Financial impediments in risk management mechanisms of Greek Small and Medium Enterprises

  • ANDREAS KARAOULANIS

Abstract

Micro Small and Medium Enterprises (SMEs) in contemporary Greece have difficulties in overcoming their financial risks via the use of their risk management mechanisms. The main reason for this failure is the presence of several financial impediments which prevent such risk management mechanisms to perform efficiently enough. So, the aim of this research is to unveil these financial impediments while the research question is “What are the financial impediments that interfere with the Greek SMEs’ risk management mechanisms?”


 


The method that was used was the survey one by the use of questionnaires which were distributed face to face and by email. The data was analyzed by the use of the Dedoose software following a qualitative approach.


The findings showed that the SMEs that were investigated used only informal and non- sophisticated risk management mechanisms, while the financial impediments that prevented such mechanisms to operate efficiently enough were the general unstable financial and political climate, the capital controls and the SMEs’ limited access to bank financing.


The results of this research can have very important societal implications as they can show to SMEs’ owners the importance of the implementation of the right risk management mechanisms, something which can lead them to sustainable development and to general societal prosperity on the long run.


Keywords Financial impediments, risk management, SMEs, Greece.

References

Aven T., 2012. “The risk concept- historical and recent development trends”. Reliability Engineering and System Safety Journal. Elsevier. Vol.99, pp. 33-44.

Borges J.; Machado J., 2012. “Risks and Risk Management Mechanisms: An Analysis of the Perceptions of Producers of Agricultural Commodities” Interdisciplinary Journal of Research in Business. Vol. 2(5), pp.27- 39).
Bowen, G.A. 2008, "Naturalistic inquiry and the saturation concept: a research note", Qualitative Research, vol. 8, no. 1, pp. 137-152.
Brustbauer, J. 2016, "Enterprise risk management in SMEs: Towards a structural model", International Small Business Journal, vol. 34, no. 1, pp. 70-85.

Carbó‐Valverde, s. Rodríguez‐Fernández, F. & Udell, G.F. 2016, "Trade Credit, the Financial Crisis, and SME Access to Finance", Journal of Money, Credit and Banking, vol. 48 (1), pp. 113-143.

Chrysopoulos, 2016. “Greece at Top of Small-Medium Business Taxation” Greekreporter.com [online]. Available at:< http://greece.greekreporter.com/2016/05/16/greece-at-top-of-small-medium-business-taxation/> [Accessed 29 January 2017].

Cnn.gr., 2016. Οριστικο λουκετο για 100 επιχειρησεις καθε μερα. [online]. Available at:< http://www.cnn.gr/money/epixeiriseis/story/39726/oristiko-loyketo-gia-100-epixeiriseis-kathe-imera> [Accessed 3 February 2017].

Codex.vr.se., n.d. Professional ethics. [online]. Available at:< http://www.codex.vr.se/en/forskarensetik.shtml> [Accessed 4 February 2017].

Cuzdriorean, D.D. 2014, "SMEs financial risk management assessment in an emerging country: a sad reality of if and cons", African J. of Accounting, Auditing and Finance, vol. 3, no. 3, pp. 224.

Denscombe, M. 2010, The good research guide: for small-scale social research projects, 4th edn, Open University Press, Maidenhead.

Ec.europa.eu., n.d., What is a SME? [online]. Available at:< http://ec.europa.eu/growth/smes/business-friendly-environment/sme-definition_el> [Accessed 2 February 2017].

European Foundation for the Improvement of Living and Working Conditions, EF/12/47/EN 5 of 2013 on the Restructuring in SMEs: Greece.

Farid J.A., 2014. What is Risk: A Practitioner’s Guide to Risk Management. UK: Palgrave Macmillan.
Falkner Eva Maria, Martin R.W. Hiebl, (2015)," Risk management in SMEs: a systematic review of available evidence ", The Journal of Risk Finance, Vol. 16 Iss 2 pp. 122 – 144.

Financial Times Lexicon., n.d. “Definition of gross value added GVA” [online] Available at:< http://lexicon.ft.com/Term?term=gross%20value%20added%20GVA> [Accessed 28 January 2017].

Georgousopoulou, M., Chipulu, M., Ojiako, U. & Johnson, J. 2014, "Investment risk preference among Greek SME proprietors: a pilot study", Journal of Small Business and Enterprise Development, vol. 21, no. 1, pp. 177-193.
Giannacourou M., Kantaraki M., Christopoulou V., 2014. “The perception of crisis by Greek SMEs and its impact on managerial practices” Procedia- Social and Behavioural Sciences. Vol.175, pp.546-551.

