This article analyses enterprise risk management (ERM) in small and medium-sized enterprises (SMEs) by developing a structural model based on a survey questionnaire. Preconditions for ERM implementation, applied ERM approaches and their effects on strategic orientation are derived. The results suggest that SMEs follow either an active or a passive ERM approach, which affects their strategic orientation; a passive approach results in a defensive strategy and an active approach, an offensive strategy. Firm size, sector affiliation and ownership structure influence the implementation of ERM. The applied conceptualization of ERM may help SMEs adjust to a changing environment to gain strategic advantage thus, increasing competitiveness and business success.
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