The effect of organization culture on risk management

Abstract

The study was about the effect of organisation culture on risk management in Post Bank Limited, Uganda. The study was informed by the fact that, organisation culture plays a significant role in risk management in financial institutions which requires empirical assessment. The study was guided by three objectives which included: to assess the effect of artifacts on risk management, to assess the effect of values on risk management and to assess the effect of shared assumptions on the risk management in Post Bank Uganda Ltd. The study used a case study research design with both quantitative and qualitative approach. The unit of inquiry were the bank staff and unit of analysis was Post Bank Uganda. Data was collected from 111 respondents using closed ended structured questionnaire as quantitative approach and 5 respondents using interview guide as qualitative approach. Quantitative data was analysed using SPSS version 20 to generate descriptive, correlation and regression empirical analysis while qualitative data was analysed using Atlas ti version 1 to generate explanatory notes. The results from the descriptive analysis indicate that the respondents agreed with existence of favourable organisation culture to foster risk management with the mean value of 4.00. The correlations analysis indicates that organisation artifacts, values and shared assumption; organisation structure and technology capacity have a positive statistically significant relationship with risk management at the bank. Other findings from regression analysis establish that organisation artifacts, values; organisation structure and technology capacity predicts risk management at 95% level of significance while shared assumption does not predict risk management in Post Bank Uganda. Organisation culture, structure and capacity explain 53.3% variation on risk management (R-Square = 0.533) while other factors are explained by 46.5%. The study recommends that managers, supervisors and staff in banks should focus on organisation artifacts, values, and organisation structure and technology capacity to influence effective risk management in order to enhance organisation efficiency