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					TOPIC RISK MANAGEMENT AND PERFORMANCE OF SMALL SCALE BUSINESS
                          IN UGANDA

           CASE STUDY: JAZZ SUPERMARKET BUGOLOBI




                              BY



                       MWANJA AGGREY
                       07/U/11247/EXT

                   BACHELOR OF COMMERCE




A RESEARCH REPORT SUBMITTED TO MAKERERE UNIVERSITY IN PARTIAL
 FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF A DEGREE OF
                   BACHELOR OF COMMERCE




                           MAY 2011


                               i
                                        DECLARATION
I Mwanja Aggrey declare that this research is my original work and that it has not been presented
to any other university for any award

Signature……………………………………..……
Date…………………………………………………




                                                i
                                          APPROVAL
This is to certify that this research has been submitted with my approval

Signed…………………………………………….
Date………………………………………………..

Mr. MBIDDE HENRY.




                                                ii
DEDICATION

To my mum, Jackson, all family members and friends.




                                            iii
                                  ACKNOWLEDGEMENT
I extend my sincere gratitude and appreciation to all those who assisted me in making this
research. I thank God for the guidance, love he gave to me.

I thank my supervisor Mr. Mbidde Henry for his tireless effort in guiding me on what to do in
this research

I also thank Jackson my brothers and friends for their guidance encouragement care and support
extended to me during this research writing




                                               iv
                                                      TABLE OF CONENTS
DECLARATION............................................................................................................................ i

APPROVAL .................................................................................................................................. ii

ACKNOWLEDGEMENT ........................................................................................................... iv

TABLE OF CONENTS ................................................................................................................ v

LIST OF TABLES ....................................................................................................................... xi

ABSTRACT ................................................................................................................................. xii



CHAPTER ONE ........................................................................................................................... 1

1.0 Introduction ............................................................................................................................... 1

1.1 Background ............................................................................................................................... 1

1.2 Problem statement ..................................................................................................................... 2

1.3 Purpose of the study .................................................................................................................. 2

1.4 Objectives of the study.............................................................................................................. 2

1.5 Research Questions ................................................................................................................... 2

1.6 Scope of the study ..................................................................................................................... 3

1.6.1 Subject scope ......................................................................................................................... 3

1.6.2 Geographical scope ................................................................................................................ 3

1.6.3 Time scope ............................................................................................................................. 3

1.7 Significance of the study........................................................................................................... 3



                                                                        v
CHAPTER TWO .......................................................................................................................... 4

LITERATURE REVIEW ............................................................................................................ 4

2.0 Introduction ............................................................................................................................... 4

2.1Definitions.................................................................................................................................. 4

2.1.1 Risk management ................................................................................................................... 4

2.1.2 Risk ........................................................................................................................................ 4

2.1.3 Performance ........................................................................................................................... 4

2.1.4 Small scale business ............................................................................................................... 5

2.2 Risk management ...................................................................................................................... 5

2.3 Risk management process ......................................................................................................... 5

2.3.1 Identification 0f risk ............................................................................................................... 5

2.3.2 Risk assessment ..................................................................................................................... 5

2.3.3 Risk mitigation option............................................................................................................ 6

2.3.4 Risk management plan ........................................................................................................... 6

2.3.5 Implementation of risk ........................................................................................................... 6

2.4 Risk management options ......................................................................................................... 6

2.4.1 Risk avoidance ....................................................................................................................... 6

2.4.2 Risk reduction ........................................................................................................................ 7

2.4.3 Risk sharing ........................................................................................................................... 7

2.5 Different kinds of risk ............................................................................................................... 7

2.5.1 Inflation risk ........................................................................................................................... 7
                                                                         vi
2.5.2 Political risk ........................................................................................................................... 7

2.5.3 Operation risk......................................................................................................................... 8

2.5.4 Foreign exchange rate risk ..................................................................................................... 8

2.5.5 Systematic risk ....................................................................................................................... 8

2.5.6 Interest rate risk...................................................................................................................... 8

2.5.7 Commodity price risk ............................................................................................................ 8

2.5.8 Unsystematic risk ................................................................................................................... 9

2.6 Risk tolerance............................................................................................................................ 9

2.7 Risk management techniques .................................................................................................... 9

2.7.1 Option .................................................................................................................................. 10

2.8 Risk measurement ................................................................................................................... 10

2.9 Performance ............................................................................................................................ 10

2.9.1 Performance of small scale business.................................................................................... 10

2.10 Small scale business .............................................................................................................. 11

2.10.1Features of small scale business ......................................................................................... 11

1.10.2 Factors that affects small scale business performance ....................................................... 12

2.10.3 Government policies and discrimination ........................................................................... 12

2.10.4 Shortage of working capital ............................................................................................... 12

2.10.5 Shortage of raw material .................................................................................................... 13

2.10.6 Inadequate management capabilities ................................................................................. 13

2.10.7 Shortage of technical skills ................................................................................................ 13
                                                                       vii
2.11 Relation ship between risk management and performance of small scale business ............. 13



CHAPTER THREE .................................................................................................................... 14

METHODOLOGY ..................................................................................................................... 14

3.0 Introduction ............................................................................................................................. 14

