Effect of integrated risk management on financial performance of commercial parastatals in Kenya moderated by risk maturity
Date
2025
Authors
Wangombe, A. W.
Journal Title
Journal ISSN
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Publisher
Strathmore University
Abstract
This study investigated how integrated risk management (IRM) affects the financial performance of Kenyan commercial parastatals and moderating role of risk maturity. Commercial Parastatals in Kenya contribute to the economic development of the country, through their contributions in various sectors such as Transport, Agriculture, Energy and public services. However, these organizations face several challenges which threaten their performance and sustainability. While risk management practices, such as risk1 identification, analysis, and mitigation, are known to impact financial outcomes in various sectors, the application of IRM within Kenyan parastatals remains underexplored. The objectives of the study were to assess the influence of risk identification, risk analysis and risk mitigation on financial performance of commercial parastatals in Kenya and to establish the moderating influence of risk maturity level on the association between IRM and the financial performance of commercial parastatals in Kenya. The study was based on Resource based view (RBV) and contingency theory and adopted a descriptive correlation research design. The target population for this study consists of all the 30 commercial state parastatals in Kenya with a total of 1813 employees. A purposive sampling technique was employed for senior management to ensure that key decision-makers with relevant expertise are represented. For each of the 30 commercial parastatals, three purposive respondents were selected from senior management thus a sample size of 90. Structured questionnaires and a data collection sheet were used in data collection. Data collected was analysed using descriptive and inferential statistics. The study found that risk identification and risk analysis have a positive and statistically significant impact on financial performance of commercial parastatals in Kenya. Risk Mitigation was also statistically significant thus a key driver of financial performance in commercial parastatals in Kenya. The study confirms that risk maturity is a significant moderator in the relationship between integrated risk management and financial success in commercial parastatals. The study recommends that the commercial parastatals should implement structured mechanisms for employee input, such as anonymous suggestion systems and regular feedback forums. They should institutionalize risk analysis frameworks such as scenario analysis and quantitative scoring across all departments. Management of the commercial parastatals should conduct regular internal audits to assess adherence to mitigation strategies and effectiveness of control measures. Parastatals should also implement targeted capacity-building programs.
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Full - text thesis
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Citation
Wangombe, A. W. (2025). Effect of integrated risk management on financial performance of commercial parastatals in Kenya moderated by risk maturity [Strathmore University]. http://hdl.handle.net/11071/15751