A comparative study of strategic risk assessment techniques in small vs. large businesses: A case study of Kano State.

A comparative study of strategic risk assessment techniques in small vs. large businesses: A case study of Kano State.

 

 

Background of the Study: Risk management is a crucial aspect of business strategy, helping firms identify, assess, and mitigate potential threats to their operations (Gul et al., 2024). Strategic risk assessment techniques, such as risk matrices, SWOT analysis, and scenario planning, are used by businesses to anticipate and plan for risks that could impact their performance. However, the application and effectiveness of these techniques can vary depending on the size and structure of the organization. Larger firms, with more resources and complex operations, often adopt more formalized and sophisticated risk assessment methods, while smaller firms may rely on simpler, less resource-intensive techniques (Kalu & Adegbola, 2023).

In Kano State, businesses of varying sizes face unique risks associated with market fluctuations, economic instability, and regulatory changes. Small businesses often lack the resources to implement comprehensive risk management systems, leading to an increased vulnerability to external shocks. In contrast, larger businesses are better equipped to conduct in-depth risk assessments and develop strategic responses to these risks. The comparative effectiveness of strategic risk assessment techniques between small and large businesses in Kano State remains underexplored, despite the critical role that effective risk management plays in business continuity and success.

This study will compare the risk assessment techniques used by small and large businesses in Kano State, examining how these methods influence the firms' ability to identify and mitigate risks effectively.

Statement of the Problem: Businesses in Kano State, particularly small enterprises, often struggle with identifying and managing risks due to limited resources and a lack of sophisticated risk assessment tools. Larger firms, on the other hand, have more robust risk management frameworks in place. Despite these differences, there is a lack of empirical research on how strategic risk assessment techniques differ between small and large businesses in the region. This study seeks to fill this gap by comparing the approaches used by both groups and assessing their effectiveness in managing risks.

Objectives of the Study:

1. To compare the strategic risk assessment techniques employed by small and large businesses in Kano State.

2. To assess the effectiveness of these risk assessment techniques in managing risks in small and large businesses in Kano State.

3. To identify the challenges and opportunities faced by small and large businesses in implementing strategic risk assessment techniques in Kano State.

Research Questions:

1. What strategic risk assessment techniques do small and large businesses in Kano State use?

2. How effective are the strategic risk assessment techniques employed by small and large businesses in managing risks?

3. What challenges do small and large businesses face in implementing strategic risk assessment techniques in Kano State?

Research Hypotheses:

1. Small businesses in Kano State use less formalized risk assessment techniques compared to large businesses.

2. The strategic risk assessment techniques employed by large businesses are more effective in managing risks compared to those used by small businesses.

3. Small businesses in Kano State face greater challenges in implementing strategic risk assessment techniques compared to large businesses.

Scope and Limitations of the Study: This study will focus on small and large businesses in Kano State, Nigeria, and will compare the strategic risk assessment techniques they employ. Limitations include potential biases in data collection, difficulties in comparing firms with different structures, and the generalizability of the results to other regions or sectors.

Definitions of Terms:

• Strategic Risk Assessment: The process of identifying, evaluating, and prioritizing risks in a business's strategy and operations.

• Small Businesses: Enterprises typically characterized by limited resources, fewer employees, and lower revenue.

• Large Businesses: Enterprises with significant resources, a larger workforce, and more complex operations.

 

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