Financial Crime World

Risk Management in Manufacturing Sector: A Study on Perception and Practices

A recent study published in the WSEAS Transactions on Business and Economics has shed light on the perception and practices of risk managers in the manufacturing sector regarding risk management functions.

Perceptions of Risk Managers

The study, conducted by Ibrahim Omer Elfaki and Abdelsamie Eltayeb Tayfor, surveyed 391 respondents from various sectors within the manufacturing industry. The findings revealed that a significant majority (81.3%) of the respondents considered financial management as an essential function to be combined with risk management.

Reporting Situations

Regarding the reporting situation, the study found:

  • 54.1% of the respondents reported that the risk manager reports to the finance manager
  • 31.8% indicated that he should report to the chief executive
  • Only 9% of the respondents believed that the risk manager should report to both the board of directors and chief executive

Circulation of Risk Management Philosophy Manual

The study also found that:

  • 59.2% of the respondents indicated that there is no policy of circulation for the risk management philosophy manual
  • 31.8% reported that no circulation has taken place at all
  • Only 9% of the respondents stated that the policy had been circulated to enterprise departments

Safety Audits

Furthermore, the study found:

  • A significant majority (84.8%) of the respondents believed that safety audits are conducted only once a year within their organizations
  • 1.3% of the respondents indicated that no safety audit was carried out in their enterprise at all

Involvement of Risk Management Department

The study highlights the importance of effective risk management practices in the manufacturing sector. It underscores the need for organizations to develop and implement robust risk management strategies that take into account the unique needs and challenges of each industry segment.

Conclusion

The study emphasizes the significance of proper risk management practices in the manufacturing sector, which is crucial for ensuring business continuity, reducing losses, and increasing competitiveness. By understanding the perceptions and practices of risk managers, organizations can develop more effective risk management strategies that cater to their specific needs and challenges.

Source

WSEAS Transactions on Business and Economics, Volume 20, 2023

DOI: 10.37394/23207.2023.20.197