Effects of Enterprise Risk Management (ERM) and Economic Issues on the Performance of Manufacturing Sector-SMEs in Malaysia – A Conceptual Framework

Abstract

This study aims to construct a conceptual framework that describes effect of Enterprise Risk Management (ERM) on the relationship among organizational performance and economic issues. The study intended to establish whether ERM adoption and economic issues influence the performance of Small and Medium Enterprises (SMEs) as focusing in manufacturing sector. However, as compared to large businesses, small businesses became one of the highest failure rates. ERM is a form of micro risk management and a full approach to identify risk in all purposeful areas. However, based on previous studies, the study to examine the practices in adopting ERM especially in SMEs and the performance of SMEs are still lacking. Hence, the area of this paper will be focus on SMEs manufacturing which are 380 registered SMEs that listed under SME Corp. Malaysia.