Question

Write an article on :
Influence of Human Capital on organizations performance as mediated by management Control system and Operation Risk Management.

The article should be within the last 4 years to date.

Answer 1

Influence of Human Capital on organizations performance as mediated by management Control system and Operation Risk Management

Introduction

Today, business in our world is experiencing systemic failures that affect the performance of the company. Mostly, through the use of financial measurements, corporate success is viewed at their level of effectiveness. Such organizational performance deficiencies are the product of fraud, theft, negligence, environmental hazards, and human error risk factors. Such activities include business risk, human capital, and oversight of management. Risk caused by uncertainty can affect business performance either positively or negatively (Project Management Institute (PMI), 2008). According to the research of Weeserik and Spruit (2018), however, risk management affects all sectors and it is true that most large firms have failed in the past.

Operational risk management is continuous risk management in human actions, process and systems, and external events (Weeserik & Spruit, 2018). It involves human capital in decision making and a deviation from a specified routine (Gygi & Williams, 2012). Operational risk management is a methodology to improve cost, technical performance, and schedule (Oehmen, Olechowsk, Kenley & Ben-Daya, 2014). In all these understanding, operational risk impacts on organizational performance. The elements of human capital or intellectual capital are considered as an intervening variable (Peprah, 2019)). It is a procedural way of alleviating the negative consequences of any phenomenon. The risk is benefited with some opportunities so firms need human intellectual capital who can manage the business process efficiently and effectively to impact organizational performance positively.

Channa, Abbasi, and Maheshwari (2015) comparative study between Islamic and Conventional Banks resulted in a mixture based on the relationship between operational risk management and organizational performance. The Islamic banks showed a negative non-significant relationship while the conventional banks resulted in a positive relationship. The statistical study treatment was t’ test and correlation. The data used were both primary and secondary financial data.

Method

The research design is a correlational study. It is a quantitative study that analyzes the data using parametric inferential statistics. This study's respondents were members of the Institute of Chartered Accountants, Ghana (ICA). According to data from ICA, Ghana, there were 4,390 chartered members in good standing as of May 2019 and 439 (10%) members were conveniently sampled for the study at a confidence interval of 95% based on Creative Research Systems survey software.

Results

Baron and Kenny (1986) noted that before mediation study is done the relationship between the independent variables and dependent variable must be established. The role of the mediator is to given an account of the relationship or explain why and an effect occurs. The study looked at the mediating effect of management control system and operational risk management on the relationship between human capital and organizational performance.

Discussion and Conclusion

The study have revealed that the null hypothesis which states that management control system and operational risk management do not mediate the relationship between human capital and organizational performance is rejected. The implication of these results is that, whereas human capital can directly predict organizational performance, a further boost to this prediction is obtain on organizational performance when management control system and operational risk management is introduced in to the equation. Their individual effect has been found to be significant.