Risk Management Practice and Organizational Performance: The Mediating Role of Business Model Innovation

Abstract

Purpose: This paper examines the effect of risk management practices on organizational performance and the mediating role of business model innovation in Nigeria.
 
 Design/Methodology/Approach: This research uses quantitative research methods. The paper uses a sample of 83 employees, with data collected through an online questionnaire using a Likert scale using a scale of 5, and the data was analyzed using partial least square structural equation modeling (PLS-SEM). The stages of data analysis begin with testing the validity and reliability of the instrument, determination and finally testing the hypothesis.
 
 Findings: The results showed that practices for risk management and financial performance had a direct and large effect on financial performance. Furthermore, risk management practices are linked to non-financial performance. The result shows that business model innovation has a negative relationship with non-financial performance. It has a positive impact by meaningfully strengthening financial relationships; a partial mediating result was revealed for the relationship between risk management practices and non-financial behaviors.
 
 Practical implications: The results of this research can be used by government agencies and financial institutions to better comprehend the connection between BMI, risk management, and performance. Academics can use it to validate existing hypotheses and discover new ones.
 
 Original/Value: This research adds to the body of knowledge in the field of model development by illustrating the impact of risk management strategies and the mediating effect of business model innovation. In the Nigerian context, a lack of this might lead to inefficiencies in attaining organizational performance.