Risk Management and Organizational Performance: A Study of Selected Plastic Manufacturing Firms in Anambra State, Nigeria

Abstract

This work examined effect of risk management on the performance of plastic manufacturing firms in Anambra State, Nigeria, Nigeria. The aim of the study was to investigate the effect of market risk management, credit risk management, operational risk management and interest rate risk management on organizational performance. Relevant conceptual literature, theoretical exposition, theoretical framework and empirical literature were review. The theoretical framework was anchored on Agency theory. Survey research design was adopted. The population of study 2800 employees’ owners of the selected manufacturing firms. Sample size of 350 respondents was selected for the study using Taro Yamane (1964) formular. The data generated were analyzed using descriptive statistics, and multiple regression analysis. The study found that market risk management has a positive significant effect on performance of plastic manufacturing firms. The study discover that credit risk management has a negative significant effect on performance of plastic manufacturing firms and operational risk management has positive significant effect on plastic manufacturing firms in Anambra State, Nigeria. Finally, the reveals that interest rate risk management has a negative significant influence on plastic manufacturing firms in Anambra State, Nigeria. From the analysis the study concludes that market risk and operational risk management has positive significant effect on performance of plastic manufacturing while interest rate risk management and Credit risk management has a negative significant effect on organizational performance. The study therefore, recommends that management of the organizations should put in place the required structures that will promote a good marketing risk and put controls on organizational performance during operations as this will enhance the growth in terms of profitability of market shares. Organization should take the issue of credit monitoring and review seriously and this should be performed by higher officers. The purpose of credit review should be to provide appropriate checks and balances to ensure that credits are made in accordance with bank policy and to provide an independent judgment of asset quality, uninfluenced by relationships with the borrower. Management every organizations should put a lot of emphasis on operational risk variables that yield to organizational performance to improving the performance of the organizations. And in a situations where the bank cannot mitigate the risk, the organizations should protect itself through insurance cover and finally the study recommends that organization should have alternative which will help address the shortfalls in this accounting approach of evaluating interest rate risk will be one which focuses on estimating the interest rate sensitivity of the economic value of a bank's on- and off-balance-sheet positions.