaires, while taking into account various ethical considerations, and gleaned responses were analysed using both descriptive and inferential statistics (see Chapter 4). Although the inferential statistics suggested that the sampled South African SMMEs made use of ERM initiatives, further investigation revealed that these initiatives were used by chance as opposed to choice. Hence, it was concluded that these entities did not make use of ERM. In essence the results echoed the notion from scholarly literature that South African SMMEs unknowingly use ERM initiatives which are customised, inadequate and/or ineffective. Stemming from the conclusions reached, relevant recommendations were articulated to assist these business entities towards the implementation of ERM in a structured manner.