Operational risk management, organizational environment and organizational performance at Stanbic Bank Uganda limited.

Abstract

The study was motivated by the persistent fraud in Stanbic bank which could be a pointer of Stanbic bank being faced with operational risk challenges which have affected its performance. The purpose of the study was to examine the relationship between operational risk management, organizational environment and organizational performance in Stanbic Bank Uganda Limited. The study undertook a cross sectional survey design. Data was collected using self administered questionnaires and analyzed using the Statistical Package for Social Sciences (SPSS V.16) to generate descriptive and inferential statistics.

The findings indicated that there were strong positive and significant relationships between operational risk management, organizational environment and organizational performance. The findings from regression analysis revealed that operational risk management and organizational environment were significant predictors of organizational performance.

In conclusion, in order for the bank to realize effectiveness and efficiency in its performance, management should work towards putting in place a favourable organizational environment which does not promote operational risk as this will have a great impact on organizational performance. From the findings, the model explains only 42.4% in variance of the organizational performance, therefore, a study be carried out comprising of other factors which were not part of the model to account for the percentage which was not explained by the model. In addition, to study the true nature and quality of operational risk management, organizational environment and organizational performance, a longitudinal study could be designed.