The Role of Risk Management in Achieving Competitive Success in Handloom Textile Enterprises

Risk Management, Risk Identification, Risk Assessment, Risk Mitigation, Sustained Competitive Advantage, Firm Performance, Environmental Uncertainty, PLS-SEM.

The capacity of firms to manage risk effectively is a critical key for competitive positioning and long-term organizational outcomes in volatile and uncertain business environments. Yet, through which risk management capabilities translate into Firm performance remain insufficiently theorized and empirically examined, particularly with respect to the boundary conditions imposed by environmental uncertainty. This study investigates the influence of risk management capabilities that are risk identification, risk assessment and risk mitigation on the firm performance with sustained competitive advantage serving as the mediation and environmental uncertainty as a moderating variable on handloom textile enterprises. Drawing on the Resource-Based View and Dynamic Capabilities Theory, a quantitative survey was conducted, yielding a usable sample of 162 respondents. Data were analysed using Partial Least Squares Structural Equation Modelling (PLS-SEM) via SmartPLS 4. The measurement model demonstrated excellent reliability and discriminant validity criterion. Structural model results revealed that risk management capabilities significantly predict sustained competitive advantage which in turn strongly predicts firm performance.