Risk management as a tool to enhance the sustainability of fast moving consumer goods SMES in South Africa

Abstract

Despite small and medium enterprises (SMEs) being numerically predominant and the most vulnerable role players in the economy of many countries, little research has been conducted on risk management and sustainability of SMEs operating in the Fast Moving Consumer Goods (FMCG) sector of South Africa. This study fills this knowledge gap by investigating the extent to which risk management processes of SMEs operating in the FMCG sector of South Africa incorporate a robust analysis of sustainability factors. We achieve this by distributing questionnaires to a sample of 320 FMCG SMEs in the Cape Metropolitan area. Qualitative data were gathered by interviewing two risk experts to validate the quantitative data gathered through a survey questionnaire. The results show that the risk management processes of FMCG SMEs do not incorporate a robust analysis of the components of sustainability, negatively affecting their survival. Apart from filling the knowledge gap, the study has also significant implications for FMCG SME owner-managers and policymakers while revealing future research avenues.