Risk management and profitability

Industrial Engineering Letters
ISSN 2224-6096 (Paper) ISSN 2225-0581 (online)
Vol.4, No.2, 2014

www.iiste.org

Risk management and profitability of manufacturing firms in
Uganda
Noah Mwelu1; Donatus M. Rulangaranga2*; Suzan Watundu3; Will Kaberuka4; Cathy K. Tindiwensi5
1.

Department of Procurement and Logistics Management of Makerere University Business School, P. O. Box
1337, Uganda
2. Department of Management Science of Makerere University Business School,
P. O. Box 1337, Kampala, Uganda.
3. Department of Management Science of Makerere University Business School,
P. O. Box 1337, Kampala, Uganda.
4. Department of Management Science of Makerere University Business School,
P. O. Box 1337, Kampala, Uganda.
5. Department of Entrepreneurship of Makerere University Business School, P. O. Box 1337, Kampala,
Uganda.
*Email: [e-mail], [e-mail]

Abstract
This study was carried out to establish whether the risk in manufacturing firms could have a significant impact on the level of profitability that these firms expect to get in their operations. The study investigated the main components of risk management in manufacturing firms operating in Uganda and how the risk management process could be influential in the profitability levels of these firms. The unit of analysis was composed of a set of manufacturing firms in Uganda engaging in production of goods for sale within and outside the country. Two respondents were selected from each of the 80 (sample size) manufacturing firms. Data collection was carried out by means of a questionnaire which was self administered by the respondents. Correlation, regression and factor analyses were carried out to address the main aim of the study. Findings indicated that risk management process is carried out by first identifying the risk (or probably estimating its occurrence), evaluating its existence and probable effect to a business and finally put in place mitigation measures

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