Understanding the impact of external risk factors on business performance: a comprehensive analysis

Abstract

Purpose-The purpose of this paper is to analyze the impact of various external risk factors on companies operating in the technology sector. By understanding these impacts, companies can better prepare and adapt their strategies to mitigate potential negative impacts and take advantage of emerging opportunities. Design/methodology/approach-In the research, the evaluation of non-business risk factors was made with the F-DEMATEL method. While carrying out these procedures, 10 expert opinions were taken. Experts work in companies operating in the technology sector. All of them have university education or above. A total of 4 participants are female and 6 participants are male. The oldest participant is 57 years old and the youngest is 34 years old. When looking at the time spent working in the sector, the most senior expert said that he has been in the sector for 33 years. The participant with the least seniority has been working in the sector as a manager for 4 years. Findings-The analysis reveals many notable findings regarding the impact of external risk factors on technology companies. In particular, the fact that changes in demand conditions emerge as the second most effective factor underlines the importance of market dynamics in shaping company performance. Additionally, the country's political situation and changing competitive conditions have been identified as important determinants of risk exposure, highlighting the interconnection between macro-level factors and company-level outcomes. Additionally, natural risks and sudden changes in input prices are highlighted as persistent threats, necessitating proactive risk management measures to mitigate possible disruptions. Research limitations/implications-Despite its contributions, this study has some limitations that should be considered. First, the findings are based on expert opinions in the technology sector and may not fully reflect the diversity of risk perceptions across different industries or regions. Future research may therefore benefit from including a larger sample of companies or using quantitative methodologies to validate the findings. Practical implications-Companies that are aware of external risk factors can proactively develop risk management strategies to minimize risk exposure and protect their operations. For example, strategies such as diversifying foreign exchange risk, closely monitoring market demand trends and investing in disaster preparedness measures can help mitigate the negative consequences of external risks. Additionally, understanding the relative importance of risk factors should be taken into account by companies in effectively prioritizing their resource allocation and decision-making efforts. Originality/value-In particular, the research adds original insights to existing knowledge by empirically examining the relative importance of external risk factors within the technology sector. Synthesizing the perspectives of industry experts, the research provides a nuanced understanding of the multifaceted risks facing technology companies and offers practical implications for strategic decision-making. Hierarchical ranking of risk factors adds value by guiding companies to prioritize risk mitigation efforts and allocate resources effectively, thereby increasing corporate resilience and long-term sustainability.