Identifying Risks and Recommendations for Trading.com

2019

Introduction
Jospe Drake founded a company three years ago (Trading.com) in order to offer the
services of educational seminars and investment mentoring to those customers who
are willing to learn about the market and expand their wealth through investing.
Since then it has expanded its operations by opening regional offices in Melbourne,
Sydney, Adelaide and Brisbane while working along with 100 staff members. This
report aims to evaluate the case study of this company to identify risks which are
likely to affect its operations. In order to achieve this objective, this report will use the
“risk exposure calculator (REC)” to provide justification regarding different threats
that will impact the operations of the enterprise. Various suggestions will be given as
well for the organisation that will reduce the impact of these risks and eliminate them.

Risk Exposure Calculator (REC)
The REC is an effective tool for companies to identify the key risks which they face
when they are operating and managing their operations on a day-to-day basis. It was
given by Robert Simons in order to help enterprises in resolving the issues faced by
them to improve their performance. A score is given to organisations on a number of
dimensions, and they can receive a low score of 1 or a high score of 5 (Simons
1999). The companies that score between 9 and 20 face low risks, which put them
into a secure zone. This is not the case with the total points of the companies are
between 21 and 34, which is a high score that denotes the caution zone in which
companies face medium risks. Organisations that score between 35 and 45 face
high risks and they operate in the danger zone (Simons 1999).
A. Growth-related Risks
The enterprises that expand their operations face a number of risks because their
growth leads to harming the interest of employees that suffered a high burden when
fulfilling their duties and it is expected that they will perform better (Hon & Chan
2013, pp. 174-184). Many times, the management wanted to set high goals for the
organisation and employees; however, they did not consider how much burden will
they put on the workers that increase threats as well (Mokaya et al. 2013, pp. 79-90).
The rate of business expansion should also correlate with human capital
requirements based on the organisational operations, or they suffered the risk of the
high burden of work which becomes challenging and difficult for them (George 2015,
pp. 315-329). Goals of these policies is to assess the key requirements of the
enterprise in relation of human capital and putting policies to fulfil them to continue
the efficiency of operations since it can harm customer relations and their services
which they receive since their prioritises changes from customer satisfaction to target
achievement (Zhao & Mattila 2013, pp. 310-315). Not only does the number of
human capital should be reduced, but it is also necessary that such posts should be
filled by experienced workers who are capable of delivering quality services while
also meeting their targets (De Menezes 2012, pp. 308-328).
Pressure for performance

Currently, the pressure on 100 employees of Trading.com is high, which provides a
score of 5 to the company. Employees receive pay based on the commission which
they receive for the number of clients which they bring in the organisation. Fixed pay
of thirty thousand is meagre and not enough to live comfortably. Their targets are
also set by the management with consulting with them, which also puts the burden
on them to perform better.
Rate of expansion
Trading.com receives a score of 5 because it is expanding at a fast rate without
ensuring that it has an adequate number of employees, which increases pressure on
the workforce. There are not enough experienced employees, and their targets are
set without their approval. The quality of mentoring services has reduced as well
since consultants only focus on sales and the number of complaints of customers is
increasing. The company will not be able to continue this growth rate for a long
period of time.
Inexperience of key employees
A score of 5 is received by Trading.com since Drake told himself the lack of
availability of employees with high expertise in the business. It has also reduced the
employment standards while hiring employees and employees without adequate
experience cannot deliver quality services to customers, which make it difficult for
them to receive satisfactory customer services.
B. Organisational Culture related Risks
Effective workplace environment plays a crucial role in the growth of an enterprise
without which it faces many challenges since a negative work environment did not
support entrepreneurial risk taking behaviour (Goetsch & Davis 2014). Through
entrepreneurial risk taking, the companies can assess the challenges present in the
market while implementing policies to take measures that improve its practices and
customer experience (Shan, Song & Ju 2016, pp. 683-690). The entrepreneurial risk
taking can only be promoted if the companies provide high rewards to their
employees for taking big risks that lead to positive outcomes. This behaviour can
only be reinforced if the executives did not resist the bad news given by employees
or managers when their actions result in failure (Vij & Bedi 2012, pp. 17-31). They