Effect Of Non-Financial Risk On Organisational Performance (A Case Study Of Human Right Policy Of Springlight Technology Limited)
Effect Of Non-Financial Risk On Organisational Performance (A Case Study Of Human Right Policy Of Springlight Technology Limited)
Abstract
The advancements in options pricing research along with improvements in computer technology laid the groundwork for new portfolio management techniques. Balvinder (1995), further said the increasing globalization of commerce is exposing firms to various financial risks, unrelated to their lines of business. Some of these risks are firm or situation specific with no readymade exchange traded instruments to offset such risks. The management of these risks has created a new line of financial derivatives, the over-the-counter (OTC) derivatives. These derivatives are privately negotiated arrangements between parties that permit either one or all parties to obtain their desired financial flows. Kenya being one of the leading emerging markets and a player in the global market is faced with systemic risk which results from market linkages. Balvinder (2005) imply that shocks arising in one market may be transmitted to other market as well. Kenya still lags behind in development of a well-functioning regulated financial derivatives market. The commonly used derivatives instruments by Kenyan companies are the forward contracts and swaps. Companies use forward contracts to hedge against their imports and exports while swaps are used when making arrangements to exchange cash flows over time. Howton and Perfect (1998) argues that currency swaps and interest rate swaps are commonly used by financial institutions for an agreement providing exchange payments denominated in one currency for payments in another currency over a period of time.
Chapter One
Introduction
1.1 Background of the Study
The evaluation of risk also always been associated with financial risk. Hence, the focus of many organization has always been on the determination of financial risk with little or no consideration for Non-Financial Risk. However, the development of the internet and the social media has resulted in the quick spread of information whether such information were verified or not. Hence, many firms are focusing attention on building their reputation through a closer monitoring and supervision of the activities of the various unit of their organization. Non –financial risk is associated with the risk of compliance failures, misconduct, technology, or operational challenges (Jon Hrovat 2018). It exacts great consequences on the firm and often results in huge financial losses as a results of expenses made on litigation, compensation claims, and operational mishaps. The neglect of non-financial risk also leads to reputational loss at a time when customers, shareholders, and public stakeholders are more receptive of organizational performance. The study seeks to appraise the effect of non- financial risk on organizational performance. A case study of Human right policy of spring light technology limited.
1.2 Statement of the Problem
The consequences associated with Non – consideration of risk are generally very devastating resulting in huge financial loss as a result of expenses on Litigation, compensation claims, and operational mishaps. It also results in the loss of good will especially for firms which have built good reputation over the years. The problem confronting the study is to appraise the effect of non- financial risk on organizational performance. A case study of Human right policy of Spring Light Technology Limited.
1.3 Objective of the Study
The Main Objective of the study is to appraise the effect of non- financial risk on organizational performance. A case study of Human right policy of spring light technology limited;
The specific objectives include
- To determine the nature of non- financial risk.
- To determine the effect of non- financial risk on organizational performance.
- To determine the effect of Human right policy of spring light technology limited on organizational performance.
1.4 Research Questions
- What is the nature of non- financial risk?
- What is the effect of non- financial risk on organizational performance?
- What is the effect of Human right policy of spring light technology limited on organizational performance?
1.5 Statement of the Hypothesis
The statement of the hypothesis for the study is stated in Null as follows
- HO The effect of Human right policy of spring light technology limited on organizational performance is negative.
1.6 Significance of the Study
The study proffers an appraisal of the effect of non- financial risk on organizational performance. A case study of Human right policy of spring light technology limited. It provides relevant data for the effective formulation and implementation of policies to enhance the realization of envisaged objective.
1.7 Scope of the Study
The study proffers an appraisal of the effect of non- financial risk on organizational performance. A case study of Human right policy of spring light technology limited
1.8 Limitation of the Study
The study was confronted with logistics and geographical factors.
1.9 Definition of Terms
Non-Financial Risk Defined
Non –financial risk is associated with the risk of compliance failures, misconduct, technology, or operational challenges. It exacts great consequences on the firm and often result in huge financial losses as a results of expenses made on litigation, compensation claims, and operational mishaps. The neglect of non financial risk also leads to Reputational loss at a time when customers, shareholders, and public stakeholders are more receptive of organizational performance.
Risk Defined
Risk is a condition associated with exposure to danger. Possibility or likelyhood of danger, threat, menace, fear, and prospect.
Certification Defined
Certification is a process of giving recognition to an individual for passing a prescribed examination.
Licensure Defined
This is the permission granted an individual to practice a designated professions.
Accreditation Defined
The s the granting of right of recognition to an institution program.
Education Defined
Education is viewed as the process of inviting truth and possibility. It is the wise, hopeful and respectful cultivation of learning undertaken in the belief that all should have the chance to share in life.
Chapter Five
Summary, Conclusion and Recommendations
5.1 Preamble
This chapter presents the summary and conclusion that can be drawn from the study. It also presents the researchers recommendations with regards to the findings of the study and proposed areas for further studies by other researcher.
5.2 Summary
The Main Objective of the study is to appraise the effect of non- financial risk on organizational performance. A case study of Human right policy of spring light technology limited;
The specific objectives include
- To determine the nature of non- financial risk.
- To determine the effect of non- financial risk on organizational performance.
- To determine the effect of Human right policy of spring light technology limited on organizational performance.
Findings from the study reveal that the effect of Human right policy of spring light technology limited on organizational performance is positive.
Non-financial risks to which organisations are exposed to are business risk and strategic. The level of investment will contribute to the maturity of the risk environment and its integration with the strategy process. Poorly overseen and managed non-financial risks can result in systemic misconduct and loss. Human rights policy helps organizations in systematically identifying, assessing, preventing and addressing harm to employees.
5.3 Conclusion
This paper aims to investigate effect of non- financial risk on organisational performance. (a case study of human right policy of springlight technology limited).
20 respondents was used as the sample size. Data was collected from primary and secondary sources. Primary data was obtained through questionnaire and personal interviews with the respondents. Tables and simple percentage was used as technique of analyzing the research questions.
Findings from the study revealed that the effect of Human right policy of spring light technology limited on organizational performance is positive.
It is recommended that there is need to improve the rigor and precision of non-financial risk management.
5.4 Recommendations
Non-Financial Risk (NFR) comprises a diverse and complex set of risks with the potential to inflict substantial financial and reputational damage on financial institutions. Supervisory authorities around the world are increasingly focused on the importance of effective management of specific categories of NFR, such as conduct risk and cyber risk, as well as on NFR Management as a whole. To meet these increasing supervisory expectations, financial institutions need to implement an integrated framework for managing NFR. A key first step is to adopt taxonomy of all the types of NFR and then identify the specific NFRs facing the organization.
Financial institutions are undertaking these initiatives to enhance NFR management at a time of exceptional volatility and uncertainty in the business and risk management environment. They need to align their NFR Management Framework, including their Risk Identification process with the fundamental trends that are today transforming risk management as a whole.
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