Risk Management in Latin American SMEs: A Proposal Based on Academic work run in Colombia, Mexico, and Peru

Small and medium-sized enterprises (SMEs) play an important role in the economy, particularly in developing countries such as those in Latin America, as they contribute between 25% and 40% of the national GDP and generate 60% to 70% of total employment. Nevertheless, they are highly vulnerable, as reflected in their survival time, which often depends on prevailing economic conditions. This study is the result of a collaborative project between professors of Industrial and Production Engineering from universities in Peru, Colombia, and Mexico. The researchers aimed to analyze selected Latin American SMEs to explore how they manage risk and exposure. The research was conducted with the participation of undergraduate students. The methodology, following an inductive approach, included the design of the research project, implementation in collaboration with students and SMEs, qualitative data analysis, and a comparison and classification phase to generate general conclusions. Three categories of risk were defined: internal, external, and meso-level, to identify decision-making processes that contribute to risk exposure. A total of 16 companies were interviewed from different sectors: 44% manufacturing, 38% commercial, and 19% services. The results show that external risks (56%) are mainly related to inbound and outbound logistics and natural phenomena, particularly in the industrial sector. Internal risks predominantly affect the industrial sector (43%) and are linked to operations and management. For meso-level risks, commercial companies were the most vulnerable, with 52% related to administrative and information management issues.