Literature Review

• Thomas Henschel

This chapter assembles literature on various aspects of risk management which together may constitute a comprehensive approach to the topic. Although this study focuses on German SMEs, the international literature has also been reviewed. Moreover, the review has not been restricted to SME research; findings on larger firms have been incorporated, to evaluate whether instruments for larger firms may also be useful for smaller ones and because for some issues there is no SME literature available. Section 2.1 briefly introduces into the current state of the literature on risk management and related topics. The issues dealt with are centred around what is called by this thesis the “holistic risk management approach.” Section 2.2 analyses the research into management behaviour and the attitude to risk, and it describes the special characteristics of SMEs. Section 2.3 reviews business planning activities and the consideration of risk figures within planning systems. Section 2.4 examines the importance of performance measurement systems – such as the Balanced Scorecard – and their application for risk management purposes. Risk management in the stricter sense is discussed in Section 2.5, with its aspects of risk management process (Section 2.5.1), risk management organization (Section 2.5.2) and project risk management (Section 2.5.3). In Section 2.6 typologies to assess business strategies are critically reviewed, whether they already cover risk management considerations or whether they can be adopted to evaluate the companies’ risk management capabilities. Section 2.7 then summarizes the findings of the literature review which have shown to be of particular relevance for the approach of this thesis.

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