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Managers’ Perception and Attitude toward Financial Risks Associated with SMEs: Analytic Hierarchy Process Approach

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  • Mahmaod Alrawad

    (Quantitative Method, College of Business Administration, King Faisal University, Al Ahsa 31982, Saudi Arabia
    College of Business Administration and Economics, Al-Hussein Bin Talal University, Ma’an 71111, Jordan)

  • Abdalwali Lutfi

    (Department of Accounting, College of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia
    Applied Science Research Center, Applied Science Private University, Amman 11931, Jordan)

  • Mohammed Amin Almaiah

    (Department of Computer Networks, College of Computer Sciences and Information Technology, King Faisal University, Al-Ahsa 31982, Saudi Arabia
    Faculty of Information Technology, Applied Science Private University, Amman 11931, Jordan
    Department of Computer Science, King Abdullah the II IT School, The University of Jordan, Amman 11942, Jordan)

  • Adi Alsyouf

    (Department of Managing Health Services and Hospitals, Faculty of Business Rabigh, College of Business (COB), King Abdulaziz University, Jeddah 21991, Saudi Arabia)

  • Akif Lutfi Al-Khasawneh

    (Financial and Administrative Sciences Department, AL-Balqa’ Applied University, Irbid University College, Irbid 1293, Jordan)

  • Hussin Mostafa Arafa

    (Quantitative Method, College of Business Administration, King Faisal University, Al Ahsa 31982, Saudi Arabia
    Department of Statistics, Mathematics and Insurance Faculty of Commerce, Assiut University, Assiut 71515, Egypt)

  • Nazar Ali Ahmed

    (Quantitative Method, College of Business Administration, King Faisal University, Al Ahsa 31982, Saudi Arabia
    Insurance Department, Faculty of Commerce, Al-Neelain University, Khartoum 11121, Sudan)

  • Ahmad M. AboAlkhair

    (Quantitative Method, College of Business Administration, King Faisal University, Al Ahsa 31982, Saudi Arabia
    Department of Applied Statistics and Insurance, Mansoura University, Mansoura 35516, Egypt)

  • Magdy Tork

    (Department of Accounting, College of Business, King Faisal University, Al-Ahsa 31982, Saudi Arabia)

Abstract

This study aimed to identify financial and cash flow risks associated with SMEs and investigated how managers perceived these risks using the analytical hierarchical process (AHP). Accordingly, a three-level decision model was structured using two criteria, probability and consequences, and a list of six different types of risks as decision alternatives. Data were collected by a survey questionnaire from SME managers/owners and analyzed in accordance with the AHP method. The results show that the priority weight for risk criteria was 52% for probability and 48% for consequences. Further, with an average weight of 18.8%, the risk of an increase in bank charges ranked as the highest type of risk faced by SMEs. However, the risk of low or no profits was ranked as the lowest with an average weight of 13.4%. This study is one of the few, if not the first, to investigate SME managers’ perceptions using an AHP method and to provide insightful information on how SME managers/owners perceived various financial and cash flow risks. The study results may support the use of the AHP method in understanding managers’ perceptions and attitudes toward various types of risks associated with SMEs.

Suggested Citation

  • Mahmaod Alrawad & Abdalwali Lutfi & Mohammed Amin Almaiah & Adi Alsyouf & Akif Lutfi Al-Khasawneh & Hussin Mostafa Arafa & Nazar Ali Ahmed & Ahmad M. AboAlkhair & Magdy Tork, 2023. "Managers’ Perception and Attitude toward Financial Risks Associated with SMEs: Analytic Hierarchy Process Approach," JRFM, MDPI, vol. 16(2), pages 1-12, February.
    • Handle: RePEc:gam:jjrfmx:v:16:y:2023:i:2:p:86-:d:1054112
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    References listed on IDEAS

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    2. Thomas L. Saaty, 2006. "The Analytic Network Process," International Series in Operations Research & Management Science, in: Decision Making with the Analytic Network Process, chapter 0, pages 1-26, Springer.
    3. Saaty, Thomas L., 2003. "Decision-making with the AHP: Why is the principal eigenvector necessary," European Journal of Operational Research, Elsevier, vol. 145(1), pages 85-91, February.
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    Cited by:

    1. Abdalwali Lutfi & Hamza Alqudah, 2023. "The Influence of Technological Factors on the Computer-Assisted Audit Tools and Techniques Usage during COVID-19," Sustainability, MDPI, vol. 15(9), pages 1-22, May.
    2. Mahmaod Alrawad & Abdalwali Lutfi & Mohammed Amin Almaiah & Adi Alsyouf & Hussin Mostafa Arafa & Yasser Soliman & Ibrahim A. Elshaer, 2023. "A Novel Framework of Public Risk Assessment Using an Integrated Approach Based on AHP and Psychometric Paradigm," Sustainability, MDPI, vol. 15(13), pages 1-17, June.
    3. Tayseer Alkdour & Mohammed Amin Almaiah & Rima Shishakly & Abdalwali Lutfi & Mahmoud Alrawad, 2023. "Exploring the Success Factors of Smart City Adoption via Structural Equation Modeling," Sustainability, MDPI, vol. 15(22), pages 1-19, November.

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