WERABE UNIVERSITY

DEPARTMENT OF MANAGEMENT COLLEGE OF BUSINESS

AND ECONOMICS

The role of insurance service for business growth (in case of

Werabe flour factory)
IN WERABE TOWN
Submitted By:
NAME ID NUMBER
1- ASRAT ALMAW 0139/12
2- ALEMU SEWNET 0083/12
3- ABAY TASFAW 0002/12
4- ASNAKECH MOGAS 0136/12
5- ASNAKECH MOGESSIE 0137/12
6- ATSEDE BIRHAN 0146/12
7- AMELEWORK FIKADU 0O99/12
8- ESHETIE TASFAYE 0299/12

Advisor: ABDILKERIM A. (MBA)

RESEARCH PROPOSAL TO SUBMITTED BUSINESS RESEARCH
METHOD COURSE COMPLETION

JUNE 2022
WERABE, ETHOIPA

1
 Acknowledgement
First and for most I would like to thank to god forgive me health and strength to reach
this stage and to become successes full I would like to express my deep gratitude to my
advisor Abdilkarim A. (MBA) for critics and his valuable time which made this study
possible
I would like to thanks ABAROS flour factory employees and managers who helped me
for the study by giving the necessary information what I went finally I would like to
thanks my friends for their supporting ideas.

Page 2
 Abstract
The study will be conducted to indicate the role of insurance service for business growth
on Abaros flour factory in Werabe town to achieve the objective of the study would use
to primary and secondary source structured and unstructured interviews as a data
collection tool for primary source and the secondary data were using document of the
organization and internet
The sampling techniques were census. The relevant data for the study will be analyzed by
a using a descriptive form of data
The result of analysis that will be revealed that Abaros flour factory before purchasing
insurance policy they are in a good position financially and the accident has decreased.
The research finds some limitation in study area like low education status, low
communication and training how to use machines and low protect themselves from
accident. So to overcome the problem the factory should work hard to give training and
communication.

3
Table of content Page No.

Acknowledgement............................................................................................................................i
Abstract............................................................................................................................................ii
Table of content...........................................................................................................................iii
Chapter one......................................................................................................................................1
Introduction......................................................................................................................................1
1.1. Back ground of the study..........................................................................................................1
1.2. Statement of the problem..........................................................................................................2
1.3.Research question......................................................................................................................2
1.4. Objective of the study...............................................................................................................2
1.4.1 Main objective....................................................................................................................2
1.4.2. Specific objective...............................................................................................................2
1.5 Description of the Study Area...................................................................................................3
1.6. Significance of the study..........................................................................................................3
1.7. Scope of the study.....................................................................................................................3
1.8. Limitation of the study..............................................................................................................4
1.9. Organization of the study..........................................................................................................4
2. Chapter two..................................................................................................................................5
2.1. Review of related literature......................................................................................................5
Concepts and definition of insurance..............................................................................................5
2.2. Basic characteristic of insurance..............................................................................................5
2.3. Requisition insurance................................................................................................................6
2.4. Benefits of insurance................................................................................................................6
2.4.1. Benefit of insurance to the society.....................................................................................6
2.5. Main causes for failure of business firm...................................................................................7
2.6. Methods /techniques/ for solving problems related to insurance.............................................8
2.6.1. Legal principle of insurance contracts...............................................................................8
2.6.1.1. Principle of indemnity................................................................................................8
2.6.1.2 Principle of insurable interest......................................................................................8
2.6.1.3. Principle of subrogation..............................................................................................8
2.6.1.4. Principle of utmost good faith....................................................................................9
Chapter three.....................................................................................................................10

Page 4
3. Research methodology...............................................................................................................10
3.1. Research design......................................................................................................................10
3.2. Source of data ……………………………………………………………………….
3.3. Population and sample size……………….……………………………………………
3.4. Data collection instrument......................................................................................................10
3.5.Data analysis, presentation and interpretation.........................................................................11
3.6. Ethical consideration..............................................................................................................11
Budget schedule.............................................................................................................................12
Time schedule................................................................................................................................13
Reference.......................................................................................................................................14

