Impact of Perceived Business Risk on Organization Performance: An Integrated Risk Management Framework based on Internal Controls

  • Dr. Akmal Shahzad , Bushara Zulfiqar, Dr. Taseer Salahuddin , Sarah Qaim


The objective of this study is to investigate the mediating role of risk management between the perceived business risk and organization. To examine the proposed model of this study data was collected from the manager having at least 5 years’ experience in finance department or risk management department. Stratified sampling technique were used to collect data in this study. Two hundred and four (204) out of three hundred and eighty four (384) distributed questionnaire were received. To analyze the hypothesis, structural equation modeling (SEM) employed in this study to investigate the mediating role of risk management. The results of study reveal that perceived business risk have significant and positive impact on the formalization of risk management, internal controls and organization performance. Further to this, results also found that formal risk management methods and internal controls mediate between the perceived business risk and organization performance. It means that respondent perceived higher organization performance with formalized risk management methods and strong internal controls against the perceived business risk. This result may be generalized to other listed companies at PSX.