Governance, Ethics and Sustainability: Risk Analysis of Trading.com

This report discusses the risks faced by Trading.com in terms of organisational growth, cultural issues and information management system. The report seeks help from the risk exposure calculator to get a clear perception of the intensity of the risks. The risks are prioritised on the basis of preferences. The report concludes by stating that the risk exposure calculator is highly effective for Trading.com to identify and resolve the issues on the basis of its intensity.

Running Head: GOVERNANCE, ETHICS AND SUSTAINABILITY
GOVERNANCE, ETHICS AND SUSTAINABILITY
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Table of Contents
Introduction......................................................................................................................................2
A. Pressure points due to growth..................................................................................................2
Pressure for performance.............................................................................................................2
Rate of expansion........................................................................................................................3
Inexperience of key employees...................................................................................................4
B. Pressure points due to culture...................................................................................................5
Reward for entrepreneurial risk...................................................................................................5
Executive resistance to bad news................................................................................................5
Level of internal competition.......................................................................................................6
C. Pressure points due to information management.....................................................................7
Transaction complexity and velocity...........................................................................................7
Gaps in diagnostic performance..................................................................................................7
Degree of decentralised decision making....................................................................................8
Conclusion.......................................................................................................................................8
Reference.......................................................................................................................................10
Appendix........................................................................................................................................12

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Introduction
Risk analysis is part and parcel of the organisational decision making and facilitates a
strategic advantage for the business organisations by analysing the risks before it occurs.
According to Carvalho and Rabechini Junior (2015, p. 329) risk analysis is the process of
identifying and evaluating the potential issues that have adverse impact on the organisational
development. Therefore, it is important for the corporate entities to identify and resolve the risks
as soon as possible. In this regard, Trading.com, a share investment and mentoring service
company in Australia has been taken as the case study. The organisation is well established in
the Australian market and expanded its branches in Sydney, Melbourne, Brisbane and Adelaide.
The organisation is medium sized and currently faces huge growth in the market. However, the
company is suffering with a series of challenges in terms of organisational growth, cultural
issues and information management system. Henceforth, this report is going to discuss the risks
that Trading.com is facing by the use of a risk exposure calculator.
A. Pressure points due to growth
Pressure for performance
As per the research of Smith and Bititci (2017, p. 1210) it can be stated that pressure on
the employees for more productivity is considered to be a major factor for the business
organisations in order to bring more profitability. However, it is important to put focus on the
employees’ abilities and skills. In case of Trading.com the company is focusing on the
aggressive sales growth. Subsequently, it is important for the existing workforce to perform
beyond their natural ability. The senior management also puts enormous pressure on the

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employees by increasing their performance. In this context, implementing the special bonuses
and incentives prove the interest of the management to case enough pressure on the employees.
In addition to this, the size of Trading.com is also an important factor to focus on. The company
is belonged to a medium sized organisation and restriction on the employee numbers is evident
for the company. However, the increase in the market demand creates huge problem for
Trading.com to cope with the intense demand. Currently, the company has more than 100
employees in all four branches but it is not adequate to pace with the market trend. The senior
management shares the interests of recruiting new people. Until the new employees are come
into action the existing consultants will feel robust pressure. Therefore, the risk exposure
calculator marks this risk 4.
Rate of expansion
The senior management of Trading.com is not willing right now to expand its business
physically. In other words, it can be stated that the senior management has no plan right now to
set up new branches in Australia. However, it can be seen that the company is highly motivated
to expand its sales growth robustly. In this context, Crane (2017, p. 135) opined that the
expansion of an organisation in terms of both physical or sales can be generated through
adequate infrastructure specifically human resources. For Trading.com the organisation has
limited workforce to expand its business. Moreover, the company is bound to restrict its
employee strengths due to organisational size. It is impossible for Trading.com to expand its
business havoc and the senior management acknowledges this limitation. As a result of that the
management only focuses on the growth of the sales by recruiting more people. From the
research of Samuel et al. (2017, p. 92) it can be derived that identifying the limitations and
weaknesses are considered to be the major aspect for he business organisations so that the