5
 CHAPTER ONE
Introduction
1.1. Back ground of the study
The establishment of business sector is to increase profit survival and economic
development of the country as well as the customer revenue. The organization forecast
and design strategies to achieve their goal and objective. However, the successfulness of
the business organization is mainly determined by various internal and external factors.
Insurance is an economic device for reducing and eliminating risk through the price of
combining sufficient number of homogenous exposures in to group to make the loss
predictable for groups as a whole (George 1995).
Insurance has an essential advantage as advice hand risk and sought to bring about the
greatest economic advantage to society (Assefa, 2004)
Most business organization face devotion from what they expected due to uncertainty and
probable occurrence of something un favorable in the course of their normal business
operation of organization which occurrence to the factory machineries or stock due to
peril, thunder, fire etc. There is exposure to the risk of the finished, raw materials and
even the machinery in the factory might probable be stolen (in the case for replacement
of this damaged equipment tools more time, cost of repair and loss of production) in this
regard different techniques tools strategy’s and process to avoid prevent reduce or
controlling method and other undesirable method or risk (Trieschmann, Hoyt and
Sommer, 2005)
Moreover it includes method that risk to improve understanding or awareness within the
organization of activities affecting exposure to risk these risk control method s are
exemplified by severity system to prevent un authorized entry or access to data by
training program to evaluate employees on technique to reduce the likely hood of injury
by sprinkles and other fire control system by developing and enforcement of codes
regulating constriction within the purpose of decreasing venerability of strains to force of
nature the principle of indemnity stands be restore to approximately the same financial
position that exist prior to loss (Regda,1998). Consequently the study will focus on the
role of insurance service for a business growth in werabe Abaros flour factory.
1.2 Statement of the problem
Insurance is a means of protection from financial loss or, it is a form of risk management
primary data will be used to hedge against the risk of contingent, uncertain loss. It has
evolved as a process of safe guarding the interest of people from loss and uncertainty.
Furthermore it contributes a lot to general economy growth of the company by providing
stability to the functioning of the process, reduce uncertainties by improving financial

Page 6
resource, providing safety and security, encourage saving promote economic growth,
medical support and spread risk.(Chand ,2015)
In fact it is non-sense to say every company can operate without any obstacle because
there are different factors that hinder companies from performing their business activity
like, accidental losses include thunder, fire, damage of equipment, health problem, and
unfavorable condition may cause failure to the firms. After sever loss occurs to the firms
they may not at least resume their partial operation. In short sever loss may adversely
affect the business firm from continuous growth and operation. Accordingly, this
research paper will try to investigate the role of insurance service conducted in Abaros
factory in Werabe town and its effect on business growth and answer equations that are
critical in assessing the role of insurance service for business growth Abaros flour
factory, those are:

1.3 Research question

1. How the insurance services assure continuous growth of the business firm?
2. What are the main causes that hinder the business firm from its growth and operation?
3. What are the methods that the factory uses in order to solve problems that are related to
insurance?
1.4. Objective of the study
1.4.1 Main objective
The main objective of the study is to examine and to show the role of insurance service
on growth of Abaros flour factory.
1.4.2. Specific objective
1. To show how the insurance companies assure continuous growth of the business
firm.
2. To identity the main causes that hinder the business firm from its growth and
operation.
3. To provide some ideals as a solution to solve the problem of the organization in
relation to insurance.

1.5 Description of the Study Area

Werabe is a city and separate town Administration in the Sn/n/r/p Region (or kill) of
Ethiopia. Located in the Siltie Zone at longitude and latitude
14°16′N39°27′ECoordinates: 14°16′N39°27′E with an elevation of 2457 meters above
sea level, below a high ridge to the west, Werabe is the last important Ethiopian city
south of the border with Gurage, and is considered to be a strategically important gurage
and them.
Abaros flour factory is the one and the leading agro industry in Werabe for producing
flour since 2000 E.C to local market and others need of their product it is found in eastern

