The Art, Craft, and Science of Risk Management in Small-and Medium-Sized Family Businesses

33 Pages Posted: 22 Aug 2019

See all articles by Jason Moschella

Jason Moschella

McGill University, Desautels Faculty of Management

Emilio Boulianne

Concordia University, Quebec - John Molson School of Business

Michel Magnan

Concordia University - Department of Accountancy

Date Written: January 17, 2019

Abstract

In this study, we investigate how risk management is practiced and perceived within the setting of small- and medium-sized businesses (SMEs). We fill a gap in the extant risk management literature, which focuses almost exclusively on large organizations. We interview SME owners to gain insight into the specific risk management activities they engage in, the drivers that lead to the adoption of said activities, their attitudes towards risk management, and how their accountants shape and contribute to risk management in SMEs. We find that rather than a specific set of formal processes, SME owners view risk management as a mindset that emphasizes the preservation of key assets, creation of competitive advantages, and development of business opportunities. Nevertheless, these activities are usually planned and deliberate. We also find that accountants add value to the risk management process by helping owners interpret financial and operating information and by analyzing trends in data.

Keywords: Risk Management, SME, Small Business, Management Accounting, Entrepreneurship

JEL Classification: D81, G32, L26

Suggested Citation

Moschella, Jason and Boulianne, Emilio and Magnan, Michel, The Art, Craft, and Science of Risk Management in Small-and Medium-Sized Family Businesses (January 17, 2019). Available at SSRN: https://ssrn.com/abstract=3379010 or http://dx.doi.org/10.2139/ssrn.3379010

Jason Moschella (Contact Author)

McGill University, Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal
Canada

HOME PAGE: http://mcgill.ca/desautels/jason-moschella

Emilio Boulianne

Concordia University, Quebec - John Molson School of Business ( email )

1455 de Maisonneuve Blvd. W.
Montreal, Quebec H3G 1M8
Canada

Michel Magnan

Concordia University - Department of Accountancy ( email )

Montreal, Quebec H3G 1M8
Canada

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