Article Sidebar

Download
PDF
Statistic
Read Counter : 430 Download : 324

Downloads

Download data is not yet available.

Main Article Content

Abstract

Sustainable development is one of the topical issues posing a global challenge to the business world. To remain successful in today's competitive business environment, Small and Medium-Scale Enterprises (SMEs) must find a way to exist by adapting to dynamic sustainability challenges. The study aimed to examine Hawley’s Risk Theory of Profit's underpinning role in explaining the connection between Risk Intelligence (RI) and SMEs’ sustainability (SUS). It was understood that risk could pose both opportunities and threats to business, and therefore, proactive detection is paramount to address the risk capable of ridiculing sustainability. Therefore, we proposed integrating the moderating role of financial performance in the relationship between Nigerian SMEs' risk intelligence and sustainability. The study found Hawley’s theory relevant to risk and sustainability tradeoff. Previous studies proxied risk intelligence by knowledge management, financial literacy, and risk-taking propensity, which paved the way for developing a framework for attaining sustainable SMEs in Nigeria. We concluded that SME’s sustainability could be ensured by effectively managing inherent risks and should be incorporated into Enterprise Risk Management (ERM) systems.

Keywords

Sustainability Risk Intelligence Financial Performance Enterprise Risk Management

Article Details

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

How to Cite
Garba, M., Salleh, F., & Hafiz, U. A. (2022). Underpinning Hawley’s Risk Theory of Profit on Risk Intelligence and Sustainability Relations of SMEs in Nigeria. Ilomata International Journal of Management, 3(2), 140-150. https://doi.org/10.52728/ijjm.v3i2.469

