Risk management, organisational resilience and financial performance of small businesses in the Central region

Abstract

The study examined the relationship between risk management, organisational resilience, and financial performance of small businesses in the Central Region. It specifically aimed to assess the influence of risk management on financial performance and to examine the mediating role of organisational resilience in this relationship. A post-positivist paradigm with a quantitative approach was adopted. The explanatory research design was used to examine the cause-and-effect relationship between the variables, and a cross-sectional survey design was employed to collect data from 270 owners of registered small businesses through stratified random sampling. A structured questionnaire was used to collect numerical data on a 5-point Likert scale. The study employed SMART PLS software for data analysis and specifically used PLS-SEM as the analytical technique for research objectives one and two. The results showed that both risk management and organisational resilience significantly enhance financial performance. Moreover, resilience partially mediates the relationship between risk management and financial performance, suggesting that resilient firms better translate risk strategies into strong financial outcomes. The study concludes that effective risk management and resilience systems are essential for sustaining growth and stability in uncertain environments. It recommends that policymakers and support agencies provide training and resources to strengthen these capabilities, while business owners should enhance risk governance, adaptive planning, and innovation. Future studies should adopt longitudinal and comparative approaches to deepen insights and inform practical interventions.