THE MODERATION - MEDIATOR EFFECT ON THE RELATIONSHIP BETWEEN TRANSFORMATIONAL LEADERSHIP AND ENTERPRISE RISK MANAGEMENT ADOPTION BY COMMERCIAL STATE CORPORATIONS IN KENYA
Abstract
Background of the Study: In today’s dynamic and competitive business environment, organizations are adopting the enterprise risk management framework to address the inadequacies in risk management to ensure realization of business objectives. In Kenya, the adoption of Enterprise Risk Management (ERM) by State Corporations is a mandatory requirement and yet the information on levels of adoption amongst Commercial State Corporations most of which continue to experience poor performance due to weak governance is scanty.
Objective of the study: This study sought to determine the moderation - mediator effect on the relationship between transformational leadership and enterprise risk management adoption by Commercial state corporations in Kenya.
Methodology: This study adopted a positivist research philosophy and cross-sectional survey design approach. Target population comprised all the Commercial State Corporations in Kenya listed in the register of State Corporations Advisory Committee (SCAC) as at January 2021. The unit of analysis was the 52 Commercial State Corporations and unit of observation was top management of each entity. Census method was used and all members of the top management team were enumerated as respondents. The study achieved a response rate of 76% with the return of 276 questionnaires. The study used primary data, which was collected through structured questionnaires. The descriptive and inferential statistics was employed in the analysis. The Statistical Package for Social Sciences (SPSS) was used in regression modeling for prediction and causal inferences between study variables.
Results and Findings: The moderation-mediator effect on the relationship between transformational leadership and enterprise risk management adoption was found to be significant.
Reccommedations: The study recomended that mainstreaming and alignment of internal polices of state corporations to external regulations to enhance enterprise risk adoption.Good governance is also recommended. Internal policies should be reviewed periodically to incorporate changes in external regulations.
Keywords: External Regulation, Transformational Leadership, Corporate Strategy, Enterprise Risk Management Adoption & Commercial State Corporations
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