References

  1. Adobor, H. (2020). Entrepreneurial failure in agribusiness: evidence from an emerging economy. Journal of Small Business and Enterprise Development, 27(2), 237–258. https://doi.org/10.1108/JSBED-04-2019-0131
  2. Akhtar, C. S., Ismail, K., Ndaliman, M. A., Hussain, J., & Haider, M. (2015). Can Intellectual Capital of SMEs Help in Their Sustainability Efforts. Journal of Management Research, 7(2), 82. https://doi.org/10.5296/jmr.v7i2.6930
  3. Alshehhi, A., Nobanee, H., & Khare, N. (2018). The Impact of Sustainability Practices on Corporate Financial Performance: Literature Trends and Future Research Potential. Sustainability, 10(2), 494. https://doi.org/10.3390/su10020494
  4. Anwar, M. (2018). Business model innovation and SMEs performance—Does competitive advantage mediate? International Journal of Innovation Management, 22(07), 1850057. https://doi.org/10.1142/S1363919618500573
  5. Ayanda, A. M., & Laraba, A. S. (2011). Small and Medium Scale Enterprises as A Survival Strategy for Employment Generation in Nigeria. Journal of Sustainable Development, 4(1). https://doi.org/10.5539/jsd.v4n1p200
  6. Barkemeyer, R., Holt, D., Preuss, L., & Tsang, S. (2014). What Happened to the ‘Development’ in Sustainable Development? Business Guidelines Two Decades After Brundtland. Sustainable Development, 22(1), 15–32. https://doi.org/10.1002/sd.521
  7. Bidmon, C. M., & Knab, S. F. (2018). The three roles of business models in societal transitions: New linkages between business model and transition research. Journal of Cleaner Production, 178, 903–916. https://doi.org/10.1016/j.jclepro.2017.12.198
  8. Bitar, M., Pukthuanthong, K., & Walker, T. (2018). The effect of capital ratios on the risk, efficiency and profitability of banks: Evidence from OECD countries. Journal of International Financial Markets, Institutions and Money, 53, 227–262. https://doi.org/10.1016/j.intfin.2017.12.002
  9. Burhan, N. A. S., Che Razak, R., Salleh, F., & Labastida Tovar, M. E. (2017). The higher intelligence of the ‘creative minority’ provides the infrastructure for entrepreneurial innovation. Intelligence, 65, 93–106. https://doi.org/10.1016/j.intell.2017.09.007
  10. Caputo, F., Carrubbo, L., & Sarno, D. (2018). The Influence of Cognitive Dimensions on the Consumer-SME Relationship: A Sustainability-Oriented View. Sustainability, 10(9), 3238. https://doi.org/10.3390/su10093238
  11. Chakraborty, S., & Swinney, R. (2021). Signaling to the Crowd: Private Quality Information and Rewards-Based Crowdfunding. Manufacturing & Service Operations Management, 23(1), 155–169. https://doi.org/10.1287/msom.2019.0833
  12. Chang, A.-Y., & Cheng, Y.-T. (2019). Analysis model of the sustainability development of manufacturing small and medium- sized enterprises in Taiwan. Journal of Cleaner Production, 207, 458–473. https://doi.org/10.1016/j.jclepro.2018.10.025
  13. Chege, S. M., & Wang, D. (2020). The influence of technology innovation on SME performance through environmental sustainability practices in Kenya. Technology in Society, 60, 101210. https://doi.org/10.1016/j.techsoc.2019.101210
  14. Cherednik, I. (2019). Artificial intelligence approach to momentum risk-taking. In Risk Management. https://doi.org/https://doi.org/10.48550/arXiv.1911.08448
  15. de Pádua Pieroni, M., Pigosso, D. C. A., & McAloone, T. C. (2018). Sustainable Qualifying Criteria for Designing Circular Business Models. Procedia CIRP, 69, 799–804. https://doi.org/10.1016/j.procir.2017.11.014
  16. De Vos, A., Van der Heijden, B. I. J. M., & Akkermans, J. (2020). Sustainable careers: Towards a conceptual model. Journal of Vocational Behavior, 117, 103196. https://doi.org/10.1016/j.jvb.2018.06.011
  17. Desmond, M., & Wilmers, N. (2019). Do the Poor Pay More for Housing? Exploitation, Profit, and Risk in Rental Markets. American Journal of Sociology, 124(4), 1090–1124. https://doi.org/10.1086/701697
  18. Dhahri, S., & Omri, A. (2018). Entrepreneurship contribution to the three pillars of sustainable development: What does the evidence really say? World Development, 106, 64–77. https://doi.org/10.1016/j.worlddev.2018.01.008
  19. Evans, D. (2015). Risk intelligence: How to live with uncertainty (1st ed.). Simon and Schuster. https://www.simonandschuster.com/books/Risk-Intelligence/Dylan-Evans/9781451610918
