Vol. 16(3), pp.

42-54, March 2022

DOI: 10.5897/AJBM2020.9117
Article Number: 299D40768892
ISSN: 1993-8233
Copyright© 2022
Author(s) retain the copyright of this article African Journal of Business Management
http://www.academicjournals.org/AJBM

Full Length Research Paper

Assessment of risk management practices in dangote

cement factory, Ethiopia
Moti Tafa Negero1,2* and Getahun Birhanu Bona3
1
School of Business Administration, Zhejiang Gongshang University, China.
2
Department of Management, College of Business and Economics, Salale University, Fiche, Ethiopia.
3
Department of Business Management, School of Business Management, Rift Valley University, Ethiopia.
Received 20 September, 2020; Accepted 18 October, 2021

This study aimed to assess the risk management practices in Dangote Cement Factory, Ethiopia.
Descriptive research design was employed in this study along with quantitative and qualitative research
approaches. The total population was 353 of which 192 respondents were selected using simple
random sampling technique. In addition to this, four managers were chosen for interview using
purposive sampling technique. The primary information or data were gathered using structured survey
which enclosed both open and close ended questions. Moreover, data were analyzed using both
descriptive analysis like frequency and percentages and inferential statistics with the help of Statistical
Packages of Social Scientist 20 version computer software. The findings of this study shown that there
was no awareness created regarding training of the risk management process in the company.
Moreover, packing plant risk and material risk were the most faced risks in Dangote Cement Factory.
Finally, the study recommended that, the company is better to provide awareness creation, and
continuous training, fulfilling personal protective equipment and establishing safety supervision staff
committees.

Key words: Risk, risk management, dangote cement factory, Ethiopia.

INTRODUCTION

Risk is inevitable alike the common death of people and also an exposure to a transaction with loss, which occurs
companies’ taxes. It is one of the rare things in human life with some probability where such loss can be expected,
that is unavoidable. All kinds of businesses, regardless of measured and minimized.
their size and shape, in any environments they function In financial institutions and manufacturing companies,
and no matter what goods and services they deliver, are risk results from variations and fluctuations in assets or
continuously exposed with a multiple of risks, large or liabilities or fluctuation both in incomes from assets or
small. Certainly, businesses can only flourish by effective payments on liabilities or variation in outflows and inflows
risk taking as argued by (Osborne, 2012). Besides, risk of cash. In today’s world, banks are facing various types
arises due to uncertainties, which in turn arises due to of risks in the course of their service delivery and hence,
changes that could take place in the economic, social a bank manager should ensure that he/she has a clear
and political environments and as well as due to lack of understanding of these risks to take sound measures
information availability regarding such changes. Risk is effectively manage them. Therefore, bank managers

*Corresponding author. E-mail: motitafa10@gmail.com.

Author(s) agree that this article remain permanently open access under the terms of the Creative Commons Attribution
License 4.0 International License
 Negero and Bona 43

have to be “risk intelligent’’. Risk intelligence defined as studied on the effects of credit risk management
the ability to make informed decisions based on past, regarding the effectiveness of commercial banks
current and future data (Whipple, 2010). In banks and operating in Ethiopia, Liza (2018) identify the determinant
financial institutions, risk considered the most important of liquidity risk management of commercial banks in
factor of earnings. Ethiopia and risk management practice in commercial
Therefore, they have to balance the relationship banks in Ethiopia, Haile (2016); JICA (2015).
between risk and return. In reality, it can be say that Therefore, limited attention was given to the
management of financial institution is nothing but assessment of risk management practices on
management of risk. Managing financial risk manufacturing companies. Furthermore few studies were
systematically and professionally becomes an even more conducted like; Debela (2009) on risk management
important task. Rising global competition, increasing practices in manufacturing companies in Ethiopia.
deregulation, introducing of innovative products and Therefore, number of researcher studied risk which were
delivery channels has pushed risk management to the faced in a manufacturing company mainly like; credit risk,
forefront of today's financial landscape. Ability to measure liquidity risk, operational risk However, this study is aimed
the risks and take appropriate position will be the key to for the extension of the literature on this area by
success. It can be said that risk takers will survive, evaluating the several kinds of risks confronted including
effective risk managers will prosper and risk averse are packing risk in manufacturing companies specifically on
likely to perish. Dangote Cement Factory and intends to fill the existing
According to Osborne (2012), risk management has an literature gap.
essential role in one’s decision-making, whether or not it
regards to start-up of business, developing strategies,
taking advantage of opportunities, managing ones Basic study questions
several projects or in one’s business on a daily bases
operations. Risk management can support to rationalize For this study, the following basic research questions are
to the management group, employees, business developed. These are:
stakeholders, investors, creditors and clienteles.
In addition the research attempts to examine the 1) What are the nature, structure and strategies of risk
incorporation of a formally delegated risk management management practices of Dangote Cement Factory?
body within a company structure, along with the 2) What kind of risks is exposed in Dangote Cement
necessary resource allocation, that is based on an Factory?
established risk management policies, strategies and 3) Are the staffs in Dangote Cement Factory familiar with
procedure which provides the guideline for the process of the concepts of risk and its associated management?
defining the risk appetite and identify and measure the 4) What are the risk management mechanisms used by
major risks of a company in order to treat and exploit Dangote Cement Factory?
these risks. In addition, the research examines the
existence of a periodic internal audit review that ensures
the implementation of risk management policies and Research objectives
procedures.
General objective