3.1 Research design ...................................................................................................................... 14

3.2 Sampling design ...................................................................................................................... 14

3.2.1Study population ................................................................................................................... 14

3.2.2 Sample size .......................................................................................................................... 14

2.2.3 Sample procedure................................................................................................................. 15

3.3 Data source.............................................................................................................................. 15

3.3.1 Primary data ......................................................................................................................... 15

3.3.2 Secondary data ..................................................................................................................... 15

3.3.3 Data collection instrument ................................................................................................... 15

3.4 Data processing and analysis .................................................................................................. 15

3.5 Limitations of the study .......................................................................................................... 16



CHAPTER FOUR ....................................................................................................................... 17

DATA PRESENTATION INTERPRETATION AND FINDINGS ....................................... 17

4.0 Introduction ........................................................................................................................... 17

4.1 DEMOGRAPHIC CHARACTERISTICS .............................................................................. 17

                                                                      viii
4.1.1 Gender of the respondents ................................................................................................... 17

4.1.2 Age distribution of respondents ........................................................................................... 18

4.1.3 Education levels of the respondents ..................................................................................... 18

2.1.4 Number of customers attended to every day........................................................................ 19

4.1.5 Number of times stocked every month ................................................................................ 20

4.1.6 Position held......................................................................................................................... 21

4.2        Specific responses on the variables................................................................................... 21

4.2.1 Risk management ................................................................................................................. 21

4.2.2Risk management affects performance of businesses ........................................................... 22

4.2.3 Any problem faced when managing risk ............................................................................. 23

4.2.4 Responses on options used in managing risk ....................................................................... 24

4.2.5 Responses on kinds of risk businesses face ......................................................................... 24

4.2.6 Response on problems faced by businesses when managing risk ....................................... 25

4.3 specific responses on other variables ...................................................................................... 26

4.3.1 Record keeping affects the performance.............................................................................. 26

4.3.2 Other problems which affects the performance of small scale businesses .......................... 27

4.5 Responses on other problems which affects the performance of businesses .......................... 28



CHAPTER FIVE ........................................................................................................................ 29

DISCUSSION CONCLUSION AND RECOMMENDATION............................................... 29

5.0 Introduction ............................................................................................................................. 29
                                                                       ix
5.1 Summary of findings............................................................Error! Bookmark not defined.29

5.2 Conclusion .............................................................................................................................. 29

5.3 Recommendations ................................................................................................................... 30

5.4 Suggested areas of further research ........................................................................................ 30



QUESTIONNAIRES .................................................................................................................. 31

REFERENCES ............................................................................................................................ 35




                                                                       x
                                                      LIST OF TABLES
Table 1: gender of the respondents ............................................................................................... 17

Table 2: Age distribution of respondents ...................................................................................... 18

Table 3: Education levels of the respondents ............................................................................... 19

Table 4: Number of customers attended to everyday ................................................................... 19

Table 5: Number of times stocked ................................................................................................ 20

Table 6: position held.................................................................................................................... 21

Table 7: performance of small scale business............................................................................... 22

Table 8: risk management affects the performance ...................................................................... 23

Table 9: any problem faced when managing risk ......................................................................... 23

Table 10: options used in managing risk ...................................................................................... 24

Table 11: responses on kinds of risk ............................................................................................. 25

Table 12: Responses on problems faced when managing risk ..................................................... 26

Table 13: record keeping affects the performance of businesses ................................................. 27

Table 14: other problems affecting businesses ............................................................................. 27




                                                                     xi
                                         ABSTRACT
The purpose of the research was focused on poor performance of small scale business especially
super markets (Jazz super market Bugolobi), it was to examine the relation ship between risk
management and performance of small scale businesses in Uganda, what problems small scale
businesses face when managing risk and the performance of small businesses. The study focus
on risk management is the cause of poor performance of small scale businesses.


The study was across sectional survey that utilized both random and purposive sampling design
and total of 52 respondents who were workers in super markets picked from selected super
markets.


Frequencies and percentages were used to analyze the data collected .The findings indicated that
risk management affects the performance of small scale businesses. The study indicates that high
inflation rates, increasing commodity prices, are the major constraints faced when managing risk.
The study also indicated that risk reduction, risk sharing are the main options to be used in
managing risk
The study indicated other problems which affect the performance of business include
competition, poor storage, poor cash management, inadequate labor, inadequate capital,
inadequate technology, high transport cost


The study recommends that super markets should put more emphasis on risk reduction and risk
sharing methods in order to reduce on the loss of money in businesses and help to catch up with
good performance of the business




                                               xii
                                          CHAPTER ONE

1.0 Introduction
Under this chapter an analysis is done of the background to the study, problem statement purpose
of the study ,objectives of the study ,research questions ,scope of the study and significance of
the study .

1.1 Background
Risk management is the identification assessment and prioritization of risk followed by
coordination and economic application of resources to minimize, monitor and control a
probability and impact of occurrence of particular risk (Nassaver Frank and pausenberger
Etherified).

Risk is an event that result into loss of money and causes availabilities in business cash flow
(Nassaver Frank and Pausenberger etherified ).The risk management have affected the
performance of small scale businesses it lead to the collapse.