  20. Eyhorn, F., Muller, A., Reganold, J. P., Frison, E., Herren, H. R., Luttikholt, L., Mueller, A., Sanders, J., Scialabba, N. E.-H., Seufert, V., & Smith, P. (2019). Sustainability in global agriculture driven by organic farming. Nature Sustainability, 2(4), 253–255. https://doi.org/10.1038/s41893-019-0266-6
  21. Gorbachev, O., & Luengo-Prado, M. J. (2019). The Credit Card Debt Puzzle: The Role of Preferences, Credit Access Risk, and Financial Literacy. The Review of Economics and Statistics, 101(2), 294–309. https://doi.org/10.1162/rest_a_00752
  22. Gross-Gołacka, E., Kusterka-Jefmańska, M., & Jefmański, B. (2020). Can Elements of Intellectual Capital Improve Business Sustainability?—The Perspective of Managers of SMEs in Poland. Sustainability, 12(4), 1545. https://doi.org/10.3390/su12041545
  23. Gunilla, A. (2014). Sustainability and SMEs: The Next Steps. In Sustainable Entrepreneurship (1st ed., pp. 265–268). https://doi.org/10.1007/978-3-642-38753-1_20
  24. Hassall, M. E., Hannah, R., & Lant, P. (2015). Lessons learned from teaching about risks and impacts in industry. Hazards Australasia, 1535. https://www.researchgate.net/publication/279978621_Lessons_learned_from_teaching_about_risks_and_impacts_in_industry
  25. Hassan, N. A., Ahmad, N. H., & Thurasamy, R. (2018). Sustainability in Manufacturing SMEs: An Appraisal of Malaysian Government Policy. Proceedings of The International Conference on Law and Globalisation, 640–651. https://www.researchgate.net/profile/Musa-Umar/publication/328476830_An_Exploration_of_Politicization_of_Religion_in_Nigeria’s_Democratization_Process/links/5bd02d9a92851c1816bca773/An-Exploration-of-Politicization-of-Religion-in-Nigerias-Democratization-
  26. Ishtiaq, M., Songling, Y., Hassan, A., & Hayat, A. (2020). The Role of Financial Literacy in Resource Acquisition and Financial Performance; Moderating Role of Government Support. International Journal of Business and Economics Research, 9(1), 29. https://doi.org/10.11648/j.ijber.20200901.14
  27. Josefy, M. A., Harrison, J. S., Sirmon, D. G., & Carnes, C. (2017). Living and Dying: Synthesizing the Literature on Firm Survival and Failure across Stages of Development. Academy of Management Annals, 11(2), 770–799. https://doi.org/10.5465/annals.2015.0148
  28. Kara, M. E., Oktay Fırat, S. Ü., & Ghadge, A. (2020). A data mining-based framework for supply chain risk management. Computers & Industrial Engineering, 139, 105570. https://doi.org/10.1016/j.cie.2018.12.017
  29. Khalifat, S., & Gmira, F. (2017). Competitive intelligence in SMEs: turning risks into value. Journal of Innovation and Applied Studies, 19(3), 519–525. http://www.ijias.issr-journals.org/abstract.php?article=IJIAS-16-226-02
  30. Kulathunga, K. M. M. C. B., Ye, J., Sharma, S., & Weerathunga, P. R. (2020). How Does Technological and Financial Literacy Influence SME Performance: Mediating Role of ERM Practices. Information, 11(6), 297. https://doi.org/10.3390/info11060297
  31. Lam, J., & Gannon, E. (2014). The role of sustainability in enterprise risk management. https://www.workiva.com/sites/workiva/files/pdfs/thought-leadership/the-role-of-sustainability-in-enterprise-risk-management-k1249-20171031_0.pdf
  32. López-Torres, G. C., Garza-Reyes, J. A., Maldonado-Guzmán, G., Kumar, V., Rocha-Lona, L., & Cherrafi, A. (2019). Knowledge management for sustainability in operations. Production Planning & Control, 30(10–12), 813–826. https://doi.org/10.1080/09537287.2019.1582091
  33. Meyers, G., & Van Hoyweghen, I. (2018). Enacting Actuarial Fairness in Insurance: From Fair Discrimination to Behaviour-based Fairness. Science as Culture, 27(4), 413–438. https://doi.org/10.1080/09505431.2017.1398223
  34. Moeller, R. R. (2011). COSO Enterprise Risk Management: Establishing Effective Governance, Risk, and Compliance Processes (2nd ed.). Wiley Publishing. https://www.wiley.com/en-us/COSO+Enterprise+Risk+Management%3A+Establishing+Effective+Governance%2C+Risk%2C+and+Compliance+Processes%2C+2nd+Edition-p-9780470912881
  35. Ndou, E., Gumata, N., & Ncube, M. (2017). Global Economic Uncertainties and Exchange Rate Shocks (1st ed.). Springer International Publishing. https://doi.org/10.1007/978-3-319-62280-4
  36. Offiong, A., Udoka, C., & Bassey, J. G. (2019). Financial risk and performance of small and medium enterprises in Nigeria. Investment Management and Financial Innovations, 16(4), 110–122. https://doi.org/10.21511/imfi.16(4).2019.10
