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The Impact of Internal, External and Enterprise Risk Management on the Performance of Micro, Small and Medium Enterprises

Author

Listed:
  • Dewi Hanggraeni

    (Faculty of Economics and Business, Universitas Indonesia, Jl. Prof. Dr. Sumitro Djojohadikusumo, Depok, West Java 16424, Indonesia)

  • Beata Ślusarczyk

    (The Management Faculty, Czestochowa University of Technology, al. Armii Krajowej 19 B, 42-201 Czestochowa, Poland
    Faculty of Economic and Management Sciences, North-West University, Vaal Triangle Campus, P.O. Box 1174, Vanderbijlpark 1900, South Africa)

  • Liyu Adhi Kasari Sulung

    (Faculty of Economics and Business, Universitas Indonesia, Jl. Prof. Dr. Sumitro Djojohadikusumo, Depok, West Java 16424, Indonesia)

  • Athor Subroto

    (Faculty of Economics and Business, Universitas Indonesia, Jl. Prof. Dr. Sumitro Djojohadikusumo, Depok, West Java 16424, Indonesia)

Abstract

This paper aims to develop the role of internal factors, external factors, and risk management variables on MSMEs’ business performance. This research was conducted in underdeveloped regions of five provinces, which includes 14 cities in Indonesia—East Java, West Sumatra, North Sumatra, West Nusa Tenggara, and East Nusa Tenggara. The Resource-based view and Market-based view methods were chosen to measure 1401 data of MSMEs. The data was collected using offline questionnaires then processed using SPSS. This paper demonstrates a remarkable outcome for MSMEs, showing the significant result of risk management factors that includes risk assessment of marketing and financial management. Other independent variables of internal, external, and risk management factors also show important outcomes on MSMEs performance. This paper offers additional value of the implementation of ERM in MSMEs, which are spread in underdeveloped regions in Indonesia. The findings shown that the activity of the enterprises in identifying and managing risk would bring up the significant effect on operational business performances.

Suggested Citation

  • Dewi Hanggraeni & Beata Ślusarczyk & Liyu Adhi Kasari Sulung & Athor Subroto, 2019. "The Impact of Internal, External and Enterprise Risk Management on the Performance of Micro, Small and Medium Enterprises," Sustainability, MDPI, vol. 11(7), pages 1-17, April.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:7:p:2172-:d:221916
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