Thriving amid Uncertainty: How Enterprise Risk Management Shapes the Confluence of Business Strategy and Financial Performance of Micro, Small and medium enterprises in Ghana Obed Kwabina Opoku Nkansa (a) Alfira Sofia(b)
Universitas Pendidikan Indonesia
Abstract
The paper research examines the moderating role of enterprise risk management on the effect of business strategy on the financial performance of micro, small and medium-sized enterprises in Ghana. The study utilised a quantitative research design, wherein survey data was gathered from a sample of 356 micro, small and medium-sized enterprises. The research examined the effects of implementing a differentiation strategy, cost leadership strategy, and product/service diversification on the financial performance of an organisation. Furthermore, the study investigated the moderating influence of enterprise risk management on these associations. The findings established that the implementation of a differentiation strategy and diversification of products or services can lead to a positive effect on financial performance. Conversely, the adoption of a cost leadership strategy may have an adverse impact. Furthermore, the research illustrates that the proficient execution of enterprise risk management practices amplifies fiscal efficacy and functions as a mediator in the correlation between corporate strategy and financial performance. The implications of these findings are significant for managers of micro, small and medium-sized enterprises, policymakers, and researchers. Specifically, the findings underscore the importance of strategic decision-making and risk management as key factors in achieving financial success.
Keywords: Enterprise risk management, business strategy, financial performance, micro, small and medium enterprises