7
of Werabe it starts its operation with the beginning capital of 200,000 birr of which
8000,000 for fixed asset sources from own invest (internal equity) and the remaining
from bank long term loan licensed as private as privet limited company with ownership
of one individual (CSA, 2007).
The factory buys insurance policy from NIB insurance company this company gives
different knows of service to the organization and the employee like lite insurance and
properly insurance from this service the factory buy both of them.
The factory is hiring labor force and placed as significant rose in economy through
opening job opportunity and source of revenue for the government through tax. Currently
the factory is operating with total number of 23 employees which is 4 women’s and 19
men’s the factory has and hours’ daily working hour bias.
1.6. Significance of the study
The main significant of this study is to understand the insurance service help the factory
to become competitive in market area and aware the organization about protecting or safe
guarding its proprieties or assess from potential risk. This research would also help the
other factories to be award about insurance company and its contribution to their business
growth.
It can be used as a secondary source for the coming generation, who want to study on
related topic as a reference and also enhance the researcher capability and develop
knowledge’s of the researcher through reading different books and references.
1.7. Scope of the study
Conceptually this study would focus on the role of insurance service on Abaros flour
factory; geographically this study would focus on Abaros flour factory which is found in
Werabe town at eastern part of Tigray region and methodologically the researcher would
use descriptive research design and would use both primary and secondary data. The
source of primary data will be employees and the secondary data would be gathered from
written materials.
1.8. Limitation of the study
During conducting this study there might be some limitation that would be raised from
different directions.
Regarding lack of sufficient and available source of data in the offices related to the title
of the study and lack of documentation make it even harder to complete this work. So
that the researcher would force to overcome the problem by allocating extra time to find
related information or data, either primary or secondary source from different source. The
time and cost constraint would also the major problems that would be faced during the
study. In order to control and simplify those problems the researcher would make to
manage proper and wise use of time and cost. Some respondents would not be easily
accessible. The researcher while conduct this study would use as systematic relation
through locked as a good face approaching polite and patient while meeting the right
respondent for study.
Page 8
1.9. Organization of the study
The study would be organized in Four chapters, the first chapter contains introduction
such as background of the study statement of the problem, research question, objective of
the study, description on the study area, significance of the study, scope of the study,
limitation of the study and organization of the study the second chapter contains related
review literature the third chapter contains research methodology, such as research
design, source of data, population and sample size and data collection instrument. The
fourth chapter contains data analysis and interpretation finally the last contains
conclusion and recommendation.

9
 2. Chapter two
2.1. Review of related literature
Concepts and definition of insurance

Insurance is the posing of fortuitous losses by transfer of such risk to insure, who agree to
indemnity insured for such losses to provide other pecuniary benefit on their occurrence
or vender service connected with the risk (Rejda, 1998).
As (Rejda,1995) insurance can be defined from two point of view firstly, insurance
defined from the view point of individual insurance is an economic device where by the
individual substituted as mall certain cost ( the premium ) for large uncertain financial
loss ( contingency insured against ) that would exist it were not for insurance. Insurance
is a protection against financial loss provide by an insurance the primary function of
insurance is dual point of view the purchase of adequate amount of insurance an above
eliminate the uncertainty regarding financial loss in the house hold burn dawn.
Secondly insurance defined from the view point of society insurance is economic device
from reducing and eliminating risk through the price combining a sufficient number of
homogeneous exposures in to a group to Mack the losses predictable for a group as a
whole insurance is a device by men of which the risk of two or more person or firm are
combined through actual or rolled contribution to a fund out of which claimants are paid
from the view point of the insured insurance combines the risk of many insured.
2.2. Basic characteristic of insurance
An insurance plan or arrangement typically has certain characteristic they include the
following like pooling of losses payment of for stations loss, risk transfer and
indemnification.
A pooling of losses or sharing losses is a heart of insurance pooling is the spreading of
losses incurred by the few over entire group so that pooling process, overage losses
subsisted for actual loss in addition pooling involves the group of large numbers can
operate to provides substantially occurrence prediction of future losses pooling implies,
The sharing of loss by the entire group and prediction of future losses with some
occurrence based on the law of large number (Trieschmann, Hoyt, summer, 2005)
Payment of fortuities a fortuities loss is one that is unforeseen and unexpected and
occurrence as result of chance in other word the loss must be accidental. (Rejda, 1998)
Risk transfer means that a pure risk transferred from the insured to the insure who
typically is in a stronger financial position to pay the loss than the insured from the view

Page 10
point of individual pure risk that are typically transferred to insurance include the risk of
premature death suits. (Trieschmann, Hoyt, summer, 2005)
Indemnification is final characteristics of insurance is indemnification for loss
indemnification for loss means that insured is restore to his or her approximate financial
position prior do the occurrence of the loss.( Rejad,1998).

