Abstract

This study examines the effect of risk management strategies on the organizational performance of the Cameroon Development Corporation (CDC), Tiko. In the face of increasing uncertainty and operational challenges, effective risk management has become essential for the sustainability and growth of organizations. The research aims to assess how risk identification, risk assessment, risk mitigation, and risk monitoring practices influence the overall performance of the CDC.

A mixed-methods approach was employed, combining quantitative data gathered through structured questionnaires administered to key staff, and qualitative insights obtained from interviews with selected management personnel. The data were analyzed using statistical tools and thematic analysis to identify trends and patterns. The findings reveal a significant positive relationship between the implementation of robust risk management strategies and improved organizational performance indicators such as productivity, financial stability, and operational efficiency. The study concludes that systematic risk management enhances decision-making and organizational resilience.

It recommends that CDC should strengthen its risk management framework through continuous staff training, the use of modern risk assessment tools, and regular review of risk policies to adapt to the changing business environment. This research contributes to the understanding of risk management as a strategic tool for improving corporate performance in public sector enterprises in Cameroon.

CHAPTER ONE

INTRODUCTION

1.1 Background of the Study

Organisational performance is a critical measure of a company’s efficiency, effectiveness, and overall success in achieving its objectives. It encompasses financial outcomes such as profitability and return on investment, as well as non-financial aspects such as employee productivity, customer satisfaction, and market share (Richard et al., 2009).

For companies like the Cameroon Development Corporation (CDC), which operates in the agro-industrial sector, performance is significantly influenced by internal capabilities and external environmental factors. Given CDC’s role as one of Cameroon’s largest employers and contributors to the economy, understanding the determinants of its performance is essential for ensuring sustainability and growth.

Several factors influence organisational performance, including leadership quality, employee competence, operational efficiency, technological adoption, and external market conditions (Neely et al., 2002). Among these, risk management strategies play a crucial role in mitigating potential threats that could disrupt operations. Risks in an organisation may arise from economic fluctuations, regulatory changes, environmental hazards, or internal inefficiencies. In an industry like agriculture, where CDC primarily operates, risks related to climate change, labor issues, and political instability further complicate performance outcomes. Thus, the adoption of sound risk management strategies is imperative for improving resilience and sustaining organisational growth.

Risk management strategies refer to the systematic identification, assessment, and mitigation of potential threats that could adversely impact an organisation (Hopkins, 2018). These strategies include risk avoidance, reduction, transfer, and acceptance. Effective risk management involves proactive planning, continuous monitoring, and strategic decision-making to minimize disruptions and enhance stability. Organisations that implement structured risk management frameworks can better anticipate uncertainties and develop contingency plans to address potential challenges.

There is a strong link between risk management strategies and organisational performance, as companies that effectively manage risks are more likely to achieve operational stability, maintain financial health, and gain a competitive advantage (Kaplan & Mikes, 2012). By identifying potential risks and implementing appropriate countermeasures, organisations can reduce financial losses, enhance decision-making, and improve overall efficiency. In the case of CDC, a well-structured risk management approach can help navigate industry-specific challenges, such as fluctuating commodity prices, labor strikes, and climate-related disruptions, ultimately leading to improved performance.

Globally, organisational performance remains a key concern for businesses, governments, and policymakers as it directly influences economic growth and sustainability. Effective performance management ensures companies can achieve their strategic goals, maintain profitability, and remain competitive in an increasingly dynamic business environment (Richard et al., 2009).

One of the major challenges faced by organisations worldwide is uncertainty, which arises from economic fluctuations, technological advancements, and unforeseen crises. To address these challenges, risk management strategies have become an essential tool for ensuring operational resilience and long-term success; in today’s increasingly complex and unpredictable global business environment, organisations across the world face numerous risks that threaten their performance and long-term sustainability.

Effective risk management strategies have therefore become essential tools for organisations to identify, assess, and mitigate potential threats while taking advantage of emerging opportunities. Globally, corporations are adopting comprehensive risk management frameworks not only to protect assets but also to enhance decision-making, ensure regulatory compliance, and improve overall organisational performance

In developed countries, businesses have increasingly adopted sophisticated risk management strategies to safeguard their operations against financial losses, regulatory changes, and market uncertainties. Countries like the United States, Germany, and Japan have well-established regulatory frameworks and corporate governance systems that emphasize proactive risk assessment and mitigation (Kaplan & Mikes, 2012). Advanced economies benefit from robust technological integration in risk management, allowing for predictive analytics and data-driven decision-making. These strategies have proven effective in enhancing organisational performance by reducing vulnerabilities and fostering business continuity.

