Abstract
This study examines the relationship among the perceived business risk and perceived organization
performance. In this article, researcher has explored the role of risk management in dynamic
business environment. This study employed the structural equation modeling method in order to
test hypothesis. Questionnaire was used to collect data from senior finance professionals from
organizations operating in Pakistan. The results indicate that contingency variable is significantly
influences the organization performance. Regarding the effects of risk management variables, the
results show that the magnitude of RM methods, formalization of RM methods and internal controls
also have significant effects on the organization performance. Providing significance evidence on the
contingent factor and risk management, the analysis helps managers to improve their organizational
performance. This research highlights the magnitude of RM methods merely subject to how
accurately managers perceive business risk. An overlooked risk not only affects the investment /
finance / operational decisions but also reduces the overall organization productivity. Therefore,
implementation of formalized RM methods, risk-based controls and magnitude of RM methods are
necessary to maintain organization performance. This study contributes to the literature related to
perceived business risk in Pakistani context. The researcher creates awareness among the managers
about uncertainty / risk faced by companies and help them to develop appropriate internal controls
to sustain organization performance.
Akmal Shahzad Butt, Muhammad Khan. (2020) Contingency Factor, Risk Management and Organization Performance: A Case of Pakistani Business Organization, Abasyn Journal of Social Sciences, Volume-13, Issue-1.
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