Performance is the going process that involves managing the criteria for which an institution
agency or project can held accountable (Dannie tice and Catherine conneron 2000).Small scale
business need to identify and assess the risk they face through risk management process in order
to be financially well of .Criteria as component part of the internal system and cover the
institution ability to control financial expenses and satisfy staff.

Small scale business is the business employing less than five employees but with maximum of
fifty employees (Izere Eppy 2004).

Jazz super market is located at Kiswa village bugolobi Nakawa division along old port bell road.
It started in 2009 and mainly deals in foodstuff, soft drinks and cosmetics. Jazz has faced a big
problem in managing its operations which is evidenced with increased prices and low profits,
this as a result has affected its financial performance. This is the reason why the researcher has to
go the field to find out the solutions to the problem.




                                                   1
1.2 Problem statement
Despite the important roles played by SSB in economic development performance is poor.
Though there are measures put in place like risk sharing, risk retention to curb down the
situation, the problem still exist as evidenced by pay less super market in bugolobi.This is
probably caused by risk management problem. If this continues the business will drop out.

 1.3 Purpose of the study



The aim of this research is to identify the causes of risks faced by SSBs in Uganda and how
these as a result affect their performance. With that the study will address issues of risk
management in order to measure the extent of risk management on performance of small scale
businesses.

1.4 Objectives of the study
1. To find out which problems small scale business face when managing risk.

2. To find out the financial performance of Small scale businesses

3. To establish the relationship between risk management and performance of small scale
business.




1.5 Research Questions
1. What are some of difficulties faced by small scale businesses in managing risk?

2. What is the performance of small scale businesses?

3. What is the relationship between risk management and              performance of small scale
businesses?




                                                2
1.6 Scope of the study

1.6.1 Subject scope
The study focused on the effect of risk management on the performance of small scale
businesses in Uganda.

1.6.2 Geographical scope
Geographically the study covered Mbuya parish in Nakawa division with high concentration of
Jazz super market kiswa bugolobi. It was because of high concentration of super market in
Mbuya parish.

1.6.3 Time scope
The study took 12 weeks to be completed.

1.7 Significance of the study
1 The findings of the study are to improve on the researchers, knowledge as far as risk
management and performance of small scale businesses in Uganda is concerned.

2 The study was useful to the jazz super market and employees to under stand why prices of
commodities change.

3 The study helped the researcher to fulfill the partial requirements for the ward of bachelor
degree of commerce of Makerere University




                                              3
                                          CHAPTER TWO

                                     LITERATURE REVIEW

2.0 Introduction
This chapter reviewed related literature on study variables as put forward by different authors .it
will focus on risk management as independent variable and performance of small scale business
as dependent variable.



2.1Definitions

2.1.1 Risk management
Risk management is the identification assessment and prioritization of risk followed by
coordination and economic application of resources to minimize, monitor and control a
probability and impact of occurrence of particular risk ( Nassaver Frank and pausenberger
Etherified 1964).



2.1.2 Risk
Risk is an event that results into loss of money and causes availabilities in business cash flow
(Nassaver Frank and Pausenberger etherified 1964).The risk management have affected the
financial performance of small scale businesses it lead to the collapse.




2.1.3 Performance
Performance is the going process that involves managing the criteria for which an institution
agency or project can held accountable (Dannie tice and Catherine conneron 2000).Small scale
business need to identify and assess the risk they face through risk management process in order
to be financially well of .Criteria as component part of the internal system and cover the
institution ability to control financial expenses and satisfy staff.


                                                   4
2.1.4 Small scale business
Small scale business is the business employing less than five employees but with maximum of
fifty employees (Izere Eppy 2004).




2.2 Risk management
Risk management is the identification assessment and prioritization of risk followed by
coordination and economic application of resources to minimize, monitor and control a
probability and impact of occurrence of particular risk (Nassaver Frank and pausenberger
Etherified 1964).



2.3 Risk management process
According to (Nassaver Frank and pausenberger Ehrenfied 1964) risk management processes are
risk identification, risk assessment, risk management plan and implementation as discussed
below.




2.3.1 Identification 0f risk
This is refers to process of preventing event of variable that when triggered with cause problems
and identification of risk start with the source of problem for example threat of using money or
customer.




2.3.2 Risk assessment
Risk assessment is the assessment of potential severity of loss and probability of occurrence .But
the quantities can either be simple to measure or impossible to know/measure.




                                                5
 2.3.3 Risk mitigation option
This is the process of selecting an option that minimizes the impact of risk o business and such
option may include, To avoid risk all together by not undertaking any activity or closing down
the highest risk business .

Transferring the risk to the external agency such as insurance company

Accepting some level of risk since risk cannot be eliminated all together




2.3.4 Risk management plan
This is the process which involves the selection or creation of appropriate controls to measure
interest .




2.3.5 Implementation of risk
This process involves mitigating the effect of risk for example purchasing insurance policies for
the risk that have been decided to be transferred to the third party .

Avoided the risk that can be avoided without scarifying the organization goals.




