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

Abstract

As a family business, SC Johnson Company faces stiff competition from other companies. For a period of 6 years from 2013 to 2019, the company recorded a 10.64% revenue reduction from 11.75 billion to 10.5 billion. The reduction in revenue is an indicator that the company needs to adopt better enterprise resource management strategies that can address all of the risks in the market. This study aimed at establishing enterprise risk management’s effect on SC Johnson and Son Kenya Limited’s organization performance. The specific study objectives were: to establish the effect of risk control self-assessment, identification of risk indicators, incident management and internal and external regulations compliance on organization performance of SC Johnson and Son Kenya Limited. The study was guided by 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 327 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 findings were presented using tables and graphs. The study established that performance of SC Johnson and Son Kenya Limited was positively and significantly affected by the internal and external regulations compliance, incident management, risk indicators identification and risk control self-assessment. The study concluded that risk control self-assessment in the organization rely majorly on experience, judgement and perception, identifying risk helps in doing full risk analysis and addressing it, that the management of risk is critical to the success of the activities carried out within the organization and it is the risk management’s task to handle a task exposure to risk and that compliance of internal and external regulations is an iterative process using deliverable status and progress status reports to keep track of progress. The study recommended that the management of the company should define the likelihood of risk occurrence, its effect to evaluate the risk response preparation urgency and determine levels of reporting, the organization aims at improving activities of risk management on every significant risk, it ought to increase the level of risk recognition; the response to a particular risk to reflect the risk type, assessment in terms of criticality, impact and Likelihood so on and the organization’s attitude to risk; and, in order to comply with internal and external regulations, the management should manage the risk.