Problem statement The general objective is to investigate the risk

management practice in Dangote Cement Factory.
Manufacturing companies currently working in a situation
marked by rising customer preferences, growing
regulatory necessities, technological revolution and Specific objectives
increasing competition (Ariful and Tedford, 2012).
In Ethiopia, the competition within the manufacturing In connection with the above overall objective of the
industry has generated a greater concern to manage the study, the listed precise objectives were designed to
entire activities of banks in order to avert any possible solve the basic research questions.
risks that may occur. The regulatory body believes that 1) To evaluate the nature of risk management practices,
the growth should be matched with strong risk strategies and objectives mostly used in Dangote Cement
management Practices. However, the previous studies Factory.
on risk management practices of manufacturing in 2) To identify the type of risk exposures faced by
Ethiopia were highly undertook. The exception to this Dangote Cement factory.
argument is that the available various studies gave 3) To ascertain the nature of risk management practice in
focused to assess types of risks. For instance, Fasika Dangote Cement Factory.
(2012) has investigated selected Ethiopian commercial 4) To identify the process adopted by the Dangote
banks operational risk management, Tefera (2011) has Cement Factory for risk management.
44 Afr. J. Bus. Manage.

Table 1. Summary of types of risks.

Types of risk Author(s) Definition(s)

Greuning and -is the probability that a borrower of a financial instrument if an individual, a corporation, or a state will fail to
Credit risk
Bratanovic (2009) pay principal and other investment related interests as per the terms stipulated in a credit contract
-is defined as the hazard to earnings or capital related to a bank’s capacity to meet its responsibilities to
Liquidity risk Gup and Kolari (2005) creditors and the wants of debtors by changing assets into cash swiftly with least loss, being able to borrow
moneys when wanted, and having funds accessible to execute gainful securities transaction deeds
Market risk -refers market risk as the chance of forfeiture to bank produced by the variations in the marketplace
Saunders et al. (2006)
conditions
Interest rate risk -refers the possible adverse effect on the net interest revenue and is the exposure of an organizations
Gleason (2000).
financial situation to the changes in interest rates.
Foreign exchange -defines as the risk that a bank could expose to loss as a result of hostile exchange percentage undertaking
Raghavan (2003)
risk throughout a period in which the business has open position, either spot or forward.
-referred as the hazard of straight or unforeseen loss resulting from insufficient or unsuccessful interior
Operational risk (Njogo, 2012)
processes, persons and schemes or from outside events
Source: Compiled by the researcher.

LITERATURE REVIEW other (Adarkwa, 2012). Various writers have categorized

these risks in different manners to form the structures for
Theoretical literature their investigations (Table 1).

this part of the study talks about the different theoretical

aspects of risk like its definition, types, management and Process of risk management
others as well as empirical issues and works as to the
risk management practice in the banking industry It is significant that a risk managing policy can be formed
discussed. early in a project and such risk could be persistently
solved through the project life cycle. Risk management
contains numerous related activities which includes risk:
Defining risk planning, identification, analysis, response, and
monitoring and control as indicated by Kerzner (2017).
Risk is all about uncertainty. That is inability to precisely
determine what will occur in the future, as the future is full
of uncertainty. With regard to what is a risk Osborne Risk planning
(2012) has claimed that, what people stressing is a future
difficulty, opportunity or the possible future consequence Risk planning process explains how to practice risk
of a decision that can be decided today. And also each management frame’s sub-processes. Without having risk
and every decision pass or any act taken comprises of planning, managers do not know accurately what, when
some sort of risk. Furthermore, Osborne (2012) has and how to do.
indicated that, risks can be occurred because of peoples This process makes the company for risk management
own business activities or because of outside forces like like developing strategies, forming the process which
as regulations, market factors, and exchange rate should be engaged and their instruction, any other
volatilities, the actions of others or can be weather properties which may be needed, who is accountable for
conditions. precise procedures and could even contain trainings or
discussions for enlightening the risk management
professionals of personnel (PMBOK, 2008). This kind of
Types of risk plan is crucial to communicate with and get agreement
and backing from other all participants to safeguard the
Banking is the bridge between money savers on one side risk management procedure is reinforced and achieved
and the financial seeking corporate entrepreneurs on the efficiently throughout the project life cycle.
other side. As a result, in the procedure of providing
financial services, banks can undertake numerous types
of risks which might both financial and non-financial. Identification of risk
Furthermore, this risk characteristic in the delivery of their
facilities fluctuates from one product or service to the Risk identification is an important step compared with
 Negero and Bona 45