2.4 Risk management options
This refers to the options used tot manage risk and there are mainly ,risk avoidance ,risk
reduction risk sharing ,risk retention




2.4.1 Risk avoidance
.This is option which involves not entering into any business in order to risk of loss associated
with it .it also involves withdraw from risk business and this involves not earning profits.


                                                  6
2.4.2 Risk reduction
It involves reducing the severity of loss.This involves accepting loss or benefit when it occurs
.this is where all risks that cannot avoided can be retained by the default




2.4.3 Risk sharing
This is involves sharing the risk with another party from a burden of los or benefit from
particular risk .it is also involves transferring the risk to the third party like insurance company.




2.5 Different kinds of risk



2.5.1 Inflation risk
According to (Jack D Glen 1993 international financial corporation) ,both inflation and its
uncertainty influences the planning       horizon of firms and their commitment           to financial
management .Typically high inflation is volatile inducing firms to devote more resources to the
task of financial management ,it also forces firms to shorten their planning horizon . High
inflation reduces the maturity range of available financial instruments which limits the ability of
firms o deal with currency exposures beyond a short horizon.




2.5.2 Political risk
This is the     risk which due to weakness of political system and adverse socio economic
conditions in a county for example strikes, riots, political instabilities.




                                                   7
2.5.3 Operation risk
This is risk that the business experiences when it does not operate as foreseen and it is mainly
caused by failure to meet the operating criteria (operating cost) business operating below
anticipated capacity level.




2.5.4 Foreign exchange rate risk
Business generating revenue in local currency involves this kind of risk which are related to the
availability and value of foreign exchange for servicing the debt.




2.5.5 Systematic risk
Investopedia explain systematic risk occurs as a result of interest rates, recession and wars
because they affect the entire market and cannot be avoided through diversification .And system
risk can be mitigated only by being hedged. (www.investopedia.com).




2.5.6 Interest rate risk
The interest rate is very important indicator of the economy .it is key component of cost of
capital for any business organization, the rising interest rate may burden to any business
organization, it may increase the cost and may affect the profitability of the business activity .the
falling interest rate may erode capital for investors and lenders who provides funds for the
business activities




2.5.7 Commodity price risk
Due to uncertainties of harvest, rain and economic factor the supply of commodities is not
regular. due to uncertainties supply factors ,the price of commodities fluctuates a lot ,farmers and



                                                 8
manufacturers may suffer due to high fluctuations in the of commodities .This risk can be limited
by apply risk management strategies like going for commodity futures and options.




2.5.8 Unsystematic risk
This is the risk that arises of uncertainty which are unique to individual securities /firms and this
risk can be reduced by diversification of the business and it is caused by changes in management,
financial challenges, price changes.




2.6 Risk tolerance
Risk tolerance is a function of an individuals psychological make up as well as other factors,
including a person s current insurance courage and cash reserves .Risk tolerance is affected by
an individual family situation and by age .risk tolerance is also influenced by ones current net
worth and income expectations, specifically individual with higher income are more likely to
undertake risk since their incomes can help to cover any short fall. Individuals with 25 years old
select a moderate to high risk strategy because his job income will probably grow over time
further, given his young age and income growth potential, low risk strategy is inappropriate fore
his retirement fund goal .And individuals with 65 year old will want earning less risk exposure
than 25 year old since his earning power from employment will soon be ending(frank k Reilly
and Keith C Brown).




2.7 Risk management techniques
Risk management instruments are known as derivative securities as they are derived from certain
underlying transactions and the derivative instruments include forward and futures        contracts.
forward contracts is an agreement to exchange two cash position at a single known future date
.Generally no cash is exchanged at time contract is made only at the forward date . Forward
contract is used if two cash position are different currencies and it can be used to fix the cost of


                                                 9
a foreign exchange transactions .Also forward contract based on commodity prices can be used
to manage commodity prices exposures (Jack D Glen international financial corporation 1993).




2.7.1 Option
According to( Jack D Glen 1993) an option an asset gives the buyer the right to buy or sell the
underlying asset at a fixed price over a fixed period of time . these include s put option which
gives the right to sell ,and call options gives the right to buy . However some options permits the
buyer to buy or sell up to the expiration date (American option )while others only at the
expiration date (European option ).And options are sold both over the counter by the financial
institutions and on organized exchanges.




2.8 Risk measurement
Risk is measured by use of variance and standard derivation of the estimated distribution of
expected returns . Standard deviation is a measure of depression of the possible out comes
(frank K Reilly and Keith C Brown investment analysis and portfolio management).




2.9 Performance
Performance refers to an on going process that involves managing the criteria for which
institution, agency or project can be held accountable (Danniel Tice and Catherine conneron
2000).




2.9.1 Performance of small scale business
Performance of small scale business is not easy. A great the percentage of small scale business
(61%) do not keep records, (23%) keep a half records and (16%) keep complete records
(Ugadev/Accord 1988).

                                                10
Profits as a measure for financial performance of small scale business may not be misleading but
also inaccurate where the figures are given this is because such information is treated as
privileged and given to outsiders of the business with few adjustment because he they want to
avoid taxes (Harper 1984/ Chichster John Wiley and sons).

On the other hand, costs may be misleading because as in the case of some small scale
businesses, they may have been improperly calculated because of lack of skills.