2.3. Requisition insurance

In spite of the use farness of insurance in many context not all risk are commercially
insurable insurance normally insure only pure risk, however not all pure risk are insurable
certain requirement usually must be full filled before pure risk can be private insurer to
afar insurance for them are caused the requisitions of insurable risk that other may wish
to transfer to them to be considered approver subject of insurance certain character stick
should be present.

2.4. Benefit of insurance

As (Assefa,2004) concluded insurance has peculiar advantage as advice to handle risk
and so ought to be used to bring about the greatest economic advantages to the society.

2.4.1. Benefit of insurance to the society

The existence of insurance results a great benefit to the society the major social and
economic benefits of insurance included the following.
A. indemnification of loss;- indemnification permits individuals and families to be
restored to their former financial position after the loss occur.
Indemnification on the business firm also permit firms to remaining business and
employee to keep their jobs the community also benefits because it is a tax bases in not
restored or at least moved closer to their former economic position.
B. less worry and fear:- a second benefit of insurance is that worry and maple if a
family heads have adequate amount of life insurance they are less likely to worry and fear
reduce loss after and before loss occurrence since the insured know that they have
insurance that will pay for the loss.
C. reduce cost of capital:- because of the supply of investment fund is greater than it
would be without insurance capital is available at lower cost than would otherwise be
possible since total supplies of loan able fund is increased the advantage payment of
insurance premium the cost of capital to business firm that borrow is lower than it would
be balance of insurance.
D. source of investment fund:- the insurance industry is an important source of fund
for capital investment and accumulation premiums are collected in advance of loss and
fund not needed to pay immediate loss and expense can be loaned to the business firms
this fund are typically invested in factories.

11
E. loss controls:- another social and economic Vance of insurance lies in its loss
control or less prevention activates. Although the main function of insurance is not to
reduce loss but merely to spread losses among member of the insurance group.
F. Aid to small business:- insurance encourage capitation because without on
insurance industry small business could be less effective compotator against big business
would involvement risk d would be ales attractive out let for funds (Assefa,2004).

2.5. Main causes for failure of business firm

There are numbers of factors of factors that many hinder the company ability to grow
frivolers spending on marketing, lack of produce, expertise dump capital and in adequate
hires are amongst the biggest obstacles that will challenges the business in reacting full
potential business.(Stephnen,2010)
The short answer regardless of the industry failure is the result of either the lack of
management skill or lack of proper capitalization or both.(Gebretnsae,2003).
There are four main causes business for fail (Gebretnsae,2003).
Firstly poor management of cash flow: - is the main reason that small business fail it is
possible to have a paper profit but still have problems simply because there is in
suffusion cash flow to pay creditor poor cash flow may arise from significance increases
in stock debit incurred poor accounting by management and frailer to plan for capital and
or exceptional expenditure.
Secondly the loss of main trade account: - is causing a reduction in turn over and possible
fading profit another principal causes of business finding themselves in financial trouble
the business will often then after substantial discount of extended credit terms shin an
attempt to generate sales however this causes further pressure on cash flow un less a
business is in the fortunately position of being able to reduce overhead cost to
compensate for the loss of turn over. It is essential that the loss of major client is replaced
as soon as possible.
Thirdly lack of management control:- some other major reason why business find
themselves in difficulties all business need to have strategic plan to ensure that they are
operating in the best market with correct margin and adequate level of financial resource.
All often management spend too much limit dealing with day to day problems and so fail
to address these fundamental are issue lack of management control may result from
failure to develop a business firm plan filer to understand costs market and key customer,
failure to submit returns resulting in penalties an possible investigation allowing
customer un necessary discount wasting time funding of creditors and wasted
promotional expenditure.
Finally the fourth major courses of companies difficulty is inadequate or in appropriate
financing:- use of short term over draft for long term capital acquisition, failure to use
factoring facilities when sales are substantially increasing, inadequate share holder capital

Page 12
all contribute to cash flow problem this problem will become bad debit loss of principal
customer or business interruption occurs.