In contrast, developing countries face unique challenges that hinder the effective implementation of risk management strategies. Many organisations in regions such as Latin America, Asia, and Africa operate in unpredictable economic environments, characterized by political instability, inadequate infrastructure, and limited access to financial resources (Neely et al., 2002).

As a result, companies often struggle to implement comprehensive risk management frameworks, leading to higher exposure to operational disruptions. In such contexts, understanding how risk management influences organisational performance is crucial for enhancing business sustainability. Here is a summarized version of the background of the study focusing only on developing countries: Organisations in developing countries operate in environments characterized by high levels of uncertainty, including political instability, economic fluctuations, weak infrastructure, and limited access to modern technologies.

These conditions expose businesses to significant risks that can negatively affect their performance. Risk management strategies such as risk avoidance, reduction, and transfer have become essential tools for helping organisations identify and manage potential threats. However, many enterprises in developing nations lack the systems, resources, and expertise needed to implement these strategies effectively. As a result, their performance often suffers due to disruptions, inefficiencies, and unexpected challenges.

Africa, in particular, has seen a growing interest in risk management as a means of improving organisational performance. The continent’s business environment is marked by factors such as fluctuating commodity prices, governance challenges, and climate-related risks, which significantly impact companies’ stability and growth. In industries like agriculture, manufacturing, and extractives, organisations must adopt effective risk mitigation strategies to navigate the complexities of the African market. Countries like South Africa and Nigeria have made strides in integrating risk management into corporate governance, but many businesses across the continent still lack structured approaches to managing risks (Hopkins, 2018).

In Cameroon, the business environment is shaped by both national and regional economic dynamics, which pose various risks to organisational performance. The Cameroon Development Corporation (CDC), one of the country’s largest agro-industrial companies, plays a critical role in the economy by providing employment and contributing to export revenues. However, CDC faces significant challenges, including labor strikes, climate change, and political unrest, which threaten its sustainability. Understanding how CDC employs risk management strategies to navigate these challenges is essential in assessing their impact on organisational performance. By examining CDC’s approach, this study aims to provide insights into the effectiveness of risk management in the company

1.2 Problem Statement

The problem of poor and inconsistency in organisational performance in much organisation has been attributed to the ineffective application of risk management strategies which are meant to protect the organisation from potential risks. In organisations the problem of poor and inconsistency in organisational performance operate worldwide.

The environments are characterized by increasing uncertainty, volatility, and complexity, making risk management an essential component of business strategy. Risks such as financial crises, cyber security threats, regulatory changes, operational, disruptions, and environmental uncertainties significantly impact organisational performance (Hopkins, 2018). The 2008 global financial crisis and the COVID-19 pandemic demonstrated how businesses lacking strong risk management frameworks suffered severe financial losses, operational inefficiencies, and even collapse (Fraser & Siskins, 2021). In response, organisations across industries have adopted various risk management frameworks, such as

the Committee of Sponsoring Organisations of the Tread way Commission (COSO) Enterprise Risk Management (ERM) framework and ISO 31000, to mitigate threats and enhance performance (Avon, 2016). However, despite the widespread adoption of risk management strategies, there remains a critical gap in understanding their actual impact on organisational performance.

In developed economies such as the United States, the United Kingdom, Germany, and Japan, The problem  of poor inconsistency  of organisational  performance  in many  organisations  has been  attributed to the effective  application  of risk management strategies  which are meant to protect the organisation  well-established practice, often integrated into corporate governance frameworks and supported by strong regulatory oversight (Power, Ashby, & Palermo, 2013).Organisations in these countries leverage advanced technologies, including artificial intelligence(AI) and big data analytics, to identify, assess, and mitigate risks efficiently (Lundqvist, 2015).Regulatory agencies, such as the U.S. Securities and Exchange Commission (SEC) and the European Central Bank, enforce compliance measures to ensure businesses adopt structured risk management practices (Beasley, Clune, & Hermanson, 2005).

Despite these advancements, studies indicate that even in developed countries, there are inconsistencies in how organisations implement risk management strategies, leading to gaps in effectiveness (Brustbauer, 2016). Many firms still experience financial distress and reputational damage due to risk management failures, as seen in cases like the 2008 banking crisis and cybersecuritybreaches affecting multinational corporations (Aven, 2016). This raises concerns about whether risk management strategies truly enhance organisational performance or if they are merely compliance-driven efforts that fail to provide real business value.

In contrast, developing countries face the problem of poor and inconsistency in organisational performance even greater challenges in implementing effective risk management strategies due to weak regulatory frameworks, limited financial resources, inadequate technological infrastructure, and political instability (Doh & Kim, 2014). Businesses in these regions are more vulnerable to operational risks, supply chain disruptions, currency fluctuations, and corruption, all of which negatively affect performance (Wang, Shou, & Yang, 2018).