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corporate entity can develop its business plan accordingly. For Trading.com also the
management tries to create an effective measure by focusing on aggressive sales growth rather
than putting all the emphasis on physical expansion of the company. Therefore, the threat of rate
of expansion is low and the risk exposure calculator marks it 1 for Trading.com.
Inexperience of key employees
For Trading.com experience of the consultants are highly important as they are doing the
key tasks of selling the share investment courses to the customers. Huo and Boxall (2018, p. 573)
advocated that employees were the key driving force for the success of any organisation because
of not only their unique skills and abilities but also for profound experience that helps the
organisation to establish a better relationship with the customers. In this regard, it can be seen
that Trading.com is intended to maximise its employees so that it will be resembled with the
strategy of aggressive sales growth. Therefore, employing new employees compel the
organisation to reduce the standard of the employment. As a result of it will leave a great deal of
impact on the quality of workforce that the company enjoyed until now. It is a pertinent task for
the business corporates to focus on the ability, skill and the experience of the employees so that it
will strengthen the existing workforce exposure and ability (Quilty, Robinson and Blaszczynski
2015, p. 363). Moreover, Trading.com has a great deal of problem with its regional managers. It
can be alleged that the regional managers do not have adequate knowledge or lack of experience
in the respective field that restricted them to take adequate action for the development of
Trading.com. Therefore, the risk exposure calculator marks it 3.

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B. Pressure points due to culture
Reward for entrepreneurial risk
De Gieter and Hofmans (2015, p. 207) mentioned that the purpose of using rewards for
the employees had a great impact on the level of satisfaction among the employees where it
could be found that the staffs would be highly motivated due to the organisational rewards
system. Based on this understanding, Trading.com also follows the same way to make the
employees highly motivated. The existing framework of the organisation was designed to
provide the employees rewards in the form of incentives. All the employees would get an
incentive for selling a course worth of $10,000. However, the organisation is facing huge change
in its business practice due to the increase in the market. Therefore, the senior management feels
the need for enhancing the performance of the existing employees. In this context, introducing
new incentive and salary structure have a commendable impact on the employees’ motivation
and the senior management also wants it. As a result of that a new salary structure is proposed by
the CEO Jospe worth of $30,000 per annum. In addition to this, the senior management is willing
to develop a workplace competition so that all the employees will strive for giving better
performance. Henceforth, a special bonus with expensive gifts and luxury holidays are offered to
the best performers. Therefore, the risk in entrepreneurial actions are less due to prominent
reward strategy. The risk calculator remarks it 1.
Executive resistance to bad news
Organisational decision making is one of the major concern for the business corporates in
order to take adequate measures in dire situation. From the research of Rao, K. and Tilt (2016, p.
333) it can be referred that organisational decisions have a great role to play in course of

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establishing effective means of process that will help to eradicate the risks extensively.
Therefore, for Trading.com also the decision making practice is considered to be a pertinent
aspect. The company follows a top down decision making where all the decisions are taken by
the senior management. It means the CEO of Trading.com, Jospe Drake is responsible to take
all the decisions for the organisation. As a result of that there is nothing for the regional
managers to take. In fact, the employees are also kept aside from the decision making practice.
As a result of that the benevolent practice of employee engagement in decision making is absent
in Trading.com.
Al Saifi (2015, p. 170) articulated that decision making is a vast concept and it will be
effective for the current business farms to incorporate all the respective stakeholders in the
decision making process. In case of the Trading.com the regional managers and the employees
are not eligible to take part in the decision making practice. Moreover, it can also be stated that
the relationship between the employees and the regional managers are not so open enough. The
employees are hesitant to inform the regional managers for any trouble. As a matter of fact, the
regional managers are not competent enough to understand the complex working practice in
Trading.com. As a result of that high risk in executive resistance is a serious threat for
Trading.com. The risk exposure calculator marks it to 5.
Level of internal competition
High internal competition is one of the significant feature of Trading.com and the senior
management intentionally procures such a measure for increasing the productivity of the
organisation. High demand in the market is identified as one of the major aspect for
Trading.com and there are limited employees or consultants who can perform effectively to
render high profitability for the company. As far as the research of Nica, Manole and Potcovaru

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(2016, p. 73) is concerned, it can be state that healthy internal competition in an organisation can
lead to better organisational profitability. However, it is important for the business corporates to
motivate the employees in order to participate in the internal workplace competition. Based on
this understanding, it can be stated that the Trading.com management also offers special bonus
to the best performers in terms of expensive gifts and luxury holidays. It seems better for
Trading.com to motivate the employees by compensating them through incentives. Therefore, it
can be argued that the level of internal competition in Trading.com is healthy and systematic.
The risk exposure calculator marks it 2.
C. Pressure points due to information management
Transaction complexity and velocity
The transaction process in Trading.com is highly complex and lack of user friendly
interface creates frustration among the customers to use the online payment process of
Trading.com. In this regard, Min, Lim and Magnini (2015, p. 225) advocated that transaction
facility also helps to build up the high customer satisfaction. Therefore, for Trading.com it is
essential to focus on this aspect. In association to this, it can be argued that the organisation
highly puts emphasis on its sales growth only. As a result of that important aspects like
maintenance and customer service ar3e overlooked by the senior management. Therefore, it will
create great deal of obstacle in the process of customer retention for Trading.com. The risk
exposure calculator marks this issue 3.
Gaps in diagnostic performance
The aggressive sales growth of Trading.com leads the company to put all its focus on the
increase in sales growth. However, Ramanathan, Subramanian and Parrott (2017, p. 121) pointed

