SYSTEMATIC RISK MANAGEMENT PRACTICES AND FINANCIAL SUSTAINABILITY: THE MEDIATING ROLE OF DECISION-MAKING EFFECTIVENESS

Abstract

Study aim to investigate the influence of systematic risk management practices on financial sustainability through improving decision-making effectiveness. The study also investigated the moderating role of risk culture. Data was collected from employees of manufacturing company’s using convenient sampling technique. Used SPSS and Smart PLS software for descriptive and inferential statistics. PLS-SEM results shown that risk management process and risk management methods and activities have positive and significant effect on financial sustainability and decision making effectiveness. This indicates that structured risk systems provide managers with reliable information, leading to more informed and effective strategic and operational decisions. Furthermore, decision making effectiveness also positively influence to financial sustainability, which is highlighting its central role in strengthening financial outcomes. Mediation analysis confirms that decision-making effectiveness partially mediates the relationship between risk management practices and financial sustainability, suggesting that risk management improves sustainability both directly and indirectly through enhanced decision quality. Lastly, risk culture also significantly moderates between decision-making effectiveness and financial sustainability. Study with these findings is contributed a integrated framework where risk management practices, decision-making effectiveness, and risk culture collectively increases the financial sustainability of manufacturing firms. These findings provide important theoretical and practical implications for strengthening risk-based management systems in manufacturing organizations. Study limitations and future directions were also discussed.