Risk management capability building in SMEs: A social capital perspective

Gao, Simon S.; Sung, Ming C.; Zhang, Jane

Abstract

This article addresses the under-researched issue of risk management (RM) and risk management capability building in small and medium sized enterprise (SMEs). It draws upon theories of social capital to explain enablers and obstacles for RM capability building and practice sharing in a small and medium-sized construction enterprise in China. Two related propositions are made: first, RM capability is built by SMEs without formal structures and knowledge; and second, such firms are more likely to adopt informal processes to develop RM capability. The article concludes that the role of cognitive capital is the most important for the RM capability building of SMEs and that cognitive capital plays a crucial role in accumulating structural and relational capital. It proposes a model of cognitive capital-based RM capability building in which integrates communication, knowledge, relationship and learning.

Citation

Gao, S. S., Sung, M. C., & Zhang, J. (2013). Risk management capability building in SMEs: A social capital perspective. International Small Business Journal, 31(6), 677-700. https://doi.org/10.1177/0266242611431094

• Journal Article Type: Article
• Online Publication Date: Jan 15, 2012
• Publication Date: 2013-09
• Deposit Date: Jun 14, 2012
• Journal: International Small Business Journal
• Print ISSN: 0266-2426
• Electronic ISSN: 1741-2870
• Publisher: SAGE Publications
• Peer Reviewed: Peer Reviewed
• Volume: 31
• Issue: 6
• Pages: 677-700
• DOI: https://doi.org/10.1177/0266242611431094
• Keywords: Capability building; China; risk management; SMEs; social capital
• Public URL: http://researchrepository.napier.ac.uk/id/eprint/5398