Risk Management

Céline Bérard is Assistant Professor of Management Sciences at the University of Lyon (Lumière University Lyon 2, France) and a member of the research laboratory Coactis. Her research focuses on risk management in SMEs and the strategic decision-making process in complex situations.Christine Teyssier is Assistant Professor of Management Sciences at the University of Lyon (Jean Monnet University, France) and a member of the research laboratory Coactis. Her research concentrates on risk management and the financial problems associated with business development, particularly in an SME context.

• Preface xiiiIntroduction xviiMaria CREMAPart 1 Risk Management, Governance and Stakeholder Value Creation 1Chapter 1 Role of the Governance System in Strategic Risk Management 3Martine SEVILLE and Christine TEYSSIER1.1 Introduction 31.2 The role of managers and the governance system in risk management: enabling and constraining influences 41.2.1 Managers of SMEs shape risk management in their company 41.2.2 Extended governance system as support to managers of SMEs in the strategic management of risks 51.3 Comparison of proposals in nine SMEs cases 91.3.1 Presentation of the sample 91.3.2 Findings and discussion 121.4 Conclusion 181.5 Bibliography 19Chapter 2 Integration of ISO 26000 International Standard by SMEs: Toward a Better Understanding of Risks 25Camille DE BOVIS and Sylvaine MERCURI CHAPUIS2.1 Introduction 252.2 When risk leads to reliability 272.3 Toward a better understanding of risks by actors: the role of ISO 26000 292.3.1 Risk-specific standards are not effective for SMEs 292.3.2 ISO 26000: reading grid for SMEs 342.4 Toward a better understanding of risks by responsible actors 382.5 Conclusion 392.6 Bibliography 41Chapter 3 Managing SMEs’ Economic Dependence Risks: in Favor of Disciplinary and Relational Governance 45Martine SEVILLE, Caroline CHAMPAGNE-DE-LABRIOLLE and Nathalie CLAVEAU3.1 Introduction 453.2 Structural approach to the economic dependence of SMEs and its implications in terms of risk management 473.2.1 An approach based on the asymmetry of initial powers and resources 473.2.2 A structural approach emphasizing the risk of abuse of economic dependence which is however difficult to characterize and whose management requires disciplinary governance of the relationship 483.2.3 Tools to manage the risk of abuse of economic dependence before any necessary disciplinary measures but with limitations 513.3 An approach to economic dependence by embeddedness: towards relational governance 523.3.1 From a structural approach to economic dependence relationships to an embeddedness approach 523.3.2 SME development challenges for embedding their economic dependence relationship with their partner 543.3.3 An embeddedness that is not without risk for SMEs and which must be managed by means of a suitable governance 563.4 Conclusion: the need for a systemic approach to economic dependence as well as a disciplinary and relational governance to manage the risks of this dependence 623.5 Bibliography 63Chapter 4 Reputation Risk: Anticipation and Management of Reputation Failure 65Laure AMBROISE and Isabelle PRIM-ALLAZ4.1 Introduction 654.2 Reputation, definition and challenges for SMEs 664.2.1 Reputation: definition 664.2.2 Reputation challenges for SMEs 694.3 Reputation risk for SMEs 724.3.1 Lack of reputation 724.3.2 Loss of reputation 734.4 Actions and tools to build and preserve reputation 744.4.1 Quality of offerings and expertise 744.4.2 The role of the quality of the relationship with different stakeholders 754.4.3 Enhance commitment in the city and territory 764.4.4 Managers’ image 784.5 Conclusion 784.6 Bibliography 79Part 2 Risk Management as a Lever for Organizational Development 85Chapter 5 Proactive Management of Operating Risks: A Lever to Improve External Funding for SMEs? 87Josée ST-PIERRE and Richard LACOURSIÈRE5.1 Introduction 875.2 Decisions for funding SMEs and risk measurement 885.2.1 Assessment of SMEs risk by funders 895.2.2 Risk measurement: financial and non-financial data 905.3 Risks, risk sources and risk control 915.3.1 Different risk sources 915.3.2 Risk management practices 925.4 Methodology 935.4.1 Presentation of sample 945.4.2 Identification of variables 945.4.3 Analysis tools 965.5 Presentation of results and discussion 965.5.1 Presentation of results 965.5.2 Analysis and discussion 995.6 Conclusion 1005.7 Appendices 1025.7.1 Typological analysis of group companies 1025.7.2 Implementation rates of practices in cluster 2 subgroups 1035.8 Bibliography 104Chapter 6 Risk Management: A Lever for Organizational Change for SMEs? 107Céline BÉRARD and Nathalie CLAVEAU6.1 Introduction 1076.2 From risk management to organizational change 1086.2.1 Organizational change: the forgotten link between risk management and performance? 