Navigating uncertainties: a tri-factorial evaluation of risk management adoption in MSMEs

Figures & data

Figure 1. Conceptual Framework.

Source: Own.

Table 1. Results of the PLS algorithm in evaluating the adoption of risk identification.

Item	Outer loading	CA	CR	AVE
Relative advantage (RA)		0.835	0.890	0.671
RA1	0.864
RA2	0.826
RA3	0.843
RA4	0.738
Complexity (COMX)		0.838	0.905	0.764
COMX1	0.944
COMX2	0.707
COMX3	0.949
Security (SECU)		0.855	0.902	0.699
SECU1	0.766
SECU2	0.893
SECU3	0.899
SECU4	0.776
Organizational readiness (OR)		0.809	0.875	0.637
OR1	0.745
OR2	0.755
OR3	0.896
OR4	0.786
Competitive pressure (CP)		0.774	0.869	0.690
CP1	0.768
CP2	0.830
CP3	0.890
Adoption of risk identification (ARI)		0.841	0.903	0.757
ARI1	0.911
ARI2	0.904
ARI3	0.789

Source: Author’s calculation with SEM-PLS.

Table 2. Fornell-Lercker adoption of risk identification.

	RA	COMX	SECU	OR	CP	ARI
RA	0.819
COMX	0.122	0.874
SECU	0.527	0.101	0.836
OR	0.509	0.146	0.565	0.798
CP	0.442	0.195	0.520	0.407	0.831
ARI	0.668	0.189	0.594	0.431	0.449	0.870

Source: Author’s calculation with SEM-PLS.

Table 3. Cross-loading adoption of risk identification.

	RA	COMX	SECU	OR	CP	ARI
RA1	0.864	0.102	0.441	0.355	0.379	0.610
RA2	0.826	0.043	0.385	0.474	0.315	0.519
RA3	0.843	0.106	0.420	0.480	0.379	0.527
RA4	0.738	0.149	0.480	0.369	0.374	0.524
COMX1	0.112	0.944	0.091	0.170	0.199	0.195
COMX2	0.099	0.707	0.050	0.060	0.112	0.136
COMX3	0.110	0.949	0.119	0.136	0.191	0.156
SECU1	0.342	0.164	0.766	0.422	0.484	0.470
SECU2	0.450	0.160	0.893	0.531	0.491	0.516
SECU3	0.557	0.076	0.899	0.500	0.462	0.586
SECU4	0.387	−0.100	0.776	0.428	0.271	0.384
OR1	0.426	0.001	0.510	0.745	0.376	0.395
OR2	0.372	0.191	0.426	0.755	0.297	0.268
OR3	0.426	0.197	0.447	0.896	0.333	0.347
OR4	0.385	0.109	0.402	0.786	0.276	0.340
CP1	0.434	0.101	0.341	0.344	0.768	0.340
CP2	0.308	0.287	0.401	0.255	0.830	0.342
CP3	0.365	0.112	0.534	0.403	0.890	0.427
ARI1	0.704	0.197	0.613	0.473	0.420	0.911
ARI2	0.577	0.139	0.489	0.330	0.424	0.904
ARI3	0.413	0.151	0.419	0.292	0.313	0.789

Source: Author’s calculation with SEM-PLS.

Table 4. Heterotrait-Monotrait ratio (HTMT) adoption of risk identification.

	RA	COMX	SECU	OR	CP
COMX	0.147
SECU	0.616	0.190
OR	0.619	0.188	0.671
CP	0.553	0.246	0.619	0.502
ARI	0.772	0.219	0.678	0.499	0.544

Source: Author’s calculation with SEM-PLS.

Table 5. Evaluation of Q² and R².

	Q² predict	PLS-SEM_RMSE	LM_RMSE	R²	Decision
ARI				0.543	Moderate
ARI1	0.521	0.491	0.546		Moderate
ARI2	0.330	0.595	0.652		Moderate
ARI3	0.171	0.631	0.739		Moderate

Source: Author’s calculation with SEM-PLS.

Table 6. Hypothesis result.

Hypothesis		Path	P-values	Decision
H1	RA -> ARI	0.439	0.000	Accepted
H2	COMX -> ARI	0.098	0.059	Accepted
H3	SECU -> ARI	0.316	0.001	Accepted
H4	OR -> ARI	−0.039	0.337	Rejected
H5	CP -> ARI	0.055	0.235	Rejected

Source: Author’s calculation with SEM-PLS.

Table

Variable	Item	Measurements	Source
Adoption of risk identification (ARI)	ARI1	My business will conduct the identification of risk management.	Tu (2018)
	ARI2	My efforts will be to identify risks consistently.
	ARI3	I would recommend the use of risk management to others.
Relative advantage (RA)	RA1	By identifying risks, my business can better manage operational activities.	Agrawal (2015)
	RA2	By identifying risks, it is possible to utilize the remaining production waste.
	RA3	By identifying risks, my business can compete with competitors.
	RA4	By identifying risks, it allows my business to deliver goods on time.
Complexity (COMX)	COMX1	I did not find it difficult to identify risks to my business	Lai et al. (2018)
	COMX2	I did not find it difficult to identify risks in my business
	COMX3	I did not find it difficult to understand and apply risk identification to my business
Security (SECU)	SECU1	My business requires the implementation of risk identification that focusses on the security of my business data.	Salleh and Janczewski (2016)
	SECU2	My business requires the implementation of risk identification to manage my business financial information.
	SECU3	My business requires the application of risk identification for the management of raw materials for my business.
	SECU4	By implementing risk identification, I can map risks that can improve the security of my business.
Organizational readiness (OR)	OR1	The lack of business capital can hinder my business because I do not apply risk identification to my business.	Chen et al. (2015)
	OR2	The lack of information technology can hinder my business because I do not implement risk identification.
	OR3	Lack of risk identification skills can hinder my efforts.
	OR4	The lack of skills in resources can hinder my efforts by not implementing risk identification.
Competitive Pressure (CP)	CP1	My business applies risk identification because I see many competitors in this industry.	Lai et al. (2018)
	CP2	Many competitors apply risk identification so that my business is threatened with closure because my business does not apply risk identification.
	CP3	My business applies risk identification to determine the advantages of competitors

Source: Adoption from TOE framework.

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Data availability statement

The datasets generated and/or analyzed during the current study are not publicly available due to ethical and privacy concern. However, they are available from the corresponding author on reasonable request. The data supporting the findings of this study are contained within the manuscript. Further detailed data or materials related to this research may be requested from the corresponding author, I Gusti Ketut Agung Ulupui. Requests for access to these data will be considered by the author team, and data will be shared in a manner that adheres to ethical standards and respects confidentiality and privacy obligations. In cases where data cannot be shared openly due to ethical or privacy concerns, the authors commit to retaining the data and making them available upon reasonable request, subject to necessary approvals and conditions.