The Effect of enterprise risk management practices on the organizational performance of non-financial firms listed on the Nairobi Securities Exchange: the moderating role of firm characteristics

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dc.contributor.authorRobert, H. M.
dc.date.accessioned2024-07-22T09:26:05Z
dc.date.available2024-07-22T09:26:05Z
dc.date.issued2024
dc.descriptionFull - text thesis
dc.description.abstractIn the context of the dynamic corporate environment, where successful economic performance and value creation are paramount objectives, this study investigated the effect of ERM practices on the organizational performance of listed non-financial firms in the NSE, with an exploration of how firm characteristics moderate this relationship. Through a mixed-method approach using both primary and secondary data sources, the study aimed to establish the relationship between ERM practices (risk culture, risk identification and governance, risk assessment mitigation, and control) and organizational performance, determine the impact of firm characteristics on this relationship, and explore management perceptions regarding the relationship between ERM practices and organizational performance. Secondary data was collected from the financial statements of all the 39 listed non-financial firms. Primary data was collected through the issue of questionnaires to 114 CEOs, CFOs and CROs. Objective one entailed the analysis of data using descriptive statistics and Structural Equation Modeling (SEM) in the R statistical programming language to unveil structural linkages. The structural model assessment revealed a significant (p < 0.05) relationship between ERM and its eight components, except for objective setting and information & communication (p > 0.05). Furthermore, a positive correlation was identified between ERM and organizational performance. The correlation matrix indicated that all eight ERM components exhibited a positive correlation with organizational performance. For objective two, a multiple regression analysis determined a direct impact of ERM practices on organizational performance. Additionally, the analysis indicated a positive influence of firm characteristics on organizational performance, albeit statistically insignificant. For objective three, the management concurred with the regression analysis, acknowledging the impact of ERM practices on organizational performance. They perceived a risk-focused culture as a primary motivator for ERM adoption, with unsupportive cultures identified as barriers. One key limitation of the study was the use of composite score to measure organizational performance. Future research could benefit from examining the direct impact of ERM practices on the four perspectives of the Balanced Scorecard (BSC): Financial, Customer, Internal Business Processes, and Learning & Growth. Overall, the study enhances understanding of how ERM practices contributes to improved organizational performance and informs future research directions in this area.
dc.identifier.citationRobert, H. M. (2024). The Effect of enterprise risk management practices on the organizational performance of non-financial firms listed on the Nairobi Securities Exchange: The moderating role of firm characteristics [Strathmore University]. http://hdl.handle.net/11071/15496
dc.identifier.urihttp://hdl.handle.net/11071/15496
dc.language.isoen
dc.publisherStrathmore University
dc.titleThe Effect of enterprise risk management practices on the organizational performance of non-financial firms listed on the Nairobi Securities Exchange: the moderating role of firm characteristics
dc.typeThesis
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