another steps in the risk management procedure like (Hillson and Murray-Webster, 2017). Two popular
analysis and responses are the only fruitful probable risks Qualitative risk analysis techniques are the Monte Carlo
identified accurately (Toakley and Ling, 1991; Yang et al., Simulation and the use of the decision tree.
2005).
According to Chapman (2011), the purpose of this step
is to identify both the threats to the business with the Review of empirical literature
potential of reducing and eliminating the probability of the
firms attaining its goals, and the chances, which may An efficient risk management helps construction
improve business firms’ performance. External factors companies to classify and measure risks and to consider
which may include economic, political, socio-cultural, risk control and risk reduction strategies. Construction
technological and environmental as well as internal companies that can manage risk successfully and
factors including infrastructure, personnel, process and proficiently enjoy financial savings, and greater
technology may affect successful achievement of productivity, enhanced success rates of new projects and
objectives (Marchetti, 2011). well decision making. Straw (2015), states that the area
PMBOK in similar way defines risk identification as the of risk and uncertainty is particularly important in project
process of defining which risks could impact the project management and is a natural element of projects. That is
and recording their features. According to Kerzner why risk management can be acceptable on nearly all
(2017), risk identification should remain through all the projects whereas, the level of implementation could differ
project stages and is vital that such identification process from project to project, based on such factors like size,
dealt with the foundation of the risk than the incident itself kind of project, who the client is, in connection to the
or the effect if possess. corporate strategic design, and company culture. Risk
This is since the risk taker could do something about management is mainly vital when the general risks are
the bases of the risk, but not actually do very plentiful high and a excessive deal of ambiguity exists. In the past,
about the occurrence or the impacts (Roberts and we treated risk as a "let's live with it." Nowadays, risk
Wallace, 2004). management is a main part of overall project
Tayntor (2010), states that there some probable management. It obliged us to emphasis on the
methods for identifying risks. As risk identification is a forthcoming where uncertainty occurs and develops
process of uncovering potential risk according to the appropriate plans of action to avoid potential matters from
PMBOK (2008). unpleasantly impacting the business project Kerzner
The output is a risk register which clearly defines and (2017).
explains each risk, which is referred to and incrementally A Survey was conducted by Frezewed (2016),
developed throughout the overall risk management regarding practice of project risk management in the case
process (Chapman, 2011; Jordan, 2013). Also risks can of Batu and Dukem town water supply projects and it
be analyzed using different qualitative and quantitative revealed that risk management knowledge area is
analysis. practiced little in the projects. The study also showed that
there is no practice of assigning a risk manager, whose
primary responsibility is managing risks. The same study
Qualitative analysis sited that, other studies done in the country in the areas
have also found similar findings. According to Yimam
Once high risk has been identified and listed, the quality (2011), the practice of risk management in Ethiopia is
assurance tests need to be incorporated in the risk very little and undeveloped.
register document. The first procedure is to give a brief, A study conducted by Debela (2018), the practice of
clear explanation of each risk to avoid ambiguity and construction risks management with insurance in the
confusion. After a risk has been identified, it should be Ethiopian federal road projects exposed that formal risk
categorized according to its source (there should be management is failed to be practiced very well. The road
enough sections to cover as many risks as possible), and construction perils are not be able to manage through
a negative event that would expose the risk should recognized risk management scheme. Nevertheless,
clarified (PMBOK, 2008). there are repetitive practices utilized to manage risks.
Such old practices, although contribute to risk
management, do not follow to the formal risk management
Quantitative analysis procedures which contains risk management preparation,
identifications, evaluations, reaction planning, and
While the qualitative risk assessment is an excellent tool monitoring. The above discussion on theories and
for assessing individual risks, quantitative risk analysis summary of findings of related studies clearly indicates
analyzes the combined impact of project risks. This is that project risk management practice is important to lead
usually the end of an accurate assessment of the overall projects towards success by reducing the negative
risk of a project, and should be done where necessary impact of risks and uncertainties.
for the purpose of the study (Figure 1).

