Decision Tendencies of Entrepreneurs and Small Business Risk Management Practices

An in-depth interviewing approach was used to explore the risk thinking of entrepreneurs in small firms and their risk management practices. Five aspects of personal explanatory style and general concern for measurement were assessed. The following risk management practices were considered: the extent to which they adopted risk identification and risk evaluation processes; the degree to which they practised retained risk management practices of ignoring risk, risk avoidance and catastrophe planning; and the balance of proactive vs reactive and control vs knowledge-based styles of risk management in their businesses. Significant statistical relationships were found between the decision tendencies of the entrepreneurs and the risk management practices in their enterprises. The need for risk management theory and practice to recognise small business practices is highlighted.