The use of profits to measure financial performance of small scale business is constrained
because of lack of availability. Small scale business do not have this information, however others
which have it may not have been reached by compiling the data.




2.10 Small scale business
Small scale is business employing less than employees but with           maximum of fifty (50)
employees (izere eppy 2004).




2.10.1Features of small scale business

      Small scale business lack both financial and managerial resource as well as varying level
       of expertise in functional areas (liedholn 1990).

      Also small scale business lack competent managers and this is because they use less
       capital (harper 1984).

      Also to that small scale business lack planning in areas of sales and finances which pay
       an important role in sustaining small scale business.




                                                11
1.10.2 Factors that affects small scale business performance
Since 1980s small scale have increased in number and are now regarded vital in playing roles to
increase job creation ,improved competitiveness but there are many factors affecting their
performance (Cater and Cannon 1992).

According to Balunywa w 1998 small scale businesses are affected by factors which include,
financing ,human resources product markets and business environment .

According to [Parker and Torres (1994)], Small scale business is being affected by marked size,
economic conditions, and physical infrastructures like roads, buildings, and government
interference.




2.10.3 Government policies and discrimination
Government polices favors large scale business than small scale business where of this polices
affect them either directly or indirectly fore example import duties ,licensing and registration .the
tariff structure discriminates against small scale business many of its capital and intermediate
inputs are classified    as consumed goods while large scale business is granted investment
incentives on imports (Honsohm Dirk ,1992).




2.10.4 Shortage of working capital
According to Liedhom,(1994),the shortage of working capital was a problem in Lesotho and
more pressing problem that lack of fixed capital ,high cost and according to liedhom and Mead
,(1986) said that lack of credit is regarded as a problem to enter the small scale business and it is
accepted that small scale business are largely financed by the owners and have little access to
credits and if they get have to pay high interest rates.




                                                  12
2.10.5 Shortage of raw material
This is mainly originated from shortage of foreign exchange or local currency in case of those
using locally produced raw materials though they face supply problems as well because of
ecological degradation and at times oligopolistic market structure.




2.10.6 Inadequate management capabilities
Management performance at all levels and in all management (functions, product quantity,
marketing and financing .mostly managed by one person in small scale businesses) does not have
the standards that ensures business efficiency (Liedhohm 1992)




2.10.7 Shortage of technical skills
Well trained and competent technical personals are in short supply especially in small scale
business because of low level of remuneration to attract them (liedhohm 1992).




2.11 Relation ship between risk management and performance of small scale business
Effective risk management can improve on strategic planning and decision making And it can
create significant value through out the enterprise especially when implemented as part of a
united governance, risk and compliance solution .with out effective quantitative cost and benefit
analyze organization are often unprepared t recognized critical risk, analyze risk reward trade
offs and respond well (www.28sap.com/mk/tc).




                                                13
                                    CHAPTER THREE

                                     METHODOLOGY

3.0 Introduction
This chapter is adscription of the research methods to be employed in the study .it is going to
cover the research design sampling design , data collection, data processing, and analysis the
final anticipated problems .




3.1 Research design
Cross section research design was used by researcher in choosing an appropriate research design
which focused on the relationship between risk management and small scale business.




3.2 Sampling design



3.2.1Study population
The study population consisted of 60 owners and employees of selected super markets operating
in Mbuya parish Nakawa division. It was because the number of owners and employees are not
known of these super markets in Nakawa division.




3.2.2 Sample size
The sample size of 52 were appropriate for research .simple random technique was used. The
sample size consisted 30 super market managers and cashiers.




                                              14
2.2.3 Sample procedure
The researcher obtained the letter of introduction from the university and he carried the copies of
the letter and the questionnaires to the selected super markets and after when questionnaires were
completed was collected by the researcher.




3.3 Data source



3.3.1 Primary data
Self administered questionnaires and the interview guides to the respondent were used to get data
from the primary source.




3.3.2 Secondary data
Primary data was not enough to get some aspects like back ground, literature review as some
references was got from text books.




3.3.3 Data collection instrument
The researcher used questionnaires to collect data from the super market on the study of risk
management and performance.




3.4 Data processing and analysis
The questionnaires which were collected were compiled, sorted, and edited in order to get
required quality and accuracy data. Questionnaires data were analyzed using statistical package
for social scientists computer package.




                                                15
3.5 Limitations of the study



      Inadequate response from respondents was a challenge faced by the researcher as
       respondents were not willing to give out information.

      The funds were not enough for researcher to carry out tough research as the researcher
       wanted to travel to different places but due to limited finance researcher failed to full fill
       that.

      The researcher had little time due to the day of submission of research so he ended not to
       gather all the information he wanted to complete his research




                                                16
                                        CHAPTER FOUR

             DATA PRESENTATION INTERPRETATION AND FINDINGS

4.0 Introduction
This chapter represents and explains surveyed data results on the risk management and
performance of small scale businesses in Uganda .The following are the findings




4.1 DEMOGRAPHIC CHARACTERISTICS
52 Questionnaires were distributed to the selected supermarket’s staff; only 45 responses were
filled and received back representing 86.5%.




