Abstract:
In dynamic business environments, Small and Medium-sized Manufacturing Enterprises (SMEs) are under tremendous pressure due to the free market economy, rapid technological development and continuous changes in customer demands. Moreover, the smooth running of SMEs presents significant challenges irrespective of the technological and human resources they may have at their disposal. In their business operations, SMEs continuously encounter daily internal and external undesirable events and unwanted setbacks to their operations that detract from their business performance. These are referred to as 'disturbances' in this research which can be seen from different perspectives and can be described by various words such as disruptions, failures, errors, defects, losses and waste. Among the disturbances, some can put SMEs at significant risks in terms of loss of; production, manufacturing capability, human resources, market share and, of course, economic losses. The subject of this research is confined to the management of risks associated with internal and external disturbances which can affect SMEs, these fall into three categories, namely, operational, occupational and economic risks. To deal with these disturbances, SMEs need a systematic method of approach to identify and treat their potential effects along with an appropriate set of tools. In order to achieve this, a strategic approach is initially required to identify typical risk determinants among the potential disturbances and their linkage with potential risks. In connection with this, the research has developed a new and novel approach for mapping disturbances and their associated risks. It has clearly addressed how the strategic, operational and technical functions of an organization become the sources of risk factors, and why an SME needs to consider the continual assessment of these functions while formulating and implementing a risk management approach. The research carried out an empirical investigation applying a multi-method approach, called triangulation, which combined a mailed survey with case studies. With the help of the mail survey, the researcher has collected and analyzed data obtained from 32 SMEs in New Zealand. The analysis has been extended and enriched by the findings from five in-depth longitudinal case studies over an eight-month period. The mail survey improved the form and strength of the conceptual relationships proposed by the researcher and the case studies added a more holistic and richer contextual understanding of the survey results. They also helped the researcher to clinically examine the theoretical constructs in more depth. In the context of the application of traditional risk management, the SMEs were found to focus only on employee health and safety, even though the overall safety culture was found to be relative weak in some organizations. It was found that the understanding and practice of enterprise-wide risk management among SME managers was very limited. With their existing practices and strategic measures, they could not identify the actual risk determinants affecting their organizations, and neither could they identify the associated risks arising from these. It was also found that the SMEs were not in a good position to manage and control the risks associated with the disturbances investigated. Major weaknesses were found in the identification and assessment of operational risks. This research has identified a set of 14 internal and six external typical disturbances encountered by manufacturing SMEs. It has also identified a set of 14 risk indicators among the business performance factors. The identified set of internal and external disturbances, and risk indicators, should provide a quick reference or benchmark for SMEs. It is found that the natures of the disturbances are idiosyncratic and dynamic, and originate from different sources at different times. Some originated from strategic sources, some from operational sources, some from technical sources, while there were also some which originated from external sources. Again, some of the disturbances were found to originate from more than one source. Moreover, the consequences of the disturbances vary at different times. Therefore, these need to be dealt with by adopting a dynamic and strategic approach to managing their associated risks, which is what is offered by the developed models and methodologies. In conclusion, the research findings presented in this thesis will, it is hoped, add to the body of knowledge on good practices in risk management resulting from disturbances which can significantly affect SMEs, and that they may also be useful to both management professionals and researchers in the field of SME risk management. The developed framework, composed of models and methodologies, describes the mechanisms of the emanating of risks from daily disturbances and demonstrates a strategic approach to managing the risks associated with the disturbances. With the help of the developed models and methodologies, it is expected that an SME could be able to mange operational, occupational and economic risks more effectively.