Dirk J. Geldenhuys

Implementing an Operational Risk Management Framework: Psycho-Social Factors in Tanzania

This qualitative study explored the psychosocial factors that affect the implementation of an operational risk management framework in a financial institution in Tanzania. A purposive sample of 39 participants from three financial institutions was interviewed using semistructured interviews. The data were analysed by means of qualitative content analysis and the open coding procedure of grounded theory was used to identify the highlighted themes. Findings suggest that there is a movement in Tanzania towards acknowledging the value of regulatory operational risk management practices, policies and procedures. Organisations that acquire cross-border interests should take cognisance of the psychosocial factors that affect the implementation of an operational risk management framework in order to address similar challenges.

A call for trust in cross border business

Organisations expanding their business to African countries place particular emphasis on risk management and tend to follow known practices applicable to their own context. An investigation was conducted into the experiences of the implementation of a risk management framework involving indepth interviews with role-players of an East African subsidiary of a South African financial institution. This research studied the impact of socio-cultural differences on the implementation of a risk management framework in East Africa and in particular considers the role and influence of trust. The implementation of risk management practices is often experienced negatively, and the importance of trust as a key element in the process is frequently not sufficiently considered. The management of risk should not only be based on financial criteria, but should also be influenced by psychosocial factors. Disregarding an important factor such as trust is counterproductive to risk management risk.