A RESEARCH ON ENTERPRİSE RISK MANAGEMENT FOR SME'S AND THE AWARENESS OF RISK MANAGEMENT IN COMPANIES

Hakan SARITAŞ ¹ , Yusuf KAYA²

Labor-intensive Small- and Medium-Sized Enterprises (SMEs) with low capital, which provided service solely in their own specific area before the globalization, have started to compete with the multinational companies in order to survive and maintain their operations in a globalized world. Enterprise Risk Management is an integrated risk management concept which arose as a result of the existing unsuccessful risk management mentalities due to the financial shocks of the last 20 years. In this study, the purpose is to explain the main scope of the Enterprise Risk Management and to question its necessity for SMEs. In the empirical study, the Enterprise Risk Management awareness of 157 enterprises, which were non-public companies and the financial data of which were obtained, was measured. Furthermore, the financial data of the enterprises were analyzed and the possibility of them to open a risk department was assessed via the Population Averaged Panel Data Model. The results of the analysis and survey show that SMEs have not obtained the Enterprise Risk Management awareness in Turkey yet. According to the evaluation, the possibility of enterprises to open a risk department increases as their financial data tends to negative.

Keywords
Enterprise Risk Management, SMEs, Risk Management, Population Averaged,, Risk,