GSEVEE; ESEE; KEEE; TEGR; SETE, 2014. The development of SMEs in Greece. Policy document. Athens: GSEVEE; ESEE; KEEE; TEGR; SETE
HBA, 2013. Access to Finance for SMEs in Greece: Report of High Level Meeting of Representatives [pdf]. HBA. Available at:< http://www.hba.gr/6Mme/UplFiles/deltia_typou/Report_Access_to_Finance_for_SMEs_in_Greece.pdf> [Accessed 3 February 2017].
Hubbard D., 2009. “The failure of Risk management: Why it’s broken and How to fix it”.New Jersey: Willey J. & Sons, Inc.
Hyz A., 2011 “Small and Medium Enterprises (SMEs) in Greece - Barriers in Access to Banking Services. An Empirical Investigation”. International Journal of Business and Social Science. Vol 2(2), pp. 161-165.
Jundrichovska I., 2013. “Financial management in SMEs” European Research Studies Journal. Vol. 16(4), pp.80-96.
Kaplanoglou, G., Rapanos, V.T. & Daskalakis, N. 2016, "Tax compliance behaviour during the crisis: the case of Greek SMEs", European Journal of Law and Economics, vol. 42, no. 3, pp. 405-444.

Karaoulanis A., 2015a. “Strategy Formulation for SMEs in Greece’s Uncertain Environment”. Journal of Social Sciences Research, Vol 9(2), pp.1800-1803.

Karaoulanis A., 2015b. “Combination of different perspectives in strategy formulation”. Journal of Social Sciences Research, Vol 9(2), pp. 1854-1857.

Karaoulanis A., 2017. “Social Dimensions of Distance Post- Graduate Education in Greece”. International Journal of Computers and Technology. Vol 15(14), pp. 7472- 7485.

Lacina L.;Vavrina J., 2013. “The impact of financial and economic crisis on SME’s in Greece and Ireland”. Acta Universitatis Agriculture et Silviculturae Mendelianae Brunensis. Vol 111(4), pp.1005-1016.

Malkoutzis N., 2016 “Greek paradoxes hold back business”. E-kathimerini.com [online]. Available at:< http://www.ekathimerini.com/209339/article/ekathimerini/business/greek-paradoxes-hold-back-business> [Accessed 29 January 2017].

Μανιφαβα Δημητρα, 2015. “Σε μια επταετία έκλεισαν 229.000 μικρές και μεσαίες επιχειρήσεις στην Ελλάδα”. [online] Kathimerini.gr. Available at:< http://www.kathimerini.gr/824685/article/oikonomia/epixeirhseis/se-mia-eptaetia-ekleisan-229000-mikres-kai-mesaies-epixeirhseis-sthn-ellada> [Accessed 26 January 2017].

NBG, 2016. “Survey of Greek SMEs.January 2016” [online]. National Bank of Greece. Available at:< https://www.nbg.gr/en/the-group/press-office/e-spot/reports/smes-2015-h2-en> [Accessed 29 January 2017].

NSW Department of State and Regional Development. 2005. Risk management guide for small business. [pdf]. Small Business Development Division. Available at:< http://www.significanceinternational.com/Portals/0/Documents/2005-sme-risk-management-guide-global-risk-alliance-nsw-dsrd.pdf> [Accessed 4 February 2017].
O’Reilly, M. & Parker, N. 2013; 2012;, "‘Unsatisfactory Saturation’: a critical exploration of the notion of saturated sample sizes in qualitative research", Qualitative Research, vol. 13, no. 2, pp. 190-197.

Protothema.gr, 2016. “Οι μικρομεσιαες επιχειρησεις καλυπτουν το 57% της απασχολησης στην Ελλαδα” Protothema.gr [online]. Available at: < http://www.protothema.gr/economy/article/599599/oi-mikromesaies-epiheiriseis-kaluptoun-to-57-tis-apasholisis-stin-ellada/> [Accessed 26 January 2017].
Queensland Health, 2007. “Queensland ‘Stay On Your Feet” Community Good Practice Toolkit- Phase 1 materials: Surveys/questionnaires”. [pdf]. Queensland Health. Available at: < http://www.health.qld.gov.au/stayonyourfeet/documents/33345.pdf> [Accessed 20 November 2016].
Wymenga P., Dr. Spanikova, Dr. Derbyshire J., Barker A., 2011. “Are EU SMEs recovering from the crisis?” [pdf] Rotterdam: Annual Report on EU Small and Medium sized Enterprises 2010/2011. Available at:< http://ec.europa.eu/DocsRoom/documents/15770/attachments/1/translations/en/renditions/native> [Accessed 28 January 2017].
Yin, R.K. 2014. Case Study Research: Design and Methods. 5th Ed. Los Angeles: Sage Publication.

Zairis A., 2015. “The Effects of the Financial Crisis on the Performance of Greek SME's”. International Journal of Business, Humanities and Technology. Vol 5(6), pp. 29-37.
Published
2017-05-25
How to Cite
KARAOULANIS, ANDREAS. Financial impediments in risk management mechanisms of Greek Small and Medium Enterprises. INTERNATIONAL JOURNAL OF MANAGEMENT & INFORMATION TECHNOLOGY, [S.l.], v. 12, n. 1, p. 3128-3152, may 2017. ISSN 2278-5612. Available at: <http://cirworld.com/index.php/ijmit/article/view/6111>. Date accessed: 23 oct. 2017. doi: https://doi.org/10.24297/ijmit.v12i1.6111.
Section
Editorial