The risk management practices and organisational performance in public institutions: A case of DUWASA and TANESCO in Dodoma

Abstract

This paper assesses the risk management practices and organizational performance of public institutions. Specifically, the paper assessed, the types of risks faced by public institutions, the strategies used in managing them and the role of risk management practices in improving organizational performance. Probability and non-probability sampling techniques were employed to select employees from TANESCO and DUWASA. Both descriptive (multiple responses) and inferential statistics (ordinal regression) were used for data analysis. The findings revealed that public institutions face procurement risks, financial risks, and unethical risks. Risk reduction, risk transfer, and risk acceptance were the preferred strategies to manage risks within organizations. The “Spearman's Rank Correlation” results show that there is a significant and positive correlation between risk treatment (r= 0.735, p= 0.05), risk identification (r=0.528, p=0.01), and organizational performance in TANESCO while there is a significant and positive correlation between risk treatment (r=0.683, p=0.01), risk identification (r=0.461, p=0.05), risk analysis (r=0.450, p= 0.05) and organization performance in DUWASA. Ordinal regression results show that risk management processes (establishing scope, context and criteria = 2.678, risk identification =2.766, and risk treatment= 3.930) were a significant and positive predictor of organizational performance in TANESCO at the one percent level, while risk identification (1.619) and risk treatment (2.158) were significant and positive predictors of organizational performance in DUWASA at the one and five percent levels respectively. Therefore, public institutions should integrate risk management processes with other core functions of the organization if organizational objectives are to be achieved.