2.6. Methods /techniques/ for solving problems related to

insurance
2.6.1. Legal principle of insurance contracts
Insurance control are complex legal documents that reflect both general rules of low and
insurance low when buy insurance you expect to be paid for a covered loss weather you
can collect and amount paid are governmental by insurance law (Arthur,1981).

2.6.1.1. Principle of indemnity

The principle of indemnities that insured should not profit from covered losses but should
be restored to approximately the same financial position that exist prior to the loss
(Arthur, 1981)
The principle of indemnity has two fundamental purpose the first purposes is the
principle of to prevent the insured from profiting from insurance the insured should not
profit a loss occurs but should be restore to approximately.
Some financial position that exist before the loss the second is reduce moral hazard it
dishonest insured can profit from a loss, they may deliberately causes the loss with the
intention of collecting the insurance thus if the loss payment does not exceed the actual
amount of the loss. (Arthur, 1981)

2.6.1.2 Principle of insurable inte rest

A fundamental legal principal strongly support the principle of indemnity is that of
insurable interest, which holders that an insured must demonstrate personal losses or else
be unable to collect amount due when loss caused by an insured peril occurs insurable
interest it’s always a legal requirements an insurable interest involves relationship
between the person applying for insurance and this subject matter of insurance (Assefa,
2004).

2.6.1.3. Principle of subrogation

The principle of subrogation grows out the principle of indemnity according to
(assefa,2004) subrogation means the substitution in place of insured for the purpose of
calming indemnity from authored person for a loss covered by insurance. (Trieschmann,
Hoyt, Sommer, 2005)

13
 2.6.1.4. Principle of utmost good faith
An insurance contract if based un utmost good faith this means that a higher of honesty
is implied on both practice to an insurance contract that is implied on parties to other
contracts, this principle nails historical roots in ocean marine insurance (Assefa, 2004).

CHAPTER THREE
3. Research methodology
This is the main part of research because it is the frame work or it shows how the study is
carried out.
3.1. Research design
The study will be conducted in descriptive research design to describe the level of role of
insurance service for business growth in Walya flour factory in Adigrat town. Because
the common data collection and analysis methods applied consecutively are interview
and questionnaire, or the main purpose of the study is to describe the role of insurance
service for business growth on Abaros flour factory in Werabe town. The study would
use cross sectional (for 1 year) because data are collected at one point in at time from a
sample selected to describe some larger population of that time.
3.2 Source of data

The study will be used mainly two types of data source. These are primary and secondary
source of data. The primary data would be collected by both questionnaire and interview;
the questionnaire will be distributed to different employees. The data through interview
would collect from top managers, secondary data also would be collected from the
organization documents published, and unpublished materials.
3.3 Population and sample size

The most appropriate techniques that are employed to conduct the study is census
method. Census is account of all elements within the population, or it is complete
enumeration of all items in the population, particularly the population is too small. As the
study attempted to assess the number of employees in Walya flour factory of Adigrat
town are 23 and the study would take all members of employees.

3.4 Data collection instrument

The researcher will be used questionnaire for employee and personal interview for top
level manager. Questioner would be both open ended and closed ended and interview
would be both structured and unstructured. The questionnaire would distribute to all
employee and the other data were gathered from organization document, internet and
different sources.

Page 14
 3.5 Data analysis, presentation and interpretation
All the relevant data from the study would be collected to organize the data structured
and homogenous way. The collected data would editing, coding, presenting using tables,
graphics and would be analyzed using percentage. Accordingly, data would be organized
to make it suitable for further analysis and descriptive analysis would be used to examine
the finding of the study.

3.6 Ethical consideration

Letter of cooperation were obtained from Werabe university department of management
to the respective study population. Verbal and informs consent obtained from the
managers of concerned body’s by informing the purpose of the study. conserving the
right privacy of the respondent maintain the confidentiality of the identity each
participating in all cause the name would kept confidential.

