ASSESSING IMPLICATIONS OF RISK MANAGEMENT ON PERFORMANCE OF SELECTED FEDERAL HEALTH INSTITUTIONS IN SOUTH EAST, NIGERIA
The study sought to determine the extent to which risk identification affects organizational productivity in selected federal health institutions, ascertain the extent of the relationship between risk assessment and creativity in selected federal health institutions, determine the effect of risk response strategy on innovation in selected federal health institutions, determine the nature of the relationship between risk management and organizational effectiveness in selected federal health institutions and ascertain the extent at which internal environment affects organizational growth in selected federal health institutions. The study had a population size of 4535, out of which a sample size of 553 was realised using Freund and Williams’s formula at 5% error tolerance and 95% level of confidence. Instrument used for data collection was primarily questionnaire and interview. Out of 553 copies of the questionnaire that were distributed, 506 copies were returned while 47 were not returned. The descriptive survey research design was adopted for the study. The hypotheses were tested using Pearson product moment correlation coefficient and simple linear regression statistical tools. The findings indicate that risk identification significantly affects organizational productivity in selected federal health institutions (r = 0.764; F = 418.677; t= 13.516; p= 0.05 ) . There is a significant relationship between risk assessment and creativity in selected federal health institutions (r =. 955, p < .05). Risk response strategy has a significant effect on innovation in selected federal health institutions ( r = 0.782 ; F= 4.4103; tc = 9.149 > tt = 1.96; p < 0.05). There is a positive relationship between risk management and organizational effectiveness in selected federal health institutions (r =.583, p <. 05). Internal environment significantly affects organizational growth in selected federal health institutions ( r = 0.619 ; F= 313.489; tc = 9. 744 > tt = 1.96; p < 0.05). The study concluded that risk management is a corner stone of good corporate governance which must result in to better service delivery, efficient and effective use of scarce resources .The study recommended that risk management should be a common thread throughout the entire organization. The study recommends that all health institutions should critically carryout risk management programmes, so as to enjoy inherent benefits of the programme and there should be continuous training and development programmes for those who work under risk/safety and emergence units on how to assess risk, handle risk and manage risk for organizational effectiveness and Firms should integrate risk management into their organization’s philosophy, practices and business plans rather than being viewed or practiced as a separate programme and that would allow them to see risk management as a proactive activities rather than reactive.
1.1 Background of the Study
Risk management began to be studied after World War II. Several sources (Crockford, 1982; Harrinton and Neihaus, 2003; Williams and Heins, 1995) date the origin of modern risk management to 1955-1964. Snider (1956) observes that there were no books on risk management at the time, and no university offer courses in the subject. The first two academic books were published by Mehr and Hedges (1963) and Williams and Hems (1964). Their content cover pure risk management, which excluded corporate financial risk. Risk management, has long been associated with the use of market insurance to protect individuals and companies from various losses associated with accidents (Harrington and Neihaus, 2003).
New forms of pure risk management emerged during the mid-1950s as alternative to market insurance when different types of insurance coverage became very costly and incomplete. Several business risks were costly or impossible to insure. During the 1960s, contingent planning activities were developed, and various risk prevention or self-protection activities and self-insurance instruments against some losses were put in place. Protection activities and coverage for work-related illness and accidents also arose at companies during this period (Harrington and Neihaus, 2003).
The use of derivatives as instruments to manage insurable and uninsurable risk began in the 1970s, and developed very quickly during the 1980s. It was also in the 1980s that companies began to consider financial management or risk portfolios. Financial risk management has become complementary to pure risk management for many companies. Financial institutions, including banks and insurance companies, intensified their market and credit risk management activities during the 1980s. Operational risk and liquidity risk management emerged in the 1990s (Harrington and Neihaus, 2003).
International regulation of risk also began in the 1900s. Financial institutions developed internal risk management models and capital calculation formulas to protect themselves from unanticipated risks and reduce regulatory capital. At the same time, governance of risk management became essential, integrated risk management was introduced, and the first risk manager positions were created (Harrington and Neihaus, 2003)…..