  37. Pieper, J. R., Greenwald, J. M., & Schlachter, S. D. (2018). Motivating employee referrals: The interactive effects of the referral bonus, perceived risk in referring, and affective commitment. Human Resource Management, 57(5), 1159–1174. https://doi.org/10.1002/hrm.21895
  38. Ponis, S. T., & Christou, I. T. (2013). Competitive intelligence for SMEs: a web-based decision support system. International Journal of Business Information Systems, 12(3), 243. https://doi.org/10.1504/IJBIS.2013.052449
  39. Rahman, N. A., Yaacob, Z., & Radzi, R. M. (2016). The challenges among Malaysian SME: A theoretical perspective. World Journal of Social Sciences, 6(3), 124–132. https://www.researchgate.net/profile/Nurulhasanah-Abdul-Rahman/publication/309619147_The_Challenges_Among_Malaysian_SME_A_Theoretical_Perspective/links/581a3acf08aed2439386b0c6/The-Challenges-Among-Malaysian-SME-A-Theoretical-Perspective.pdf
  40. Rodríguez-Gutiérrez, M. J., Romero, I., & Yu, Z. (2020). Guanxi and risk-taking propensity in Chinese immigrants’ businesses. International Entrepreneurship and Management Journal, 16(1), 305–325. https://doi.org/10.1007/s11365-019-00566-9
  41. Roggi, O., & Ottonelli, O. (2013). An Evolutionary Perspective On The Concept Of Risk, Uncertainty And Risk Management. In Managing and Measuring Risk: Emerging Global Standards and Regulations After the Financial Crisis (1st ed., pp. 3–37). World Scientific Publishing Co. Pte. Ltd. https://doi.org/10.1142/9789814417501_0001
  42. Salehi, M., Lari DashtBayaz, M., & Khorashadizadeh, S. (2018). Corporate social responsibility and future financial performance. EuroMed Journal of Business, 13(3), 351–371. https://doi.org/10.1108/EMJB-11-2017-0044
  43. Salleh, F., Ibrahim, M. D., & Awang, Z. (2015). The Effects of Financial Factors on Takaful Demand in Malaysia. Journal of Entrepreneurship and Business, 3(1), 17–29. https://doi.org/10.17687/JEB.0301.02
  44. Schrader, D. E., & Ghosh, D. (2018). Proactively Protecting Against the Singularity: Ethical Decision Making in AI. IEEE Security & Privacy, 16(3), 56–63. https://doi.org/10.1109/MSP.2018.2701169
  45. Schwab, L., Gold, S., & Reiner, G. (2019). Exploring financial sustainability of SMEs during periods of production growth: A simulation study. International Journal of Production Economics, 212, 8–18. https://doi.org/10.1016/j.ijpe.2018.12.023
  46. Shah, H. A., Yasir, M., Majid, A., & Javed, A. (2019). Impact of networking capability on organizational survival of SMEs: Mediating role of strategic renewal. Pakistan Journal of Commerce and Social Sciences (PJCSS, 13(3), 559–580. https://www.econstor.eu/handle/10419/205267
  47. Shields, J., & Shelleman, J. M. (2015). ntegrating sustainability into SME strategy. Journal of Small Business Strategy, 25(2), 59–78. https://libjournals.mtsu.edu/index.php/jsbs/article/view/561
  48. Shrafat, F. D. (2018). Examining the factors influencing knowledge management system (KMS) adoption in small and medium enterprises SMEs. Business Process Management Journal, 24(1), 234–265. https://doi.org/10.1108/BPMJ-10-2016-0221
  49. Singh, M. P., Chakraborty, A., Roy, M., & Tripathi, A. (2021). Developing SME sustainability disclosure index for Bombay Stock Exchange (BSE) listed manufacturing SMEs in India. Environment, Development and Sustainability, 23(1), 399–422. https://doi.org/10.1007/s10668-019-00586-z
  50. Singh, S., Olugu, E. U., & Musa, S. N. (2016). Development of Sustainable Manufacturing Performance Evaluation Expert System for Small and Medium Enterprises. Procedia CIRP, 40, 608–613. https://doi.org/10.1016/j.procir.2016.01.142
  51. Vlasov, A. I., Shakhnov, V. A., Filin, S. S., & Krivoshein, A. I. (2019). Sustainable energy systems in the digital economy: concept of smart machines. Entrepreneurship and Sustainability Issues, 6(4), 1975–1986. https://doi.org/10.9770/jesi.2019.6.4(30)
  52. Wanner, T. (2015). The New ‘Passive Revolution’ of the Green Economy and Growth Discourse: Maintaining the ‘Sustainable Development’ of Neoliberal Capitalism. New Political Economy, 20(1), 21–41. https://doi.org/10.1080/13563467.2013.866081
  53. Winit, W., & Kantabutra, S. (2017). Sustaining Thai SMEs through perceived benefits and happiness. Management Research Review, 40(5), 556–577. https://doi.org/10.1108/MRR-04-2016-0083
  54. Yusoff, T., Wahab, S. A., Latiff, A. S. A., Osman, S. I. W., Zawawi, N. F. M., & Fazal, S. A. (2018). Sustainable Growth in SMEs: A Review from the Malaysian Perspective. Journal of Management and Sustainability, 8(3), 43. https://doi.org/10.5539/jms.v8n3p43