Consequences of Risk Management on the performance of a Company: the evidence of Kuapa Kokoo Limited (KKL)

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Risk management is an area of paramount importance to an organization. Because every company is exposed to risks, effective risk management is necessary for the progression of a business entity. In spite of the well structured process in managing risk exposures at Kuapa Kokoo Limited (KKL), the company still faces the problem of embezzlement, stealing, theft, inaccurate and unreliable information provided by officials on the field. The general objective of the study is to review the consequences of risk management on the performance of companies. The specific objectives included: to review the risk management processes, practices and policy of the company; to understand the level of awareness of staff of risk management practices of the company; to review the measures adopted to minimise losses through good risk management processes. Related literature was reviewed. The study adopted the cross- sectional research design. The study population was staff of KKL. A sample size of thirty three respondents was used for the study. The purposive sampling technique was adopted. Data was collected through interview and questionnaire. The data collected were analyzed using tables and findings were made as a result of that. Some of the findings made included: The company has clear objectives and these have been communicated so as to provide effective direction to employees on risk management and control issues. The management appropriately evaluates risk when planning for new product or activity. There exist processes for independent verification of transaction of officers. The Akuafo Cheque System of payment is not used by District officers and Purchasing Clerks as required by government. Farmers prefer payment through the cash system to that of the cheque system and purchasing clerks are forced to pay them by cash because of competition. Recommendations were also made which included: The government/policy makers should insist that the Akuafo Cheque System of payment should be the only mode of paying farmers and any official of the company who breaches such directives should be severely punished. Officials of the company should not be allowed to transport cash from the urban centres or district capitals to the farmers in villages.
A Thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfilment of the requirements for the degree of Commonwealth Executive Masters in Business Administration, June 2011