Risk Management in German SMEs: An approach of implementing risk management in German SMEs

This report and the linked research have been executed in the course “STO711”, which is the final master dissertation during the “Master of Business Management” studies at Plymouth University. Due to the world-wide connected economy and the fast-changing environment companies need to react fast to these conditions. Especially in Germany the bad digital infrastructure and the demographical change can become a major threat if they are not considered in the future. German SMEs are an important part of the economy as they employ the most workers. Thus, the currently high rate of bankruptcies is a threat for the economy. Considering this situation, the research questions accrued starting with the challenges German SMEs face, followed by the question if sufficient risk management system exist in German SMEs. Finally, an adjusted risk management system should be outlined to offer a benefit for SMEs. Asking these questions, a literature review is executed referring to risk, risk management, the process, laws and regulations as well as some theoretical information about SMEs. Thereafter, the methodology of different research approaches is outlined, since four interviews in SMEs are executed. Doing this qualitative research practical information about risk management in these companies are gathered. Coming to the results, the challenges for German SMEs are as outlined in the beginning. Moreover, the interviewed companies cover risks as they want to save the companies survival with the best possible success. Looking at the second research question it becomes apparent that sufficient risk management systems so not exist in German SMEs. Thus, the code of practise developed in this report is a foundation for further implementations and is the answer to the third research question. In the code of practice the focus is on the risk identification during the decision process. Therefore, the manager and responsible employees need to execute the risk management. During the process tools like the Risk-Map and the persuasibility portfolio are used. Limitations are the number of companies interviewed and the similar branches they are operating in. Thus, in further research the focus needs to be on the variety of results and the timeframe this research is executed in needs to be considered