Several developing countries, such as India, Brazil, and South Africa, have introduced orate governance reforms aimed at improving risk management practices (Chatterjee, 2020). However, the level of adoption and enforcement varies widely, with many firms lacking the expertise or resources to implement structured risk mitigation strategies effectively (Fatemi& Glaum, 2000). As a result, businesses in these economies often suffer from reduced investor confidence, financial instability, and lower competitiveness in global markets. The question remains: how can developing countries enhance their risk management frameworks to improve organisational performance and ensure long-term business sustainability?

Cameroon also faces the problem of poor and inconsistency in organisational performance, like many developing economies, faces significant economic, political, and operational risks that impact business performance. Companies in Cameroon operate in a challenging environment marked by regulatory uncertainties, infrastructure deficits, currency fluctuations, and security threats, particularly in regions affected by socio-political conflicts (Tchankam, Dongmo, & Akame, 2016). These risks pose significant threats to business sustainability, making effective risk management a critical necessity. Despite these challenges, awareness of the importance of risk management is growing among Cameroonian businesses.

The banking sector, for example, has strengthened its risk management frameworks to address credit and liquidity risks, ensuring greater financial stability (Ngwa & Kengne, 2021). Similarly, firms in the oil and gas, telecommunications, and manufacturing sectors are gradually integrating risk assessment tools to enhance decision-making and operational efficiency (Bang, 2019). However, enforcement of corporate governance and risk management policies remains weak, leading to inconsistencies in implementation across industries (Njangang, 2020).

The Cameroon Development Corporation (CDC), one of the largest agribusiness enterprises in Cameroon, plays a vital role in the country’s economy through the production of rubber, palm oil, and bananas for both domestic and international markets (Njoh, 2020). However, in recent years, CDC has faced numerous operational, financial, and strategic risks that have significantly affected its performance and sustainability.

These risks stem from socio-political instability, market volatility, financial mismanagement, climate change, labor strikes, and supply chain disruptions (Ngwa & Kengne, 2021). Given these challenges, the adoption of effective risk management strategies is crucial for ensuring the corporation’s long-term survival and competitiveness. However, the extent to which risk management strategies influence CDC’s organisational performance remains unclear, necessitating an in-depth investigation.

Globally, risk management has become an integral part of corporate governance, with frameworks such as ISO 31000 and the COSO Enterprise Risk Management (ERM) guiding organisations in identifying, assessing, and mitigating risks (Aven, 2016). In developed economies, businesses leverage technology, regulatory policies, and financial risk assessment models to strengthen resilience and enhance performance (Power, Ashby, & Palermo, 2013)these strategies in improving organisational outcomes (Brustbauer, 2016).In developing economies like Cameroon, risk management remains a significant challenge dueto weak regulatory enforcement, inadequate infrastructure, and financial constraints (Doh & Kim,2014). Many organisations lack structured risk management policies, exposing them to operational inefficiencies and financial instability (Wang, Shou, & Yang, 2018).

The CDC, despite being a state-owned enterprise, has been severely affected by risks such as declining global commodity prices, labor unrest, and the Anglophone crisis, which have led to declining revenue and production capacity (Tchankam, Dongmo, & Akame, 2016). Although CDC has attempted to implement risk management strategies, including diversification and government intervention, their effectiveness in enhancing organisational performance remains questionable. Recent studies suggest that firms that adopt proactive risk management frameworks experience improved financial stability, operational efficiency, and stakeholder confidence (Fombang & Ngum, 2019).

However, in the case of CDC, persistent financial losses, production halts, and declining export volumes indicate potential gaps in its risk management strategies (Mbang, 2019). The lack of a comprehensive risk management system may be limiting the corporation’s ability to mitigate external shocks and ensure long-term sustainability. Given CDC’s critical role in Cameroon’s agricultural sector and economy, it is imperative to assess the impact of its risk management strategies on organisational performance.

This study seeks to evaluate whether CDC’s existing risk management frameworks effectively address the corporation’s operational challenges and enhance its financial and operational sustainability. Identifying gaps and proposing recommendations for improved risk management could provide valuable insights for policymakers, business leaders, and stakeholders in Cameroon’s agribusiness sector.

1.3 Research Questions

1.3.1 Main Research Question

What is the effect of risk management strategies on organisational performance of CDC Tiko?

1.3.2 Specific Research Questions

1. How do risk avoidance strategies impact the organisational performance in CDC Tiko?
2. How does risk reduction strategy affect organisation performance in CDC Tiko?
3. What is the effect of risk transfer strategy on organisational performance of CDC Tiko?

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