4.1.1 Gender of the respondents
Findings on the gender of respondents were considered and can be evidenced in the table below

Table 1: gender of the respondents

   Sex             Frequency       Percentage

   Male            17              38

   Female          28              62

   Total           45              100

   Source primary data surveyed for question 1

   From the table above that (17) 38% of the respondents were male and (28) 62% female but
   the gender has large influence of supermarket as the study targeted different workers and
   most of them were female and indicates that more female are employed /work in
   supermarkets than male.


                                                17
4.1.2 Age distribution of respondents
The study studied different age groups of respondents in order to establish most group as the
respondents were asked to state their age as in table below.




Table 2: Age distribution of respondents

   Age group              Frequency            Percentage

   18-20                  9                    20

   21-24                  20                   44.4

   25-28                  9                    20

   28 and above           7                    15.6

   Total                  45                   100

   Source primary data surveyed for question 2

The table above shows that 20% of respondents are aged (18-20), 44.4% of respondents are in
group of (21-24), 20% of respondents are (25-28), 15.6% of respondents are aged 28 and above
and this means that supermarkets employs workers of aged 21-24 .




4.1.3 Education levels of the respondents
The study was interested in the education of the respondents so as to find out the skills of those
who work in the supermarkets




                                                18
Table 3: Education levels of the respondents

   Education levels            Frequency             Percentage

   Degree                      13                    28.9

   Diploma                     11                    24.4

   Certificate                 21                    46.7

   Total                       45                    100

   Source primary data surveyed for question 3

The table above shows that 46.7% of the respondents were certificate holders, 28.9% degree
holders, 24.4% diploma holders hence since the respondents were educated can be concluded
that they qualified to participate in decision making and to run the supermarkets in good ways
and this however, means that supermarkets employs with certificates than degrees and diploma.




2.1.4 Number of customers attended to every day
The researched was to find out the number of customers who go to shop from the supermarkets
everyday

  Table 4: Number of customers attended to everyday

   Customers attended to            Frequency               Percentage

   10-20                            3                       6.7

   21-30                            13                      28.9

   31-40                            9                       20

   41-50                            5                       11.1

   51 And above                     15                      33.3

   Total                            45                      100

   Source primary data surveyed for question 4
                                                19
The table above shows that 6.7% attend to 10-20 customers, 28.9% respondents attend to 21-30
customers, 20% 0f respondents attend to 31-40 customers, 11.1% of respondents attend to 41-50
customers 33.3%0f respondents attend to 51and above customers everyday . However, this
indicates that most supermarkets attend to 51 and above customers everyday and supermarkets
are averagely doing well in business sector




4.1.5 Number of times stocked every month
The researcher was interested to find out number of times most supermarkets stock in their
businesses




Table 5: Number of times stocked

   Number of times stocked             Frequency         Percentage

   One time                            5                 11.1

   Two times                           22                48.9

   Three times                         11                24.4

   Four times                          7                 15.6

   Total                               45                100

   Source primary data surveyed for question 5

The table above shows that 11,1%of respondents stock one time, 48,7% respondents stocks two
times 24.4%respondents stock three times 15.6% respondents stock four times every month and
this indicates that most of the respondents stock two times every month which signifies that
businesses are doing averagely.




                                              20
4.1.6 Position held
The study was interested to know the positions held by different workers in different
supermarkets and he came up with the following




Table 6: position held

      Position held           Frequency          Percentage
      Cashier                 29                 64.4
      Cleaner                 8                  17.8
      Bag keeper              5                  11.1
      Asikali                 3                  6.7
      Total                   45                 100
      Source primary data surveyed for question 6
The table 4.2.6 shows that 64.4% of respondents are cashiers 17.8%of respondents are cleaners
11.1% of respondents are bag keepers 6.7% of respondents are Asikali and this indicates that
most workers who work in supermarkets work as cashiers and these people had the necessary
information for the research objectives since they are included in managing risk in business




4.2       Specific responses on the variables
The researcher used frequency tables to shows specific responses on the study variable and the
following were the findings




4.2.1 Risk management
The researcher was interested to finding out why risk management is a problem to performance
of small scale businesses in Uganda.




                                                21
Table 7: Performance of small scale business

   Performance            Frequency                 Percentage

   Excellent              2                         4.4

   Very good              14                        31.1

   Good                   26                        57.8

   Fair                   3                         6.7

   Total                  45                        100

   Source primary data surveyed for question7

The tables above shows that 4.4% of respondents responses that businesses are doing excellent
31.1%of respondents respond that businesses are doing very good 57.8%of respondents respond
that businesses are doing good 6.7%of respondents respond that businesses are doing fair. .The
general performance of small scale businesses in Uganda is good with respondents of 57.8%
which indicates that the businesses in Uganda are progressing in the ways of managing risk




4.2.2Risk management affects performance of businesses
The researcher was interested to finding out whether risk management affects the performance of
small scale




                                               22
Table 8: Risk management affects the performance

     Risk          Frequency          Percentage
     management

     Yes           42                 93.3

     No            O3                 6.7

     Total         45                 100

     Source primary data surveyed for question 8

From the table above indicates that 93.3 of respondents respond that risk management affects the
performance of small scale businesses in Uganda and 6.7%respondents respond that risk
management has no effect on the performance of small scale businesses.