46 Afr. J. Bus. Manage.

Risk planning
Risk
Risk monitoring identification
and control Risk
Risk analysis
manageme
Risk response
nt

Figure 1. Own Conceptual Framework

Figure 1. Own conceptual framework.

Conceptual framework departments including agents of Dangote Cement Factory as target

population of the study. The researcher considered all of these five
departments of employees for this study as a population and to find
Based on the above theoretical and empirical literatures out more information four position person (Manager of the
the Figure indicated that conceptual frame work was company, assistant manager of the company, Head, of risk
developed for the purpose of the study (Figure 1). management and supervisor) was selected purposively. The
researcher believed that from the fact that those who have close
taking part in risk management practice than others.
METHODOLOGY

Research design Sample size determination

Research design reveals the research procedures used to generate The sample size can be determined following Yammane’s formula
important data for the research or dissertation. The research design (1967). The formula used to determine the sample size is:
was employed to describe the target population, sampling and n = N/1+N (e) 2,
sampling procedures. The methodology in data acquisition,
techniques used to collect data and data analysis are also included Where, n refers to the sample size, N is the population size,
in this research design. The descriptive research design was and e is the level of precision.5% level of significance/precision
employed to describe the assessment of risk management practice is chosen.
in Dangote Cement Factory.
n = N/1+N (e) 2
n =353/1+353(0.05)2 = 188+4 =192
Research approach

Referring to Creswell (2009), there are three basic research Sampling proportional allocation
approaches; these are quantitative, qualitative and mixed research
approaches. Stratified sampling methods, is next to identifying the sample size
using the above written equation, the researcher exhibited the
projected sample scope to the strata under the study. One of such
Source and method of data collection method is referred to as proportional allocation. It is utilized when
the size of the sample from particular strata is proportional to the
In order to carry out any research activity, information or data would size of the strata. In proportional sample allocation, a trivial sample
be gathered from proper source. According to Koul (2006), the took small strata, huge sample took large strata, and the sample
reliable and consistent research, shows that the research was done size in each stratum must be proportional (Table 2).
by using suitable data gathering tools for increasing the creditability
and value of research findings. The research used was primary n h
data. The primary data collect both open-ended questions and nh=
closed ended questions likert scale in semi structured 
questionnaires.  =  h total number of employees
=

Study population and sampling frame  h = total number of population size in stratum- h
Sampling can be defined as the process of selecting, from
n   nh ….total number of sample
abundant large population, a group which desire to make
generalized declarations so that the selected part represents the n h = total number of sample size in stratum- h
total populations (Leedy, 1989:158). Stratum-N1= 15–Sales and Marketing
Among all department of the study company, five departments Stratum-N2= 17 - Finance
are the most faced by risk. Therefore, all employees of five Stratum-N3= 135–Packing Plant
 Negero and Bona 47

Table 2. Respondents Strata. reliability and validity of the instrument of data collection before
using it. Validity is concerned with the extent to which a tool
Population measures what it is expected to measure. Reliability on the other
S/N St Departments Strata hand is concerned with consistency in measurement and can be
size
studied through measuring the degree of uniformity between
1 Sa Sales and Marketing 15 8 numerous measures of a hidden variable (Hair et al., 2006). The
2 Fi Finance 17 9 reliability of the items in the instrument was measured using
3 Pa Packing Plant 135 72 Cronbach’s alpha which is the most frequently used reliability test to
measure internal consistency when using Likert scale.
4 M. Material Management 48 26
In reference to Brymanan Bell (2003) Cronbach’s Alpha reliability
5 Pr Production 138 73 test was run in the data gathered to measure the consistency of the
Total 353 188 data. The overall Cronbach’s alpha result of the 31 items was 0.814
(81.4%) which is still higher than the minimum alpha value set as
Source: own survey, 2020. acceptable (that is, 0.70). The Cronbach alpha result summary
obtained from SPSS is indicated in Table 3.

