Application of risk management processes in small and micro retail enterprises within the city of Tshwane Metropolitan Municipality, Gauteng: a case study
Small and micro retail enterprises share a competitive space with large retailers that
are well resourced, have established brands and view risk management as a vital
tool for business sustainability. The failure rate of small, medium and micro
enterprises (SMMEs) is estimated to be between 70% and 80% (Adeniran and
Johnston, 2011). Positioning in the shared competitive space has, therefore,
become a challenge for many small and micro retail enterprises due to various
obstacles and factors. In reality, the competitive space has contracted. As a result,
what used to be a traditionally successful small business in the market space may
not be relevant due to the global shift, emerging risks and customer perceptions of
price, value and quality.
The world is riskier and risks are inherent. This research study focused on how small
and micro retail enterprises in the City of Tshwane Metropolitan Municipality (CTMM)
effectively applied risk management processes to manage the obstacles and factors
that cause failure. A qualitative research design, using a
semi-structured interview tool and observations provided sufficient data on three
small and micro retailers in the City of Tshwane (CoT) Central Business District
(CBD). The study revealed that the small and micro retailers faced internal and
external risks in the CoT. However, the risk management processes consisted of
fragmented processes that were reactive, did not consider risks on the total
enterprise level, did not conduct risk assessments, did not select appropriate risk
responses and did not formulate business objectives. Moreover, the participants of
the small and micro retailers lacked risk awareness, types of risk and risk
management, and they had not attended training. As a result, they were not aware
of the comprehensive benefits of managing risks in their enterprises. The study
recommended that in order to improve their chances of survival, the small and micro
retailers should implement risk management processes effectively.Graduate School of Business Leadership (SBL)M.B.A
