Shrinkage risk management initiatives in retail SMMEs operating in the Cape Town city bowl

Abstract

Failure to manage shrinkage risks may have dire consequences on the economic sustainability of any trading business entity. In a South African Small, Medium and Micro Enterprise (SMME) dispensation, shrinkage risks are among the greatest risks faced by these businesses’ entities. According to scholarly literature, shrinkage risks are not appropriately managed in South African SMMEs due to the implementation of inadequate and/or ineffective risk management initiatives. Hence, the inference was made that these business entities, particularly those operating in the retail industry, have weak economic sustainability due to their implementation of ineffective risk management initiatives to appropriately manage shrinkage risks. The foregoing was done by means of conducting empirical research which fell within the positivistic research paradigm by collecting data from 56 members of management of South African SMMEs. Stemming from the results, although sampled South African retail SMMEs were found to have limited exposure to shrinkage risks, their shrinkage risk management initiatives were found to be ineffective