Enterprise risk management and organizational Sustainability within the supply chain industry in Kenya

Abstract

Effective enterprise risk management practices are critical for both private and public sector organizations to enhance their sustainability. The study is prompted by the challenges that have been facing KEMSA, including allegations of corruption and mismanagement of funds. The organization has been accused of irregular procurement practices, overpricing of medical supplies, and misuse of public funds. The main intention of this research was to examine enterprise risk management influence on sustainability of supply chain industry in Kenya. The following specific objectives were used to guide the study namely to determine the influence of risk identification on sustainability, to examine the effect of risk assessment on sustainability, to determine the effect of risk response on sustainability and to establish the effect of risk monitoring and review on sustainability. The study was anchored on contingency theory and supported by agency theory and resource-based view theory. An explanatory research design was used in this research. The population of the study was the 389 employees at KEMSA headquarters in Nairobi. Sample size was 198 employees stratified according to their departments. Primary data obtained using questionnaires was collected. The questionnaire's validity and effectiveness was tested in this study by randomly selecting 20 employees at KEMSA to complete it. The questionnaires were administered through Google forms. Upon collection of the data, it was coded in quantitative format so as to enable analysing using version 24 of statistical package for social sciences (SPSS). Inferential as well as descriptive statistics generated included frequencies and percentages and simple and multiple linear regression respectively. Descriptive and inferential statistics generated were presented in tables and figures. The study revealed a significant positive relationship between risk identification, risk assessment, risk response, risk monitoring and review and sustainability of supply chain industry in Kenya. This study concluded that enterprise risk management practices are essential for KEMSA to use in their endeavour to improve on their sustainability. The study recommends that KEMSA should enhance risk identification, assessment, response, and monitoring and review processes, to bolster its sustainability in the supply chain industry in Kenya. Additionally, ongoing training, performance monitoring, and alignment with strategic objectives are essential to ensure the sustainability of these enterprise risk management efforts over the long term.