15
 CHAPTER FOUR
4. Data presentation and Interpretation
This part deals with major findings of the study, all necessary data and information is
analyzed and the basic issues have given an appropriate treatment. In order to gather data
on the role of insurances for business growth of Abaros flour factory 23 questionnaire
have distributed for employees who are working in the organization. All 23 distributed
questionnaires were collected and the response of questionnaire is presented accordingly.
4.1 Demographic information of respondents
Table 4.1.1 sex of respondents
Gender no of respondent’s Percentage
Females
Males
Total
Source: Field Survey, 2016
Table 4.1.1 indicated that 19(82.60%) of sample respondents are males and other 17.40%
of respondents are females. This shows that the majority of workers in the factory are
male; this implies the number of females was few when compared with males in the
organization. So that the organization must give most opportunity for females that are
obtain the legal principle that indicates equal opportunity in gender.
Table 4.1.2 Age of respondent
Age group No of respondents Percentage
18-30
30-45
Above 45
Total
Source: Field Survey, 2016
The above table shows that most of respondents 10(43.48%) are in the age range of 18-
30, while many of them 8(34.78%) are between the age of 31-45 and few of employees
5(21.74 %) are found in range of above 45 years old. This indicates around half of factory
employees are found in the range of 18-30 and few employees of the factory are in the
age range of above 45 years.
Table 4.1.3 Educational level of respondent
Educational states No of respondent Percentage

Page 16
<6
7-2
Certificate
Diploma
Degree and above - -
Total

Source: Field Survey, 2016

The above table 4.1.3 shows that 9(39.13% of employees’ educational level is from 7-12
grade. The employees whose educational level is less than 6 grade are 5(21.74%), the
employees whose educational level have certificate are 6(26.09%) the employees that
have educational level of diploma are 3(13.04 %) and there is no employee having degree
and above. We can conclude that the majority educational level of employees in the
factory is from 7-12 grade. This indicates that the workers are not professional so the
organization must facilitate education for employees.
Table 4.1.4 General information about availability of insurance
Question Respondent
Yes Percentage No Percentage Total

1. Have you faced un favorable condition

before you purchase insurance policy
2. Did you get better improvement in your
performance after you purchase insurance
policy
3. If you answer is “yes” for question - - - - -
number “2” in which area
Source: Field Survey, 2016
The above table illustrates that 8(34.78%) of them faced unfavorable condition before the
company purchase insurance and 13(65.22%) of them responds that they didn’t face
unfavorable condition before they respondents purchase insurance policy. The data shows
that most of individuals or more than half of individuals doesn’t face unfavorable
condition before they purchase insurance. From the respondents 13(65.52%) said that
they are getting better improvement after they purchase insurance policy and 10(43.48%)
of them said that there is no any change before and after the company purchase insurance
policy. By looking the data found from the respondents it is possible to say insurance has
been the best alternative for having or improving good business performance and to
improve their growth.
Table 4.1.5 Level of service given by the insurance company
Question Unsatis Perce Satis Perce Very Perce Less % Total
factory Tags factory Tags Satis Tags Satis
factory factory
1. What is the - -

17
 level of
service
given by
insurance
companies
(concerning
protection
coverage)
2. If your
answer is
unsatisfacto
ry for
question no
“1” what
things
makes you
unsatisfacto
ry
Source: Field Survey, 2016
The above table 4.1.5 demonstrates that 15(69.57%) of respondent are satisfied by the
service given by the insurance company and 3(13.04%) of them are very satisfied and
also 5(21.74%) respondent are less satisfied by the service. This entails that greater than
half of respondents are satisfied with the service that is given by insurance company. So
as the data shows insurance companies give proper protection for insured factories.
Table 4.1.6 Contribution of insurance companies
Respondent
Question V. Per High Per Mediu Per Low Per Total
high centage centage m centage centage
1. How do you evaluate the
contribution of insurance
companies insolving
problems that have bad - -
effect on the growth of
your business
Source: Field Survey, 2016
The above table 4.1.6 confirms16( 69.57%) of the respondents agree with that of the
contribution of insurance in solving problems that have adverse effect on the growth of
their business is high, while 3(13.04%) respondents agree with that of it has Very high
contribution in solving problems. On the other hand, 4(17.39%) of respondent said that
the contribution of insurance companies is medium in solving problems. According to the
respondents in relation to contribution of insurance companies in solving problems that
have adverse effect on growth of business companies is not highly magnified. Generally

