Governance, Ethics and Sustainability

This study material explores the concepts of governance, ethics, and sustainability in the context of Trading.com. It discusses the pressure points due to growth, culture, and information management, and provides insights into risk assessment and risk exposure calculator. The material also highlights the importance of workforce experience, rewards for entrepreneurial risk taking, and effective decision making in the organization.

Running Head: GOVERNANCE, ETHICS AND SUSTAINABILITY
GOVERNANCE, ETHICS AND SUSTAINABILITY
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1GOVERNANCE, ETHICS AND SUSTAINABILITY
Table of Contents
Introduction......................................................................................................................................2
A. Pressure points due to growth..................................................................................................2
i) Pressure for performance......................................................................................................2
ii) Rate of expansion.................................................................................................................3
iii) Inexperience of the key employees.......................................................................................4
B. Pressure points due to culture...................................................................................................4
i) Rewards for entrepreneurial risk taking...............................................................................4
ii) Executive resistance to bad news.........................................................................................5
iii) Level of internal competition................................................................................................6
C. Pressure points due to information management.....................................................................7
i) Transaction complexity and velocity....................................................................................7
ii) Gaps in diagnostic performance...........................................................................................7
iii) Degree in decentralised decision making.............................................................................8
Conclusion.......................................................................................................................................8
Reference.......................................................................................................................................10
Appendix........................................................................................................................................13

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Introduction
Trading.com is an Australian medium scale share investor company that offers the
customers course fees. The company is highly successful in its business for almost three years
under the leadership of the CEO Jospe Drake. Presently, the company has over 100 staff with
branches over the leading cities in Australia like Sydney, Melbourne, Brisbane and Adelaide.
The increasing sales growth helped the organisation to expand its business drastically with
employing more consultants and employees in the organisational fold. As a result of that many
new people even who have least and fresh experience in that industry were also recruited in order
to facilitate the services as per the demand of the customers. Based on this understanding about
the background of the organisation this report aims to conduct a risk assessment of the
organisation extensively. In this regard, a risk exposure calculator is also utilised in order to
bring an analysis of the existing risks that Trading.com is facing. Moreover, the report will be
discussed in three aspects such as the growth, culture and the information management system.
A. Pressure points due to growth
i) Pressure for performance
As far as the performance in Trading.com is concerned, it can be stated that there is huge
pressure imposed by the senior management on the regional manager as well as the consultants.
The organisational sales strategy of Trading.com is also followed the practice of aggressive
sales that pushed the consultants to increase their sales growth as far as possible. According to
the research of Koehl, Poujol and Tanner (2016, p. 290) it can be stated that the role of the
aggressive sales can be a fatal for a medium scale organisation due to its lack of workforce and

3GOVERNANCE, ETHICS AND SUSTAINABILITY
infrastructure. Risk is always been a crucial factor that the organisations has to be assessed
before exposing the market.
A top down decision making is also existed within the Trading.com that imposes a set of
sales target by the senior manager with having little or no discussion with the consultants and the
regional managers. As a result of that the employees feel pressure to cope with the rapidly
increasing sales target. From the research of Meijerink, Bondarouk and Lepak (2016, p. 235) it
can be derived that the role of the organisation is to judge the ability of its workforce with asking
the employees about it. In other words putting emphasis on the employees’ version of their
ability and the organisation’s expectation a bargaining sales target should be set that can be
achievable. Based on this two points, it can be stated that the Risk Exposure Calculator marked
the threat at 4 marks where aggressive sales strategy and top down sales target can be fatal for
Trading.com.
ii) Rate of expansion
Trading.com witnesses a high rate of expansion due to the high demand in the existing
Australian market. The company is belonged to the share investor and trading sector. Therefore,
continuous expansion is considered to be a strategic advantage for the company to survive in the
high competitive market of Australia. In this regard, there are already four branches of
Trading.com in the central business districts of Sydney, Melbourne, Brisbane and Adelaide.
This strategic expansion of the organisation led to rapid increase in its business practices and the
operations are growing faster. However, there are both the positive and negative impact of such
rate of expansion. As the company is a medium sized organisation therefore the workforce is not
so strong to take huge pressure of demand of the Australian market. As a result of that it creates a
risk to perform effectively in the Australian market due to have enough exposure. Traù (2016, p.