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out that the development in productivity is not the only role that the company will emphasise the
most. Maintenance and customer services are also pivotal part of the organisation to check.
However, for Trading.com the organisation has no such diagnostic tool so that the employees
are only focus on the selling. They do not pick up the phone after selling a course. It is a
pertinent problem for the organisation as retention of valued customer can bring sustainable
development. Therefore, the risk exposure calculator marks it 3.
Degree of decentralised decision making
The degree of decision making in Trading.com is based on the top down process. It
means the organisation is focusing on its top down decision making that isolates the employees
and the regional managers to take decisions on behalf of the benefit of Trading.com. The senior
management is identified as the only responsible body to take all the necessary decisions.
Therefore, it can be stated that a communication gap between the employees and the senior
management is prevalent in Trading.com. Moreover, the employees feel more alienated due to
the management practice. Therefore, the risk exposure calculator marks it 4.
Conclusion
The above discussion discusses different types of risk that Trading.com is facing in its
business orientation. The purpose of the report is to seek help from the risk exposure calculator
in order to get clear perception regarding the intensity of the risks. It can be argued that the risk
exposure calculator is highly effective Trading.com in order to distinguish the risks on the basis
of preferences. It will facilitate a strategic advantage for the company to identify and resolve the
issues on the basis of its intensity. Therefore, in a conclusion, the report is rightly discuss

9GOVERNANCE, ETHICS AND SUSTAINABILITY
different types of the risks that Trading.com is facing and prioritise those risks with the help of
risk exposure calculator.

10GOVERNANCE, ETHICS AND SUSTAINABILITY
Reference
Al Saifi, S.A., 2015. Positioning organisational culture in knowledge management
research. Journal of Knowledge Management, 19(2), pp.164-189.
Carvalho, M.M.D. and Rabechini Junior, R., 2015. Impact of risk management on project
performance: the importance of soft skills. International Journal of Production Research, 53(2),
pp.321-340.
Crane, A., 2017. Rhetoric and reality in the greening of organisational culture. In Greening the
Boardroom (pp. 129-144). Routledge.
De Gieter, S. and Hofmans, J., 2015. How reward satisfaction affects employees’ turnover
intentions and performance: an individual differences approach. Human Resource Management
Journal, 25(2), pp.200-216.
Huo, M.L. and Boxall, P., 2018. Are all aspects of lean production bad for workers? An analysis
of how problem‐solving demands affect employee well‐being. Human Resource Management
Journal, 28(4), pp.569-584.
Min, H., Lim, Y. and Magnini, V.P., 2015. Factors affecting customer satisfaction in responses
to negative online hotel reviews: The impact of empathy, paraphrasing, and speed. Cornell
Hospitality Quarterly, 56(2), pp.223-231.
Nica, E., Manole, C. and Potcovaru, A.M., 2016. Competition in the worldwide workplace:
economic globalization and labor rights. Journal of Self-Governance and Management
Economics, 4(3), p.73.

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Quilty, L.C., Robinson, J. and Blaszczynski, A., 2015. Responsible gambling training in Ontario
casinos: employee attitudes and experience. International Gambling Studies, 15(3), pp.361-376.
Ramanathan, U., Subramanian, N. and Parrott, G., 2017. Role of social media in retail network
operations and marketing to enhance customer satisfaction. International Journal of Operations
& Production Management, 37(1), pp.105-123.
Rao, K. and Tilt, C., 2016. Board composition and corporate social responsibility: The role of
diversity, gender, strategy and decision making. Journal of Business Ethics, 138(2), pp.327-347.
Samuel, A.B., Rahman, M.M., Khairuddin, I., Uddin, M.J. and Rahaman, S., 2017. A
synthesised literature review on organisational culture and corporate performance. Journal of
Advanced Research in Social and Behavioural Sciences Journal Homepage, 7(1), pp.83-95.
Smith, M. and Bititci, U.S., 2017. Interplay between performance measurement and
management, employee engagement and performance. International Journal of Operations &
Production Management, 37(9), pp.1207-1228.

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Appendix
Figure 1: Risk Exposure Calculator
(Created by the author)