Page 18
the above data shows that most respondent express as contribution of insurance
companies is high in solving problems.
Table 4.1.7 the respondent attitude on important of insurance support on financial
problem
Questions Yes Percentage No Percentage Total
1. Have your organization
able to finance all potential
losses without insurance?
Source: Field Survey, 2016
Regarding importance of insurance 20(86.96%) of the current employees said that
without insurance the factory does not able to continue the business and able to overcome
loss. And the respondents who said that the organization cannot finance all potential loss
without insurance puts their reason by saying insurance companies creates better working
condition in the factory, and small number of respondents 3(13.04%) said the
organization can finance all losses without insurance. It can be concluded that insurance
is important to prevent losses in the factory by covering losses.
Table 4.1.8 Respondent attitude about loan taking from insurance companies
Questions Respondents
Yes Percentage No Percentage Total
1. Do you borrow money from insurance - -
companies
2. Do you believe that the amount of
insurance premium that the insurance
companies charge is fair?
Source: Field Survey, 2016
As revealed in the above table all 23(100%) of the respondent said that they are not
borrow money from insurance companies and majority of the respondents19 (82.61%)
are said that amount of insurance premium that the insurance companies charge is fair
while 4(17.39%) of respondent said the premium of insurance company is not fair, this
indicates that the amount of premium is almost fair otherwise the factories are unwilling
to purchase protection cover due to the amount of premium paid.
Table 4.1.9 Respondent attitude related to problems in business
Question Respondents responses
Yes Percentage No Percentage Total
1. Is there any problem that makes the
business firm to fail?
2. If your answer is yes for question - - - - -
number 1 list down some of them?

Source: Field Survey, 2016

According to the result presented in the above table small amount of the current
employees 4(17.39%) said that there is no any problem that makes the business firm to

19
fail to its operation but most of the employees 19(82.61%) said that there are many
problems that make business firm to fail, they also list those problems that makes the
business firm to fail are, employee dissatisfactory, bad working environment, in adequate
salary and management problem. So the study can conclude that there are many factors
which make a business firm to fail.
Table 4.2 Respondent attitude problems solving methods
Respondents response
Questions Yes Percentage No Percentage Total
1. Do you believe that the organization
uses different methods in order to solve
the problems?
2. If you answer is yes for the above - - - - -
question list down the methods used?
Source: Field Survey, 2016
Regarding problem solving methods 8(34.78%0 of respondent express that there is no
problem solving methods that solves the problem of the organization that is related to
insurance, on the other hand 15(65.22%) of respondent express their opinion by saying
there are methods which can solve the problem that is takes place in the organization, and
they also put those methods which are used for the company to solve problems among,
the methods that they list are, creating mutual understanding, creating good working
condition for employees and participating employees in decision making. As depicted on
the above table the company must use those methods to solve problems that will occur in
the organization.
Table 4.3 Employees attitude of solving problems for growth and development of
the company
Questions Respondents response
Yes Percentage No Percentage Total
1. Do you think that solving problems is - -
vital for the growth and development of
the company
2. If you answer for the above question is - - - - -
yes by what case try to list
Source: Field Survey, 2016
As indicated the above table, all 23(100%) of the respondents responded that solving
problem is vital for the growth and development of the company and they are express
their reason. As they express the reason without solving internal problems of the
company, the company cannot survive with its business and solving problem makes the
organization high productive in labor force, increase quality service and increase
customers satisfaction.
Hence, solving problem is a very vital for development and growth of the company as
well as increase number of customers by producing of quality product and service.
4.4 Analysis of data collected from manager through structured and
unstructured interview
Page 20
4.4.1 Analysis of data collected from manager through structured interview
 According to the question how the insurance company assures continues growth of
the business firm, the manger answers that the insurance company helps the factory at
the time of risk by compensating the risk and replacing the damaged machineries, this
means risk of the factory are covered by the insurance company, indicated that the
growth of the factory doesn’t stop in the consequence of such risks.
 The manager response for the main causes that hinder the business firm from its
growth and operation. There are a lot of causes that makes a business firm to fail this
are lack of management skill in the organization, lack of proper capitalization, loss of
main trade account, in adequate and in appropriate financing. These all make to stop
business firm in its operation. Because these the above things are the main for a firm
not only to get profit but also to stay in the market.
 According to the responds of the manager for methods that the factory uses in order to solve
problems that are related to insurance, there are different methods to solve problem like,
making good communication with insurer, proper insurer contract, make good trust between
the insurer and the insured company and communicating all contract term of insurance.
Therefore company uses the above method to solve risks that are related to insurance.
Generally speaking the researcher had realized from the response of the manager, that uses of
insurance service had helped the factory in many ways for instance the insurance company
helps the flour factory to give continuous service to the customers by covering the risk that
had been occurred. But if they did not use any insurance service their operation process will
fail if any damage is occurred.
4.4.2. Analysis of data collecte from the manager through unstructured interview
 Regarding the type of insurance used by the organization to solve risk the manager said that
the factory had been using the NIB insurance company for solve risk. The organization had
bought fire insurance, life insurance and marine insurance from NIB Insurance Company.
 In which department did the factory purchase life insurance? The manager said that the
organization purchase life insurance in the area which is sensitive to risk like production
department (machine related activates) and transportation service area. This indicates that the
factory purchase insurance policy for selected area which have more degree of risk.
 Is there any loss prevention mechanism that the insurance companies provided to your
organization?
The manager response is that the loss prevention mechanism that the organization gets the
insurance company was at the time of production and distribution to prevent car accident by
limiting speed, checking machine in different place rater in one location. Generally the
researcher concludes that loss prevention mechanism is very essential for the development of
the factory business and help to employees working effectively without risky condition.

