ROLE OF RISK MANAGEMENT IN A TEXTILE PRODUCTION COMPANY
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ROLE OF RISK MANAGEMENT IN A TEXTILE PRODUCTION COMPANY
1. Introduction.
The introduction gives a basic outline of the research. The primary goal of the research is stated below, as are the study’s preliminary findings.
1.1 Background.
Over the last few decades, risk management has played an important part in the administration and management of a company’s product and lines of business. Many unplanned events occur during the daily operations of a firm, both inside and internationally.
Globalisation and technological advancements have contributed to increased rivalry in all corporate environments. This makes it tough to manage, run, and visually inspect a company’s product during its entire life cycle.
Practical and proactive efforts must be done to limit or eliminate the potential hazards that these elements may bring to businesses. Firms must take a proactive approach to recognising the many elements that have a negative impact on the firm and the product.
The full range of beneficial influences must also be considered. As a result, risk management is an important theoretical framework in modern business.
Production capacity in Ghana’s textile sector has decreased over time. It was the mainstay of the economy in the 1970s and 1980s, but it has declined in operation, with the number of big and medium-sized textile production enterprises falling from sixteen (16) in the mid-1970s to four (4) as of 2005 (Stiftung 2006, 137).
This is because most companies have stopped down their production lines. The majority of workers lost their jobs. Ghana Textile Print (GTP) produced a high-quality textile brand and has competed with multinational textile enterprises.
The company closed its spinning and weaving sections, laying off many of its employees. Juapong Textile, like other enterprises in the industry, went into administration and totally shut down its production lines.
It briefly reopened under the name Volta Star Textiles but couldn’t keep up with competition. The majority of enterprises that remain in business are thought to import raw materials.
Printex is one such company, with production reported to be below capacity. Akosombo Textile Limited (ATL), the only surviving local textile company, faces comparable issues (The Africa Report, 2012).
This study examines the prospect or function of risk management in Ghana’s textile producing business. Printex Ghana Limited and Akosombo Textile Limited are both heavily marketed.
It was decided to concentrate on the production industries because the textile sector is too broad to be studied. The risks facing the country will be examined, as well as potential solutions.
The primary goal of the research cannot be achieved without first determining the sources of risk and the nature of exposure. Risks will be assessed in relation to the country under discussion, Ghana (only case firms).
The future of Enterprise Risk Management in the industry will be considered with the use of modern risk management because it has distinct characteristics that allow it to identify risks, measure their consequences, and take action such as transferring or mitigating the risks (Crouhy, Gakai, & Mark 2006, 1).
True, risk management has advanced in rich countries, but there is little or no attention on its future possibilities in emerging nations. This leads in poor patronage or usage by enterprises in certain countries. Ghana is not the exception.
It is extremely risky to operate in such contexts since developing countries are especially vulnerable to unexpected fluctuations in interest rates, exchange rates, and commodity prices. It is more unclear and hazardous because corporate operations and rules do not follow a consistent pattern.
1.2 Objective of the Study
Internal and external causes lead to a decrease in economic activity in the Gujarat textile sector. As a result, this study will uncover all of the potential contributing factors to this reduction.
Efforts will be made to analyse the role of risk management in order to manage all risks that are likely to have a negative impact on the business operations of the organisations under consideration.
This study will primarily focus on the function of the textile production businesses’ risk management departments (if any) in detecting those hazards. It will also consider the importance, time, and resources that the organisation devotes to the role risk management.
Its importance to profit maximisation cannot be underestimated. Changes in the industry’s risk management practices over the years will be identified. The effects (both positive and negative) on the company’s overall operation and progress will be considered.
The current threats to companies in this area will be identified. Suggestions and recommendations will be offered to enable the organisation to be proactive and take pragmatic and comprehensive steps to minimise or mitigate the identified risks’ impact on business operations.
One of the most significant components of this research is determining who makes key choices about risk management in the organisation. The total proportion of the budget devoted to risk management will also be required to evaluate whether the company places a high value on the job of the risk management department (if any).
1.2 Research Questions.
Many analyses and possible causes have been linked to the scourge in Ghana’s textile producing business, but no practical and constructive initiatives have been devised to mitigate the harmful consequences of the variables that contribute to the problem.
Following thorough consideration, a comprehensive risk management method or system must be designed to assist in the resolution of the problem. Implementing risk management can prevent future incidents.
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