Effect of Environmental Risk, Reputational Risk, and Legal Risk on the Performance of Manufacturing Companies

Abstract

The continuous collapse of manufacturing companies due to poor management of risks such as environmental risk, reputational risk and legal risk. This calls for urgent attention of researchers. This paper considered the effect of environmental risk, reputational risk, and legal risk, on the performance of manufacturing companies. The researcher employed an exploratory research design. Logit Binary regression model was employed to test the hypotheses of the study. This model is considered appropriate because it has the ability to predict the effect of independent variables on the dependent variables. This study revealed that Environmental Risk; Reputational Risk; and Legal Risk has negative significant effect on the performance of manufacturing companies. This study recommended that management of manufacturing companies should pay greater attention to their Environmental Risk; Reputational Risk; and Legal Risk, by ensuring that such risks are proper managed with the aid of Enterprise Risk Management Tools and by providing actionable insights into their entire organisation. The manufacturing companies should endeavour to identify, analyse and evaluate Environmental Risk; Reputational Risk; and Legal Risk with Optimised Heat Maps and Charts and try to avoid or eliminate such risks.

Citation: Kayode Ogunlami and  Abdullahi Oyebanji Maroof (2021)   Effect of Environmental Risk, Reputational Risk, and Legal Risk on the Performance of Manufacturing Companies, European Journal of Accounting, Auditing and Finance Research, Vol.9, No. 8, pp.14-25

 

Keywords: environmental risk; reputational risk; legal risk, performance of manufacturing companies

Article Review Status: Published

Pages: 14-25 (Download PDF)

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