21
 Reference
George E. Rejda, principal of risk management and insurance 10 th edition 1998 Addison
Wesley
James. Trieschmann, Robert E, Hoyt and David. Sommer risk management and insurance
12th edition Indian edition
Teklegiyorgis Assefa (2004) risk management and insurance mega printing p/c Mekelle
University
William Arthur risk management and insurance 4th edition 1981 mc grow hill
William Chand (2005) Risk management and insurance 9th edition Indian edition.
Other source
§ (www.iiwww.trade.gecko.com/... Business)
§ (www.moyak.compapers small business )

www.cbfb.co.uk.protecting your business)

Budget schedule
Budget is preliminary written plan for future work in this study is the researcher will use
the following expenditure.

No Material Unit of Quantity Unit price Total

measurement
1 1 120 120
Paper Pad

2 Pen Piece 6 20 120

3 Printing Per sheet 60 7 420

4 Typing Per sheet 60 1 60

5 Photo copy Per sheet 60 1 60

6 Biding 20 20

Page 22
 7 Telephone Per hour 5 15 75

8 Transport round 10 30 300

9 Internet Per hour 4 50 200

10 Other expense 140 140

Total 1515

Time schedule

No Months

June July August September

Week
Weeks

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

1 Identification

2 Definition problem

3 Literature review

23
4 Preparation of plane

5 Preparing
questionnaire

6 Collection

7 Discussion and
analyses

8 Conclusion and
recommendation

9 Editing and finagling

the paper

A. Questions for Questionnaire

1. Sex male female
2. Age 18-30 31-45 above 31-45 above 45
3. Education level A. <6 B. 7-12 C. diploma D. degree
E. Certificate F. above
4. Have you faced problem before the organization purchase insurance?
Yes No
5. If you answer to the above question number, 4, yes can you list then
_________________________________________________________
_________________________________________________________
6. Have you faced the problem after the organization purchased insurance?
Yes No

7. Have you get adequate facilities as the time of risk?

_____________________________________________________________________
_____________________________________________________________________
8. If your answer above question in number in 7 is ,yes, what facilities do you get ?

Page 24
_____________________________________________________________________
_____________________________________________________________________
9. In your assumption the service of insurance is important to the employees care?

Yes No
10. If you idea to say above the role of insurance service to your factory growth can
you list them?

________________________________________________________________________
_______________________________________________________________________

B. Questions for Interviews

1. How the insurance service assures continues growth of the business firm?
2. What are the main causes that hinder the business from its growth and
operation?
3. What are the methods that the factory uses in order to solve problems that are
related to insurance?

25