Table 3. Summary of reliability statistics

(Cronbach’s Alpha). RESULT AND DISCUSSIONS

Reliability statistics Response rate

Cronbach's Alpha N of Items
0.814 31 A total of 192 likert scale questionnaires including 5 open
ended questionnaires were distributed to five different
Sources: SPSS Output, 2020.
departments and four different person of Dangote
Cement Factory by the researchers to collect primary
data. Out of this, 157 questionnaires are completed and
Stratum-N4= 48–Material Management used for data analysis (Table 4).
Stratum-N5= 138–Production A total of 157 questionnaires were returned with
n h complete responses, which 7 were from sales and
nh = marketing, 9 were from Finance, 54 were from Packing
 plant, 22 were from Material management, 61 were from
n1 production departments, 1 was from Head of risk
n1= = 188* 15 ÷ 353 = 7.988
 management, 1 was from manager, 1 was from assistant
Where n1 is sample size for sales and marketing manager, and 1 from supervisor, which results in a
n2 response rate of 87.5%, 100%, 75%, 84.6%, 83.5%,
n2= = 188* 17 ÷ 353 = 9.059 100%, 100%, 100%, 100% respectively. In general, out of
 192 likert scale questionnaires including 5 open ended
Where n2 is sample size for finance questioners 157 were returned which provides 82%
n3 response rate.
n3= = 188* 135 ÷ 353 = 71.8972

Where n3 is sample size for packing plant
n4 Respondents’ demographic information
n4= = 188* 48 ÷ 353 = 25.5626
 As shown in Table 5, 157 (100%) of the respondents
Where n4is sample size for material management were male and Zero of the respondents was female.
n5 Based on the information, the authors can infer that all
n5= = 188* 138 ÷ 353 = 73.4973
 respondents were male. This implies that there is no work
Where n5 is the sample size for production. force diversity which is not good for the organization
since it seems gender biased. The level of education
127(80.9%), 30(19.1%) and 0(0%) were First degree,
Method of data analysis second degree and above and Diploma and below
respectively. Based on the information the majority of the
Since this paper is the descriptive type of study, to achieve the
objective of the study, collected data were examined with the help respondents’ educational levels were first degree. This
of Statistical Package for Social Scientists (SPSS) 20Version. indicates that the organization is competitive in terms of
These descriptive statistics variables were analyzed using having educated man power. The experience of the
frequency and percentage. respondents were 84(53.5%), 67(40.5%) and 32(42.7%)
were greater than 6 years, 3 to 5 years and.0 to 2 years
Validity and reliability respectively. So, this implies that majority of work
experiences of the respondents were greater than six
Kothari (2004), states that Pilot testing was done to check the years.
48 Afr. J. Bus. Manage.

Table 4. Response rate.

Sales and Packing Material

Finance Production Head, RM Manager Ass.Mgr Supervisor Total
Marketing plant Mgt
Distributor 8 9 72 26 73 1 1 1 1 192
Returned 7 9 54 22 61 1 1 1 1 157
Response Rate 87.5% 100% 75% 84.6% 83.5% 100% 100% 100% 100% 82%
Source: own survey, 2020.

Table 5. Demographic profile of the respondents.

Gender of respondents
Frequency % Valid % Cumulative %
Valid Male 157 100.0 100.0 100.0

Respondents’ Level of Education

Frequency % Valid % Cumulative %
First Degree 127 80.9 80.9 80.9
Valid Second degree and above 30 19.1 19.1 100.0
Total 157 100.0 100.0

Work Experience
Frequency % Valid % Cumulative %
0 to 2 years 6 3.8 3.8 3.8
3 to 5 years 67 42.7 42.7 46.5
Valid
Greater than 6 years 84 53.5 53.5 100.0
Total 157 100.0 100.0
Source: own survey, 2020.

Table 6. Perception of respondents on strategic objective.

The company considers risk management control among its strategic objectives
Frequency % Valid % Cumulative %
Strongly Disagree 7 4.5 4.5 4.5
Neutral 41 26.1 26.1 30.6
Agree 69 43.9 43.9 74.5
Valid Strongly Agree 40 25.5 25.5 100.0
Total 157 100.0 100.0
Source: Own computation, 2020.

Perception of respondents on general risk that, risk management control was one of the strategic
management practice objectives of Dangote cement factory Ethiopia.
The company has clear risk management strategic
As shown in Table 6, the existence of risk management plan, in the above Table 7, 2.5% responded strongly
control as one of the strategic objective, 7(4.5%) disagree, 15.3% said disagree, 20.4% said Neutral,
respondents were strongly disagree 0(0%) respondents 43.9% said agree and 17.8% of the respondents were
disagree, 41(26.1%) respondents neutral, 69(43.9%) said strongly agree. So most of the respondents agree
respondents agree and 40(25.5%) of the respondents 43.9 on the statement of the company has clear risk
were strongly agreed respectively. The result showed management strategic plan while the 2.5 least. This
 Negero and Bona 49

Table 7. Perception of respondents on strategic plan.

The company has clear risk management strategic plan

Frequency % Valid % Cumulative %
Strongly disagree 4 2.5 2.5 2.5
Disagree 24 15.3 15.3 17.8
Neutral 32 20.4 20.4 38.2
Agree 69 43.9 43.9 82.2
Valid Strongly Agree 28 17.8 17.8 100.0
Total 157 100.0 100.0
Source: Own computation, 2020.

