Managing operational risks in small or medium enterprises (SMEs) in Sri Lankan service sector

Abstract

Purpose The purpose of this study was to identify the types of operational risks associated in service sector SMEs in Sri Lanka and how their effects on organisational performances could be successfully managed. The motivation for conducting this study originates from the growing recognition that the ability to effectively manage operational risks directly impacts the sustainability and performances of SMEs in the Sri Lankan service sector.

Design/methodology/approach A qualitative research approach was used to carry out this study by adopting a case-study research strategy. The required empirical data were gathered from four service sector SMEs in Sri Lanka by using semi-structured interviews and a document review. These cases operate with similar nature of the business being executed. A manual deductive thematic analysis, following Braun and Clarke’s six-phase framework, was used for data analysis.

Findings The study highlighted 15 types of operational risks associated in service sector SMEs in Sri Lanka, as well as the sources and effects of those operational risks towards business performances. The study also proposed proactive strategies to manage operational risks associated in service sector SMEs in Sri Lanka.

Originality/value This study examines operational risk management in Sri Lankan service sector SMEs, highlighting its critical impact on sustainability and performance due to limited research in the local context. Existing study provides a detailed analysis of the nature, sources and effects of operational risks in service sector SMEs and by proposing proactive strategies for their effective management. The originality of the research is formed from its contextual focus on Sri Lankan service sector SMEs and its contributions to developing practical, risk-based management approaches designed to address the challenges faced by Sri Lankan service sector SMEs of the economy.