4.2.3 Any problem faced when managing risk
The researcher was interested to finding out if respondents find any problem when managing risk
and come up with the following in the table below

Table 9: Any problem faced when managing risk

Problem       Frequency         Percentage

Yes           43                95.6

No            02                4.4

Total         45                100

     Source primary data surveyed for question 9

The table above indicates that 95.6% of respondents face problems when managing risk and
4.4%of respondents face no problem while managing risk


                                               23
4.2.4 Responses on options used in managing risk
The study was finding out which options respondents used in managing risk and the following
options were rated as below using strongly agree (SA) agree (A) strongly disagree(SD) disagree
(D)




Table 10: Options used in managing risk

                               SA            A                 SD              D

       Option           Freq    %     freq       %      freq        %   freq   %

       Risk Reduction   18      40    20         44.7   2       4.4     1      2.2

       Risk Sharing     12      26.7 22          48.9   5       11.1    4      8.8

       Risk             11      24.4 11          24.4   10      22.2    12     26.7
       Avoidance
                        4       8.9   14         31.1   10      22.2    12     26.7
       Risk Retention

      Source primary data surveyed for 10

      From the table above indicates that 40%of respondents strongly agree with risk reduction
      option 26.7%of respondents strongly agree with risk sharing option 24.4%of respondents
      strongly agree with risk avoidance option 8.9%of respondents strongly agree with risk
      retention and this however indicates that risk reduction option is the major option used
      managing risk.




   4.2.5 Responses on kinds of risk businesses face
      The study was to finding out the types risk businesses face in Uganda and the rated using
      frequency and percentage table using strongly agree (SA) Agree(A) strongly disagree(SD)
      disagree(D)

                                                   24
Table 11: Responses on kinds of risk

                           SA               A                  SD                      D

   Kind              freq        %     freq      %         freq %               freq              %

   Political Risk     4         8.9    11       24.4       5        11.1    17             37.8

   Inflation          26        57.8   14       31.1       2        4.4     2              4.4
   Risk

   Interest rate      6         13.3   22       48.9       6        13.3    6              13.3
   Risk

   Foreign            7         15.6   16       35.6      7         15.6    8              17.8
   exchange
   Risk

   Source primary data surveyed for question 11

From the table above 8.9% of respondents strongly agree with political risk 57.8% strongly agree
with inflation risk 13.3% respondents strongly agree with interest rate risk 15.6% respondents
strongly agree with foreign exchange rate risk and findings indicates that the inflation risk is the
major kind of risk faced by business sector in Uganda which affects the performance .




4.2.6 Response on problems faced by businesses when managing risk
The study was interested to find out problems which business sector face while managing risk
and respondents responded to them and there are rated showing strongly agree (SA) Agree(A)
Strongly disagree(SD) Disagree(D)as below




                                                25
Table 12: Responses on problems faced when managing risk

                                  SA             A                SD               D

 Problem                   freq    %        freq      %      freq      %      freq     %

 Political Instability        7    15.6     6         13.3   14        31.1   10       22.2

 High Inflation rates       21     46.7     15        33.3   3         6.7    2        4.4

 High Interest rates          6    13.3     22        48.9   5         11.1   4        8.9

 Increasing Cdty price      31     68.9     9         20     2         4.4    1        2.2

   Source primary data surveyed for question 12

   Commodity (cdty)

The table above revealed that 15.6%respodents strongly agree with political instability
46.7%respondents strongly agree with high inflation rate 13.3%respondents strongly agree with
high interest rate 68,9%of respondents strongly agree with increasing commodity prices and
however indicates that increasing commodity prices is the major pressuring problem faced when
managing risk .




4.3 specific responses on other variables
The researcher used frequency tables to show specific responses on other variables




4.3.1 Record keeping affects the performance
The researcher was interested to finding out how record keeping affects the performance of small
businesses in Uganda and respondents’ responses were as using yes and NO as below




                                                 26
Table 13: Record keeping affects the performance of businesses

   Record keeping     Frequency           Percentage

   Yes                44                  97.8

   No                 01                  2.2

   Total              45                  100

   Source primary data surveyed for question 13

The table above shows that 97.8% of respondents know that record keeping affects the
performance of small scale businesses in Uganda and 2.2% does not know that recording
keeping affects the performance of small scale businesses in Uganda




4.3.2 Other problems which affects the performance of small scale businesses
The researcher was interested to finding out other problems which affects the performance of
small scale businesses in Uganda




Table 14: Other problems affecting businesses

   Other             Frequency     Percentage
   Problems

   Yes               37            82.2

   No                08            17.8

   Total             45            100

   Source primary data surveyed for question14



                                                27
From the table shows that 82.2% of respondents know that there are other problems which affect
the performance of businesses in Uganda apart form risk management and only 17.8% are not
aware of those other problems.




4.5 Responses on other problems which affects the performance of businesses
The researcher was interested to find out other problems from the respondent which affects the
performance of small scale businesses in Uganda and they mention some of other problems as
below

Competition, poor cash management, inadequate labor, poor storage, inadequate capital, price
instability, under payments, inadequate technology low, sales volume, poor packaging, transport
costs and weather.




