Thriving amid Uncertainty: How Enterprise Risk Management Shapes the Confluence of Business Strategy and Financial Performance of Micro, Small and Medium Enterprises in Ghana

The paper research examines the moderating role of enterprise risk management on the effect of business strategy on the financial performance of micro, small and medium-sized enterprises in Ghana. The study utilized a quantitative research design, wherein survey data was gathered from a sample of 356 micro, small and medium-sized enterprises. The research examined the effects of implementing a differentiation strategy, cost leadership strategy, and product/service diversification on the financial performance of an organization. Furthermore, the study investigated the moderating influence of enterprise risk management on these associations. The findings established that the implementation of a differentiation strategy and diversification of products or services can lead to a positive effect on financial performance. Conversely, adopting a cost leadership strategy may have an adverse impact. Furthermore, the research illustrates that the proficient execution of enterprise risk management practices amplifies fiscal efficacy and mediates the correlation between corporate strategy and financial performance. The implications of these findings are significant for managers of micro, small and medium-sized enterprises, policymakers, and researchers. Specifically, the findings underscore the importance of strategic decision-making and risk management as critical factors in achieving financial success.