The purpose of this study is to investigate the role of Operational Risk Management (ORM) in the
successes of Small Medium Enterprise (SME’s) and to establish whether ORM has a direct correlation
to the survival rate of SME’s, which have been operational for a minimum period of five years. The
study was limited geographically to Gauteng South Africa, in particular the Kya Sands Industrial
area.
The South African Government is focusing on promoting small business to reduce the high
unemployment rate and to increase the growth of the economy through developing SME’s. Statistics
states that South Africa currently has an unemployment rate of 25.5 per cent, in the third quarter
of 2015 (Statistic South Africa, 2015), which is the worst rate since the first Labor Forces Survey
in 2008. It is well known that SME’s contribute significantly to the world’s economy.
After conducting a significant literature review, it was found that no applicable research has been
done globally or locally regarding ORM in SME’s as per NG & Kee (2012). Most research in ORM is
focused on large organisations, specifically the banking industry.
The need for this study arose as literature reviews reveals a high rate of SME failures, regardless
of various financial assistance programs from Government for starting and assisting SME’s.
In determining the impact of ORM by addressing the high probability of failure of SME’s in emerging
markets this research will be the first step in determining the value and trajectory of additional
insights for SME sustainability . Thus ORM could indirectly provide assistance in undertaking and
addressing the unemployment and economic freedom challenges in South Africa. This is unique and
new knowledge generating ground breaking finding s as ORM was not regarded nor researched,
as a critical contributing success factor for smaller companies.
This research had a positive approach and was of a quantitative and exploratory nature to
investigate the research question and problem statements. The research instrument was a
self-designed semi-structured enumerated questionnaire. Personal
ii
interviews were conducted with willing participants in order to obtain first hand data. This was an
avant-garde study. The results based on the facts and perception of the owners and managers
indicated the extent of implementation of ORM in the various business departments of the SME’s. It
was found that ORM is a contributing factor regarding the success of SME’s. As a result, the main
research problem and sub- problems were answered. Therefore ORM definitely plays a vital role in
the survival rate of a SME and can be regarded as a critical success factor for SME’s if
implemented and managed. Through identifying the facts and perceptions of the owners and managers
of SME’s regarding ORM, further research can be conducted to identify the extent that ORM can have
on the SME’s successes. / Graduate School of Business Leadership (SBL) / M.Tech. (Business Administration)
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:unisa/oai:uir.unisa.ac.za:10500/22969 |
| Date | 11 1900 |
| Creators | Allen, Benjamin Phillipus |
| Contributors | Le Roux, J. |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Dissertation |
| Format | 1 online resource (xiii, 98 leaves) : color illustrations |
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