According to the World Bank research involving small and medium enterprises (SMEs) from 104 developing countries has found that SMEs have the largest shares of job creation, highest sales growth and employment growth compare to large firm. However, large firm is more productive. Low productivity is one of the symptoms of SMEs failure or crisis and part of the risk. Similarly, SMEs in Malaysia involvements in business expose themselves to risks. Hence, SMEs need risk management. The concept of risk management evolves over the years and now being referred as Enterprise Risk Management (ERM). ERM can be defined as an integrated approach of mitigating risk to achieve business objectives and attain competitive advantage. A review of current literature showed that the adoption of ERM contribute to large firm performance. However studies that have been conducted to examine ERM adoption among SMEs and its performance are still lacking. Furthermore, SMEs involvement in risk management is not encouraging. Although ERM is known as a tool to increase shareholders’ value, still not many firms have adopted this new tool to manage risks. Thus, the main objective of this paper is to propose a conceptual framework using Thong’s DTOE Model (1999) in the context of ERM practices among Malaysian SMEs. The framework consist of four (4) constructs namely decision maker, technology, organization and environment. From the review of various literatures, the four constructs proposed do supported by many researches but yet still can be explore to enhance SMEs performance in Malaysia.
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In-Text Citation: (Mahmod et al., 2018)
To Cite this Article: Mahmod, M. S., Aziz, K., Yazid, A. S., Rasid, N., Salleh, F., Ghazali, P. L., & Mahmood, S. (2018). A Conceptual Framework of ERM Practices Among SMEs In Malaysia. International Journal of Academic Research in Business and Social Sciences, 8(11), 1209–1221.
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