Table 8. The Company has established risk management committee under each department.

The company has established risk management committee under each department
Frequency % Valid % Cumulative %
Strongly disagree 38 24.2 24.2 24.2
Disagree 48 30.6 30.6 54.8
Neutral 16 10.2 10.2 65.0
Agree 45 28.7 28.7 93.6
Valid
Strongly Agree 10 6.4 6.4 100.0
Total 157 100.0 100.0
Source: Own computation, 2020.

Table 9. There is brief risk management framework and guideline.

Company’s has brief risk management framework and guideline

Frequency % Valid % Cumulative %
Strongly disagree 13 8.3 8.3 8.3
Disagree 29 18.5 18.5 26.8
Neutral 26 16.6 16.6 43.3
Agree 53 33.8 33.8 77.1
Valid Strongly Agree 36 22.9 22.9 100.0
Total 157 100.0 100.0
Source: Own computation, 2020.

implies that company has declared clear risk management existence of risk management committee under each
strategic plan. department in the company.
Respondents were requested to perception whether The researcher continued to request whether there are
there is established risk management committee under brief risk management framework and guidelines in their
each department of the company and their responses respective companies and the responses were as
were in the Table 8 where 24.2% (38) of them strongly tabulated in Table 9 and, it can be seen that only 8.3%
disagreed and 30.6% (48) disagreed while 10.2% (16) of (13) strongly disagreed, 18.5 % (29) disagreed while
them were still not certain whether there exists 16.6% (26) of them were neutral that there are brief risk
established risk management committee under each management framework and guidelines in their
department or not. In contrast, 27.7% (45) of the respective companies. But, 33.8 % (53) and 22.9 % (36)
respondents agreed 6.4% (10) of them strongly agreed of them agreed and strongly agreed respectively that
even. From these results, it can be seen that majority of there are brief risk management framework and
the respondents were not sure (not agreed) with the guidelines. And, it can be observe that most of the
50 Afr. J. Bus. Manage.

Table 10. The Company policy encourages training programs in the area of risk
management.

The Company’s policy encourages training programs in the area of risk mngt
Frequency % Valid % Cumulative %
Strongly disagree 16 10.2 10.2 10.2
Disagree 33 21.0 21.0 31.2
Neutral 25 15.9 15.9 47.1
Agree 51 32.5 32.5 79.6
Valid Strongly Agree 32 20.4 20.4 100.0
Total 157 100.0 100.0
Source: Own computation, 2020.

Table 11. The Company has standardized risk management process flow that clearly understood by all members of the company.

The company has standardized risk management process flow that clearly understood by all members of the company
Frequency % Valid % Cumulative %
Strongly disagree 19 12.1 12.1 12.1
Disagree 39 24.8 24.8 36.9
Neutral 30 19.5 14.0 51.0
Valid
Agree 59 37.6 37.6 88.5
Strongly Agree 10 6.4 6.4 94.9
Total 157 100.0 100.0
Source: Own computation, 2020.

respondents agreed or strongly agreed that their disagree, 8.9%(14) disagree on the statement, 13.4%(21)
existence of brief risk management framework and were neutral, 32.5% (51) were agreed and 41.4% (65)
guidelines. were strongly agreed on the statement of the effective
The company’s policy encourages training programs in risk management system enhance the performance of
the area of risk management, in the above Table 10, the company.
10.2% responses strongly disagree, 21% said disagree, The perception of the Respondents was requested on
15.9% said Neutral, 32.5% said agree and 20.4% of the Effective and appropriate risk management tools
respondents were said strongly agree. So most of the available in the company in the Table 13 4.5% (7) of
respondents were agree 32.5 on the statement of the them strongly disagreed and 2.5% (4) disagreed while
company policy encourages training programs in the area 35% (55) of them were still neutral. In contrast, 25.5%
of risk while the least 10.2. This implies that company’s (40) of the respondents agreed and only 32.5 % (51) of
policy highly encourages training in the areas of risk them were strongly agreed. From these results, we can
management to control risk will occur in the companies. see that majority of the respondents were whether
The company has standardized risk management effective and appropriate risk management tools
process flow that clearly understood by all members of available in the company or not available.
the company; as depicted in Table 11, 12.1% (19) of the As illustrated in the Table 14, 8.5% (13) and 17.8% (28)
respondents were strongly disagree 24.8% (39) were of respondents strongly disagree and disagree
disagree,19.5% (30) of them neutral, 37.6% (59) respectively on the existence of well planning done to
respondents were agreed with the statement and 6.4% perform risk management in the company; while 31.2%
(10) were strongly disagree. This implies that the greater (49) of respondents shared their views by neutral and
part of the respondents were agreed with the company agreeing to the statement of a well planning and 11.5%
has standardized risk management flow within the (18) of the respondents strongly agreed.
company and briefly understandably by all members. As far as stakeholder involvement is concerned, 22.3%
The researcher requested the respondents on the (35) and 42% (66) of respondents disagree and neural
effective risk management practice enhance the respectively to the existence of stakeholder involvement
performance of the company, the respondents forwarded in the planning of risk management; 24.2% (38) and
their responses as Table 12; 3.8% (6) said strongly 11.5% (18) of respondents agree and strongly agree
 Negero and Bona 51

