The influence of enterprise risk management on strategic management process of Kenya Power And Lighting Company Limited
Cheruiyot, Charles K.
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In the present day business context, all business entities need to prepare themselves to cope with crises unlike in an ideal world where managers would identify all possible threats that could happen to them and thus develop a contingency plan for each of these sources of crisis. Therefore, the capability of an organization to flourish in the face of risks that either bring forth opportunities or threats is a major sign of its ability to maintain competitive advantage. This study sought to determine the influence of enterprise risk management on the strategic management process at Kenya Power and also establish the challenges faced by the organization in managing enterprise risk. The study adopted a case study research design whereby the the data collection tool was an interview guide. Content analysis was used to analyze the qualitative primary data which had been collected by conducting interviews and secondary information from the organization. The findings from the study were that the risks facing the organization broadly include Legal/regulatory/contractual risks, Engineering/technical/ICT, Operational/management, Natural/environmental, Safety/security/health and political risks. The dependence of the company on hydro power and government interference on policy issues were operational risks facing the organization as well. The enterprise risk management process of an organization was found to be affected by a number of factors and these factors included mandate from the top, determination and assessment of risk process, operation of the control framework,the periodic reporting and analysis process of the firm. The top management of an organization was found to play an important role in the risk management process of the firm since they will be expected to incorporate the risk assessment process in the overall strategy of the firm as well as make it part and parcel of any decision being made in the organization. The study recommended that the board of directors and management should have a reasonable assurance that they understand to what extent the entity’s strategic objectives are being met or affected, ensure that operations objectives are met, that the entity’s reporting is reliable and that all applicable laws and regulations are being complied with.