                                              28
                                        CHAPTER FIVE

                  DISCUSSION CONCLUSION AND RECOMMENDATION

5.0 Introduction
This chapter presets a discussion and summary of the findings of the study it gives conclusion of
results in presented in chapter four and gives the recommendations arising from the findings of
the study and suggests areas of further research

5.1.1 Findings on the problems faced by small scale business when managing risk.

Findings from the research reveled that most of the respondents face problems when managing
risk and this is shown by a high percentage of 95.6% of the response. This therefore is a great
threat to the enterprise and hence the management should impart and .train there work force on
skills and knowledge of managing various risks. The management can also hire expatriates who
will develop policies and procedures that will be adhered with so as to curb risks.

5.1.2 Findings on performance of small scale business.

According to the research findings it has been revealed that the performance of business was
good and this is shown by a high percentage of 57.8% of the response. In, general therefore,
performance of small scale businesses in Uganda are good. The management should manage risk
appropriately because if it is curbed, the businesses will progress increamentally.

5.1.3 Findings on relationship between risk management and performance of small scale
business.

According to the research findings, the results showed that risk management greatly affects the
performance of small scale businesses in Uganda and this is showed by a very high percentage of
93.3% of the response. This shows that businesses can not progress well without managing risks
they encounter.




                                                   29
5.2 Conclusion

Based the findings ,it indicated risk management affects the performance of businesses
,increasing commodity prices ,high inflation rates which lead some businesses to drop out of the
business and make huge losses of money in the business sector.

The management of small scale business should therefore setup policies and procedures which
help to curb various risks. They should also train there employees on risk management.




5.3 Recommendations
Basing on the research findings the following recommendations are suggested to improve on
small scale businesses’ access to fight against risk

In order to reduce /fight risk affecting the performance of businesses, supermarkets should
emphasize the use of risk reduction method and risk sharing method to reduce on the loss of
money in businesses so as to catch up with good performance and avoid all the losses which can
occur in the business sector as they will not avoid all the risk all together in the business

Supermarkets should also emphasize good record keeping in order to know how the businesses
have been performing in the previous years so that it helps to improve on performance on the
current year.




5.4 Suggested areas of further research
Further research should attempt to collect data from the supermarkets respondents on risk
management and performance as this focused on small scale business in Uganda




                                                  30
                                          QUESTIONNAIRES
Dear respondent,

You are among the chosen ones to participate in conducting this research on the topic mentioned
above. The research aims at risk management and performance of small scale business.

The research is for academic purpose I therefore request you to spare some time and help me to
fill in these questionnaires. Your response are highly appreciated .Thank you for your
cooperation.

Part A

Name of the supermarket (option) ------------------------

Please tick the appropriate option that applies to you

1. Gender

Male                     Female

2. Age

18-20                    21-24

25-28                    28 above

3. Education qualification

Degree          Diploma                   Certificate

Others (specify)---------------------------------

4. How many customers do you attend to everyday

10-20           21-30             31-40

41-50           51 and above

5. How many times do you stock every month
                                                    31
One time                        two times

Three times                     four times

6. What position do you hold in the business organization?

Cashier               cleaner

Bag keeper            Askari

7. How does your business perform?

Excellent             very good

Good                  Fair

8. Does risk management affect the performance of your business?

Yes                   No

9. Do you face any problem in your organization/business while managing risk?

Yes                   No

Part B

Use the key below to answer the following questions

Strongly Agree4                 Agree3

Strongly2                       Disagree1




                                               32
10.what options do you use in managing risk?

                         4      3           2              1

Risk reduction

Risk sharing

Risk avoidance

Risk retention




11.what kind of risk do your organization /business face

                     4              3                2         1

Political risk

Inflation risk

Interest rate risk

Foreign
exchange risk




                                                33
12.what problems do your business face when managing risk?

                                        4      3          2                 1

Political instability

High inflation rate

High interest rate

Increasing commodity prices

13.Does poor record keeping affect the performance of your business

Yes                                No

14.Are there other problems which affect the performance of your business

Yes                                No

15.If yes please list some of those problems

1------------------------------------

2------------------------------------

3------------------------------------

4------------------------------------




                                                   34
                                        REFERENCES


Jack D Glen (1953) H street, NW, Washington international finance cooperation discussion
paper 17

Balunywa Waswa ( 1998) : Entrepreneur ship in small business

Harper (1984) Chichester Johsn wily & son small scale business in the third world.

Nassaver Frank and Pausenberger Ehrenfied (1964) RISK management.

Ezere Eppy ( 2004) : perceived information and credit accessibility by small scale firms finance

Frank, K Reilly and keith C. Brown: investment analysis and portfolio management

Parker and Torres (1994) Kenya result of 1993 National baseline survey micro and small
enterprises

Uganda development bank 1988 small scale industries in Kampala survey report by Uganda
development bank limited

The staff of the international bank for re construction and development / international monetary
fund (2005) Financial sector assessment a handbook:

Liedholm ( 1994) Lesotho micro and small enterprises




                                               35

				
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