ISSN: 2222-6990
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This literature review examines the implementation of Enterprise Risk Management (ERM) frameworks within Small and Medium Enterprises (SMEs), emphasizing the distinctive challenges and advantages for these organizations. SMEs often encounter obstacles such as limited financial resources, informal business processes, and a lack of specialized risk management expertise, which can impede effective risk management. Despite these challenges, the adoption of ERM frameworks can offer significant benefits, including improved risk identification and mitigation, enhanced decision-making capabilities, better resource allocation, and increased stakeholder confidence. The review identifies notable research gaps, including a scarcity of SME-focused studies, a lack of longitudinal research, and insufficient exploration of industry-specific ERM practices. The literature reveals contradictions, particularly concerning the complexity of ERM frameworks like COSO and ISO 31000, underscoring the necessity for simplified and tailored models for SMEs. However, there is a consensus on the critical role of leadership commitment, organizational culture, and the integration of ERM into strategic planning for successful implementation. Practical recommendations for SMEs include fostering a risk-aware culture, securing leadership commitment, and leveraging technology to enhance risk management processes. This review aims to contribute to a deeper understanding of ERM practices in SMEs and offers practical recommendations to enhance their resilience, competitiveness, and long-term success in a dynamic business environment.
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