Effect of Risk Management Strategies on Financial Performance of Commercial and Services Firms Listed at Nairobi Security Exchange
Abstract
Due to liberalization, globalization and the rapid and advancement growth in technology
new business opportunities have been created and most of the industries are becoming
highly exposed to risks as compared to the past. The firms that embed sound risk
management strategies into their performance management strategies are having higher
chances for achievement of operational and strategic objectives. Consequently, the study
assessed the effect of strategies with respect to risk management on the success of the
banks which are under the NSE. The presented conceptual framework which was guided
by these theories: Capital asset pricing model theory, enterprise risk management theory
and contingency theory. Quantitative research approach was applied using primary data
for the sample period covered from 2016 to 2020. Analysis of the collected data was done
through panel random effect of regression model. The results from the study indicated
that assessment of risk as well as monitoring and evaluation have positive significant
effect on the output on banks within NSE. Whereas identification of risk has negative
effects on the productivity of these listed industries. The inquiry supports that
management should emphasize on risk reviews and monitoring of internal controls to
enhance risk-monitoring strategy. In addition, strict adherence to risk policies and
standard should be ensured to enhance financial performance of commercial and service
firms.
Publisher
University of Nairobi
Rights
Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
- School of Business [1311]
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