Enterprise Risk Management and Organizational Performance of Sc Johnson and Son Kenya Limited

Abstract

Manufacturing companies in Kenya faces stiff competition from both domestic and global peers with implications on their overall financial performance. A focus on enterprise risk management could play a critical role in differentiating performance of companies across various segments with those adopting the approach expected to perform better than their peers. This would be reflected in the level and growth of a company’s revenue. This study, therefore, sought to establish the effect of enterprise risk management on organizational performance by focusing on SC Johnson and Son Kenya Limited. Specifically, the study sought to establish the effect of risk control self-assessment, identification of risk indicators, incident management and internal and external regulations compliance on performance of SC Johnson and Son Kenya Limited. The study was anchored on three theories: agency theory, resource-based view theory and risk management theory. A descriptive cross-sectional research design was adopted for the study. The target population of the study was 72 staff members. Descriptive and inferential statistics was used for the analysis of the collected data. Inferential statistics included, regression modeling and t-test was included in the inferential statistics. The study found that aspects of enterprise risk management such as internal and external regulations compliance, incident management, risk indicators identification and risk control self-assessment positively and significantly affected organizational performance. The study concluded that enterprise risk management plays a pivotal role in boosting organizational performance. The study recommended that organizations should define the likelihood of risk occurrence, evaluate its potential effect, prepare an appropriate remedial response, determine levels of reporting, increase the level of risk recognition; and, ensure compliance with internal and external regulations.