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770) opined that workforce was considered to be the driving force that led the company to the
rung of success ladder. However, lack of able and adequate workforce it is not possible for the
business organisation to extract better business advantage despite of having enough exposure and
opportunity in the market (Samuelet al. 2017, p. 86). Therefore, the Risk Exposure Calculator
rated 4 points to this risk as it is related to the survival of the organisation.
iii) Inexperience of the key employees
Inexperience of the key employees is referred as a big risk for the business organisations as
experience brings more efficacy into the organisational performance (Fehon and Garrard 2017, p.
164). In the key positions especially in management it will be a grave problem to employ
someone who has no previous experience. As a result of that problems can be occurred in case of
decision making and the risk assessing practices. As a result of that the growth of the
organisation can be halted (Juhdi, Pa'wan and Hansaram 2015, p. 189). However, for
Trading.com there is no inexperience person hold the important position. The inexperience of
the key employees scored 2 in the Risk exposure calculator and the overall score was 10 out of
15 which shows some important measures to be taken in the growth strategy of the organisation.
B. Pressure points due to culture
i) Rewards for entrepreneurial risk taking
There is no such measure that Trading.com follows in order to taking risks in the
entrepreneurial level. The organisation is highly focused on the increase in sales growth.
Therefore, putting adequate emphasis on the practice of pushing the employees to work on the
increase in sales growth is considered to be a major agenda of the organisation. Despite of
having no rewards for entrepreneurial risks, Trading.com provides a commission percentage to

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the employees for each sales. In addition to this, a $30,000 per annum salary structure was also
implemented in order to bring efficacy into the salary structure of the organisation. As
Trading.com requires more people in the workforce therefore it is essential for the organisation
to attract the aspirants with its better salary packages. Based on this understanding, Bailey et al.
(2017, p. 48) advocated that employee engagement is a pertinent aspect for the business
organisations in order to increase its business proficiency. Henceforth, employee motivation
plays a significant part in order to satisfy the employees. Moreover, Albrecht et al. (2015, p. 23)
stated that employees are the most important part for the organisation therefore engaging them
through better financial benefits was always seemed highly effective. The existing system in
Trading.com helps the company to provide an effective reward strategy for the employees and
reduces the risk in the Risk exposure calculator.
ii) Executive resistance to bad news
Limited resistance to bad news is a crucial threat for the business culture of Trading.com
because the organisation is no longer big enough to conduct extensive marketing research in
order to bring more efficacy into the marketing opportunities. Lack of communication between
the senior management and the regional managers creates a huge problem in taking adequate
decisions to cope with and resolving the potential risk factors. Moreover, there is a top down
decision making prevalent in Trading.com that restricted other actors in the organisation to take
adequate decision in terms of delivering proper measure for the benefit of the company. Based
on this argument, the research of Kulkarni et al. (2015, p. 375) on effective organisational
decision making pointed out that top down decision making was no longer an effective solution
for the organisation due to the increasing complexities in the practice. In addition to this,
Apostolopoulos et al. (2016, p. 705) confirmed that good relationship between the senior