Table 12. Effective risk management system enhances company’s performance.

Effective risk management system enhance company’s performance

Frequency % Valid % Cumulative %
Strongly disagree 6 3.8 3.8 3.8
Disagree 14 8.9 8.9 12.7
Neutral 21 13.4 13.4 26.1
Agree 51 32.5 32.5 58.6
Valid
Strongly Agree 65 41.4 41.4 100.0
Total 157 100.0 100.0
Source: Own computation, 2020.

Table 13. Effective and appropriate risk management tools available in the company.

Effective and appropriate risk management tools available in the company

Frequency % Valid % Cumulative %
Strongly disagree 7 4.5 4.5 4.5
Disagree 4 2.5 2.5 7.0
Neutral 55 35.0 35.0 42.0
Valid
Agree 40 25.5 25.5 67.5
Strongly Agree 51 32.5 32.5 100.0
Total 157 100.0 100.0
Source: Own computation, 2020.

Table 14. Respondents’ perception towards risk management planning.

There is well planning done to perform risk management

Frequency % Valid % Cumulative %
Strongly disagree 13 8.3 8.3 8.3
Disagree 28 17.8 17.8 26.1
Neutral 49 31.2 31.2 57.3
Agree 49 31.2 31.2 88.5
Valid
Strongly Agree 18 11.5 11.5 100.0
Total 157 100.0 100.0

Concerned stakeholders are involved in the planning and performing of managing risk.
Frequency % Valid % Cumulative %
Disagree 35 22.3 22.3 22.3
Neutral 66 42.0 42.0 64.3
Agree 38 24.2 24.2 88.5
Valid
Strongly Agree 18 11.5 11.5 100.0
Total 157 100.0 100.0

Trainings are planned to team members in the company on how to handle risk / uncertainties
Frequency % Valid % Cumulative %
Strongly disagree 21 13.4 13.4 13.4
Disagree 14 8.9 8.9 22.3
Neutral 45 28.7 28.7 51.0
Valid Agree 57 36.3 36.3 87.3
Strongly Agree 20 12.7 12.7 100.0
Total 157 100.0 100.0
Source: Own computation, 2020.
52 Afr. J. Bus. Manage.

Table 15. Respondents’ perception towards risk monitoring and controlling.

Companies are monitored and controlled based on the results

Frequency % Valid % Cumulative %
Disagree 27 17.2 17.2 17.2
Neutral 43 27.4 27.4 44.6
Valid Agree 67 42.7 42.7 87.3
Strongly Agree 20 12.7 12.7 100.0
Total 157 100.0 100.0

Risks that are already faced in the project are controlled in line with the goal and objective of the Company
Frequency % Valid % Cumulative %
Strongly disagree 7 4.5 4.5 4.5
Disagree 24 15.3 15.3 19.7
Neutral 37 23.6 23.6 43.3
Valid
Agree 81 51.6 51.6 94.9
Strongly Agree 8 5.1 5.1 100.0
Total 157 100.0 100.0

Risk Monitoring and controlling processes in the Company complies with the standards and procedures
Frequency % Valid % Cumulative %
Disagree 14 8.9 8.9 8.9
Neutral 58 36.9 36.9 45.9
Valid Agree 67 42.7 42.7 88.5
Strongly Agree 18 11.5 11.5 100.0
Total 157 100.0 100.0
Source: Own computation, 2020.

