TITLE:
Calculated Risk-Taking Orientation and Performance of Kenyan SMES: The Mediating Role of Risk Management Capability
AUTHORS:
Solomon Ndunda Kitundu
KEYWORDS:
Calculated Risk-Taking Orientation, Risk Management Capability, SME Performance, Systematic Review, Mediation, Kenya
JOURNAL NAME:
Open Journal of Business and Management,
Vol.14 No.6,
November
2,
2026
ABSTRACT: Small and medium enterprises (SMEs) are widely regarded as the engine of employment and inclusive growth in Kenya, yet the sector continues to record high rates of stagnation and premature exit. Entrepreneurship scholarship attributes part of this fragility to the strategic posture with which owner-managers approach uncertainty, and to the organizational capacity that stands behind that posture. This paper is a systematic review and narrative synthesis of the empirical and theoretical literature on the relationship between calculated risk-taking orientation (CRTO), risk management capability (RMC), and small and medium enterprise (SME) performance, with particular attention to the mediating role that risk management capability plays in that relationship. Grounded in the resource-based view, dynamic capabilities theory, and the entrepreneurial orientation literature, and following a structured search of Scopus, Google Scholar, and institutional-repository-indexed sources published between 1983 and 2026, the review synthesizes evidence from fifteen sources: twelve summarized in a structured evidence table (eight primary empirical studies, one cross-cultural meta-analysis, two systematic/desktop reviews, and one foundational conceptual work) plus three additional foundational theoretical works, spanning Kenya, wider Sub-Saharan Africa, Europe, and Southeast Asia. The synthesis finds consistent, if methodologically heterogeneous, support for a positive risk-taking-performance association, but shows that this association is increasingly reported in the recent literature as conditional on, or transmitted through, an intervening risk management or innovation-related capability rather than operating as an unconditional direct effect. Kenyan evidence specifically is found to be comparatively rich on the entrepreneurial-orientation side but thin on the explicit mediating role of risk management capability, dominated by single-period, single-informant survey designs of uniformly high common-method risk. The review concludes that this is the principal gap in the Kenyan SME literature, proposes a conceptual model and testable hypotheses to address it, and outlines a panel/secondary-data research design, with explicit construct indicators and a stated time lag, through which the model could subsequently be tested empirically.