1096.2.2 Organizational changes: how to qualify them 1106.3 Methodology 1126.3.1 Selection and presentation of cases 1126.3.2 Data collection and analysis 1136.4 Results and discussion 1146.4.1 Decision to adopt a risk management system: contexts and organizational changes induced 1146.4.2 Synthesis and discussion of results 1196.5 Conclusion 1226.6 Bibliography 123Chapter 7 Product Innovation in SMEs: Risk Identification Capacities 127Jacques BERTRAND and Josée ST-PIERRE7.1 Introduction 1277.2 Literature review and development of the analysis framework 1287.2.1 Risk management and SMEs 1287.2.2 Characteristics of SMEs and their ability to identify risks 1307.3 Methodology adopted 1347.3.1 Identification of sample 1347.3.2 Data collection and coding of variables 1347.4 Findings and discussion 1357.4.1 Presentation of results 1367.4.2 Discussion 1397.5 Conclusion 1417.6 Appendix: examples of verbatim and testimonials used to assign scores 1427.7 Bibliography 144Chapter 8 Counterfeiting Risk Management for SMEs and Industrial Subcontracting Activities: A Literature Review 149Manal EL BEKKARI, Catherine MERCIER-SUISSA, Céline BOUVERET-RIVAT and Lynda SAOUDI8.1 Introduction 1498.2 Literature review on industrial subcontracting and counterfeiting risk 1518.2.1 Industrial subcontracting 1518.2.2 Industrial Property Rights (IPR), strategic assets to be protected 1538.3 Counterfeiting and counterfeiting risk factors associated with industrial subcontracting 1558.4 Counterfeiting hedge strategies 1588.5 Conclusion 1618.6 Bibliography 163Part 3 Risk Perception and Management by the Manager-Entrepreneur 169Chapter 9 Entrepreneurial Risk-taking and the Mentoring of Entrepreneurs: the Danger of Cognitive Biases 171Saulo DUBARD BARBOSA and Luc DUQUENNE9.1 Introduction 1719.1.1 The entrepreneur: a risk taker? 1719.1.2 Two types of entrepreneurial risks: the risk of failure and the risk of missing an opportunity 1729.1.3 Venture creation support and mentoring 1739.1.4 Heuristics and cognitive biases 1749.2 Methodology 1759.3 Cognitive biases in action in the mentoring and support of entrepreneurs 1769.3.1 The phenomenon of substitution, the heuristics of representativeness and the law of small numbers 1769.3.2 Overconfidence, confirmatory bias and planning fallacy 1789.3.3 Availability 1809.4 Understanding cognitive biases from a risk management perspective 1829.4.1 Training of mentors 1829.4.2 Shared mentorship 1849.4.3 Going beyond the business plan 1859.5 Conclusion 1869.6 Bibliography 186Chapter 10 From Necessity to Vulnerable Entrepreneur 193Caroline BAYART and Séverine SALEILLES10.1 Introduction 19310.2 A different way of perceiving necessity entrepreneurs 19410.2.1 From the necessity entrepreneur to be motivated 19410.2.2 to the vulnerable entrepreneur to be secured 19610.3 Risk management, an ability to develop in vulnerable entrepreneurs 19810.3.1 Risk management challenges in entrepreneurship 19810.3.2 The issue of risk management in entrepreneurial support 19910.4 Supporting vulnerable entrepreneurs through proactive risk management practices: an exploratory study 20010.4.1 Presentation of study and respondents 20010.4.2 Multiple dimensions of vulnerability within the entrepreneurial context 20110.4.3 Supporting the implementation of risk mitigation strategies by vulnerable entrepreneurs 20310.5 Conclusion 20610.6 Bibliography 207Chapter 11 Entrepreneurial Approach in SMEs: Specificities, Vulnerabilities and Risks 211Lynda SAOUDI and Stéphane FOLIARD11.1 Introduction 21111.2 Re-entrepreneurship in SME: genealogy of the concept 21211.2.1 The specificities of SMEs 21311.2.2 Entrepreneurship in SME: contribution of the literature on large businesses 21311.3 Entrepreneurship in SMEs, a risky activity 21611.3.1 The vulnerability of traditional SMEs 21611.3.2 Risks associated with managers 21711.3.3 Risks associated with employees 21811.3.4 Management risks associated with information 21911.4 Anticipating and managing risks to develop SME entrepreneurship 22011.4.1 Developing the entrepreneurial agility of managers 22011.4.2 Developing the entrepreneurial agility of employees 22111.4.3 Developing organizational agility 22211.4.4 Developing relational agility 22411.5 Conclusion 22511.6 Bibliography 227Chapter 12 Perception Biases of Failure Risk among SME Managers 233Nathalie CLAVEAU, Muriel PEREZ and Thierry SERBOFF12.1 Introduction 23312.2 Literature review 23412.2.1 Failure process 23412.2.2 Perception of risk of failure and perception bias 23512.3 Research methodology 23712.3.1 Data from Observatoire “Prisma” (Prisma Observatory) 23712.3.2 Measurements of real and perceived risk 23812.3.3 Analysis variables 23812.4 Findings and discussion 23912.4.1 The existence of gaps between perceived and real risk 23912.4.2 Groups characterization 24012.4.3 Discussion 24112.5 Conclusion and managerial implications 24412.6 Appendix: List of selected variables 24512.7 Bibliography 247Conclusion 251Alain Charles MARTINETList of Authors 265Index 269