Risk Culture and Communication, Risk Response Strategies, and Operational Performance of Listed Multinational Companies in South-West Nigeria

Abstract

Risk culture and communication constitute the informal institutional infrastructure through which formal ERM policies become lived organisational realities, while risk response strategies provide the tactical vehicles through which risk awareness is operationalised; yet their individual contributions to operational performance in emerging-market multinationals remain insufficiently evidenced. This study examined the effect of strategic risk culture and communication, and the relationship between risk response strategies, on the operational performance of listed multinational companies (MNCs) in South-West Nigeria. A cross-sectional field survey design was employed using a structured questionnaire administered to senior and middle management employees of selected MNCs. From a population of 51,286 employees, a sample of 528 was determined via the Krejcie and Morgan (1970) table, of which 499 usable copies were analysed with Partial Least Squares Structural Equation Modelling (PLS-SEM) in SmartPLS 3 (5,000 bootstrap resamples). The measurement model satisfied all psychometric thresholds (AVE ≥ 0.500; CR ≥ 0.861; HTMT < 0.850), and collinearity diagnostics were negligible (all VIF = 1.000). Risk culture and communication exerted a significant positive effect on operational performance (β = 0.365, t = 10.115, p < 0.001, R² = 0.133), and risk response strategies likewise exhibited a significant positive relationship (β = 0.314, t = 7.931, p < 0.001, R² = 0.099), with medium effect sizes (f² = 0.154 and 0.109 respectively). The findings confirm that the cultural-communicative and tactical-executive dimensions of ERM independently enhance process efficiency, service continuity, and output quality. The study concludes that risk culture functions as the systemic enabler of ERM effectiveness and recommends structural cultural embedding, role-specific risk competency programmes, and the upgrade of static risk registers to real-time, intelligence-led response architectures.