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executives and the subordinate managers will help to formulate a better and sustainable decision
making for a better future for the company. As a result of that in the risk exposure calculator, the
risk score of executive resistance to bad news was scored 5 due to its intensity into the
organisational practice.
iii) Level of internal competition
In Trading.com the consultants in terms of the employees are faced severe competition
due to the organisational strategy. Trading.com aims to expand its business reach to a great
extent and in this regard the company imposes high pressure on the employees to generate high
growth in sales. This continuous sales target growth creates a competition among the employees
in Trading.com. Furthermore, for increasing the sales rate extensively the company
management offers a lucrative opportunity to the employees in terms of providing the highest
performing consultants special bonuses such as expensive gifts and luxury holidays. As a result
of that the consultants are intrigued to offshoot their sales target so that they can get the lucrative
special bonuses. However, from thee research of Jones et al. (2017, p. 400) intense competition
in the organisational culture can jeopardize the healthy workplace environment and it will cater
more disadvantages to the proficiency in the organisational workplace. Therefore, the risk
exposure calculator calculated the risk at 4 points and the overall workplace risk of the
organisation can be estimated at 12 which the highest. Therefore, it is essential for Trading.com
to procure better measure for developing the workplace culture as soon as possible.

7GOVERNANCE, ETHICS AND SUSTAINABILITY
C. Pressure points due to information management
i) Transaction complexity and velocity
The transactions complexity is one of the main problem for the organisation to deal with
the customers. According to Pham et al. (2016, p. 150) it is important for the corporate business
farms to set a better and user friendly mechanism so that the customers can handle it easily. As a
matter of fact, the number of complaints will also be reduced by providing a better service. In
this regard, the transaction service is the most important aspect for any organisation to not only
procure a better organisational practice but also shaping the fair and transparent image of the
organisation (Menguc et al. 2017, p. 437). In this context, the Trading.com information
management department should implement a better channel to satisfy the customers. The
volatility of the existing transaction system and the lack of pro-active nature of the customer
service framework within Trading.com can create an obstacle for the organisation in near
future. The risk exposure calculator scores 3 marks for the threat of transaction complexity and
volatility.
ii) Gaps in diagnostic performance
It can be stated that the gap in the diagnostic performance is also an important aspect that
can create problem for Trading.com to establish a better customer oriented business practice.
The current customer satisfaction level of the organisation is significantly declined due to the rise
in customer complaints. The customers are feeling cheated due to the lack of effective customer
service management within the organisation after the selling of the course. It means the issues
regarding the customer satisfaction are not addressed adequately and the organisation was no
longer in a position to retain its existing customers. Nyadzayo and Khajehzadeh (2016, p. 269)

8GOVERNANCE, ETHICS AND SUSTAINABILITY
asserted that the role of the organisation to retain its existing customers is one of the major aspect
for business sustainability. It can be restored and resolved by addressing the customers’ problem
in time. One of the major aspect highlights that a good relationship with the customers can
maximise the number of customers (Greve and Schlüschen 2018, p. 88). Therefore, in the risk
exposure calculation the diagnostic performance risk is evaluated with a score of 4.
iii) Degree in decentralised decision making
Trading.com is also infamous for its centralised decision making. A top down decision
making process is existed within the organisational framework of Trading.com that connotes
that the senior management is only responsible to take adequate decisions. Therefore, it can be a
serious threat for Trading.com in order to implement a mitigation strategy in future. Moreover,
the employees also feel less responsible to the organisational decision making that can facilitate
loss of production and service quality. From the research of Chand, Raj and Shankar (2015, p.
77) it can be derived that the decision making process has to incorporate all the actors who are
associated with the particular issue. As a result of that the mitigation strategy can be planned
effectively. Therefore, in the risk exposure matrix the decision making practice scores 2.
Conclusion
From the above discussion, it can be stated that the risk exposure matrix rightly discussed
different types of the risk factors that can jeopardize the healthy business practice in highly
competitive Australian market. For example, in the context of organisational growth the
company was scored 11 which connotes high risk possibility. Moreover, in the cultural context,
Trading.com witnesses highest risk in terms of rewards and level of internal competition and
executive resistance. In association to this, information management is also an important aspect

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where the company has to take adequate measure to establish better customer service. Therefore,
it can be concluded that Trading.com can develop healthy business orientation by resolving
these issues.

10GOVERNANCE, ETHICS AND SUSTAINABILITY
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Appendix
Figure 1: Risk Exposure Calculation
(Created by the author)