Risks Faced by Trading.com and Recommendations

Governance, Ethics and
Sustainability

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Table of Contents
1. Introduction..................................................................................................... 2
2. Risk Exposure Calculator.................................................................................3
2.1 Risks due to Growth..................................................................................... 3
2.2 Risks due to Organisational Culture.............................................................4
2.3 Information Handling Risks...........................................................................5
3. Conclusion....................................................................................................... 7
4. Recommendations........................................................................................... 7
5. References...................................................................................................... 9

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1. Introduction
The understanding of risk assessment is crucial to make sure that companies
take effective decisions to improve their operations. Trading.com offers
educational webinars and mentoring services to those people who are looking to
invest in the stock market. It has 100 employees and regional offices situated in
Brisbane, Adelaide, Melbourne and Sydney. The purpose of this report is to
analyse various risks which are faced by Trading.com and provide
recommendations to resolve such issues. This report will evaluate each point of
the risk assessment calculator (REC) to identify the risks faced by Trading.com
by giving it a score between 1 and 5 (1 being the lowest). Various
recommendations will be given to Trading.com in order to reduce these risks
after adding its score.

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2. Risk Exposure Calculator
The REC was developed by Robert Simons in 1999 in which he provided a
framework that assists companies in identifying potential risks which affect their
business operations. The companies are scored on a scale of 1 to 5 on different
risk dimensions, and the score is added to reach a conclusion. A company is
considered as safe, which score between 9 and 20 (Simons 1999). A company
that received a score between 21 and 34 is considered in the caution zone. A
company which received a score between 35 and 45 is in the danger zone, and it
has to take immediate action to protect itself from the disaster (Simons 1999).
2.1 Risks due to Growth
The growth of a company is crucial for its success; however, it also creates risks
for the company if employees face high pressure of performance due to the
growth of the company. The employees are the ones, who drive the growth of
the company, and they feel pressured to sustain their performance in order to
continue the growth of the company; however, too much pressure can negatively
affect their productivity (Kreiser et al. 2013, pp. 273-291). The management
should consult with them when they set their targets in order to make sure that
they did not face high pressure, and they also deliver effective quality services to
customers (Blackburn, Hart & Wainwright 2013, pp. 8-27). A link between the
rate of expansion of the company and the skill of the workforce should be
maintained to make sure that the company has enough talented and skilled
employees to meet the demand for business expansion (Ward 2016). A high rate
of business expansion without the availability of experienced employees
negatively harms the customer relationship of the company, and it reduces the
profitability of the company (Morgan 2012, pp. 102-119). The companies that are
proliferating should ensure that they hire an adequate number of talented and
experienced employees to reduce pressure and ensure that customer
satisfaction is met (Chon 2012).
Pressure for performance
In this dimension, Trading.com is facing many risks due to which it receives 5
points. The targets of employees are decided by the management, and they did
not consult with them to ensure that those targets did not put pressure on them.
Employees are under immense pressure to meet those targets since they earn