respectively to concerned stakeholders involved in the monitored and controlled according to the risk analysis
planning and performing of managing risk As shown in and responses results.
Table 14, the perception of the respondents on the Another interesting statement posed by the researcher
statement; Trainings are planned to team members in the to know whether risk monitoring and controlling was no at
company on how to handle risk / uncertainties, 13.4% the expense of their company’s goals and objectives
(21) of the respondents were strongly disagree, 8.9% rather inline and supportive and the respondents
(14) were disagreed on the statement, 28.7% (45) were reactions were as summarized in Table 15, where only
neutral, 36.3% (57) and 12.7% (20) of the respondents 4.5% (7) of them strongly disagreed, 15.3%(24) of them
were agreed and strongly disagree respectively. were disagreed and 23.6% (37) of them were neutral.
But, 51.6% (81) of the respondents had agreed and 5.1
From the above result, the researcher came to %( 8) strongly agreed that risks were monitored and
understand that majority of the respondents believed that controlled in line with the goals and objectives of the
they were no sure well planning and stakeholder’s companies. Therefore, it is deductible that majority of the
involvement done to perform risk management in the respondents agreed that risks are monitored and
company and great part of the respondents agreed that controlled in line with the goals and objectives of the
trainings are planned to team members in the company company.
on how to handle risk. The perception of the respondents were requested by
Table 15 shows, the distributions of the reactions of the researcher who wanted to be reacted whether risk
respondents to whether projects in the respective monitoring and controlling practices were in compliance
companies‟ projects are currently monitored and with the standards and procedures and the respondents
controlled as per the results of the risk management reacted as summarized in Table 15. As per to this Table
results and it can be seen that 17.2% (27) of them 15, 8.9% (14 of them disagreed but 36.9% (58) of them
disagreed while 27.4% (43) of them remained Neutral. were not sure or neutral whether risk monitoring and
42.7% (67) agreed and 12% (20) strongly agreed. This controlling practices were in compliance with the
implies that, majority of the respondents agreed that standards and procedures. But 42.7% (67) of the
projects in the respective companies are currently respondents agreed and the remaining 11.5% (18
 Negero and Bona 53

strongly agreed. From these results, we can infer that practices were not in compliance with the accepted
greater number of the respondents was agreed to risk standards and procedures. It can be concluded that the
monitoring and controlling practices were in compliance company under discussion need to practice risk
with the standards and procedures of the perspective monitoring and control as per standards and procedures
company. available in risk management theories.
The most department which is familiar with risk in the
company were Packing plant workers (employees),
Conclusions production department, Material management(store),
operational management, sales department, finance,
mechanical department (workshop area) etc, are familiar
The key objective of this study is to evaluate risk with the concept of risk, while the risk management
management practice in Dangote cement factory in department has responsibility to reduce or mitigate these
Ethiopia, the following conclusion are forwarded on the types of risk happened in the company.
finding mentioned above about practice followed in these
company. The findings of the study discovered that risk
management control is one of the major strategic
objectives of their companies. RECOMMENDATIONS
They also added that their risk management strategies
plan is clearly implemented and an already established Grounded on the conclusions of the research, the
risk management committee exists at company level. But researcher suggested the below mentioned
the establishment of a risk management committee at recommendations:
department level is not yet organized by company and
the finding of the result showed irregularity as far as 1) The companies should implement the risk
handling of uncertainties that occur within the companies. management practice (control) strategies and guidelines
In conclusion then is that departmental risk management with the involvement of all companies team members and
committees would be well organized and works on the stakeholders.
basis of regularity. 2) The Dangote cement factory in Ethiopia should provide
There is no systematic approach or a careful planning awareness creation and continuous training regarding
done to perform risk management in the company. risk and its management system especially the
Although the representation of relevant stakeholder was department risk probability to happen; packing plant
not most horrible, their involvement was not sufficient (employees).
enough. Majority of the respondents believe that expert 3) To minimize the severity and frequency of the risk in
judgment or meetings is not considered while planning of the companies is better to establish risk management
risks. The study concludes that risk management control at department level and risk supervision
planning should be done with experts to bring the desired committee.
results. 4) The company should give awareness to safety
All team members do not play a role in identifying risks. department to be properly matured and fulfill the
Enterprise doesn’t use the available method of risk personal, prospective equipment (PPE) for employees.
identification adequately. The majority of source of risk in 5) Since in the company risk happened in everywhere
the company is packing plant risk followed by material especially safety, physical disabilities and death of the
and credit risks. employees; the Dangote cement factory in Ethiopia
Risk responding processes are carried out by first should better have safety supervision for staff committee
properly identifying and allocating, in a well-defined 6) The company should be save from harm of employees
manner and considering factors like budget, schedule from death risk, cement damage around the area of
and resources to avoid or minimize the negative of risks loading and land erosion risk with the factory bolt to save
while improving its positive side. There existed no well- the company from repetition risk.
developed strategy to respond to risk but Controlling and
reducing is the method most commonly practiced to
respond to or mitigate risks that happened to occur in CONFLICT OF INTERESTS
their companies. In conclusion, risk mitigation strategies
need to be properly developed and implemented. The authors have not declared any conflicts of interests.
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