Internal Risk Management

Running head: INTERNAL RISK MANAGEMENT
Internal Risk Management
Name of the Student
Name of the University
Author note

1
INTERNAL RISK MANAGEMENT
Table of Contents
Introduction:....................................................................................................................................2
A. Pressure points due to growth:....................................................................................................2
i) Pressure for performance:........................................................................................................3
ii) Rate of expansion:...................................................................................................................4
iii) Inexperience of key employees:.............................................................................................4
B. Pressure points due to culture:....................................................................................................5
i) Rewards for entrepreneurial risk taking:..................................................................................5
ii) Executive resistance to bad news:...........................................................................................6
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:.............................................................................................8
iii) Degree of decentralized decision making:.............................................................................8
Conclusion:......................................................................................................................................9
References:....................................................................................................................................10

2
INTERNAL RISK MANAGEMENT
Introduction:
Risk exposure calculator is an instrument that enables the apex management of business
organisations to study the degree of internal pressure which exists with their organisations and
can emerge as risks to the business of the organisations. The risk exposure calculator takes into
account three categories of internal pressures which business organisations can be subjected
internally namely, pressure due to business growth, due to work culture prevailing internally and
the difficulty in managing information (Hbr.org. 2018). Belás et al. (2014) defines risks as
uncertainties and challenges which are capable of effecting the business generation and/or its
stakeholders. The paper would explore internal pressures which organisations face through
lenses of risk exposure calculator (Attachment). The firm that would be studied would be
Trading.com which is a fictional firm given the case study.
A. Pressure points due to growth:
Business organisations are continuous pressure to expand their business to serev more
customers and generate more revenue on order to give their shareholders higher returns on their
investment. Gherhes et al. (2016) in this respect mentions that the growth needs often create
immense pressure on business organisations, especially on the new organisations with limited
business management experience. The organisation being studied, Trading,com belongs to this
category and offers investment training courses to investors. The private company after
establishing its businesses in Sydney, Melbourne, Brisbane and Adelaide, is expanding its
business (Volery, Mueller and von Siemens 2015). This expansion needs has created immense
on the company and has led to faulty decision making and staff management, all of which would
cause internal risks which would eventually go on to impact the customer service and revenue
generation in the company.

3
INTERNAL RISK MANAGEMENT
i) Pressure for performance:
The first pressure or risk which businesses encounter during growth is pressure to
perform and generate revenue. Sanfelici and Halbert (2016) mention that business organisations
have to expand in the market to serve customers by keeping their normal business operations
steady. Failure to manage business expansion and inefficient human resource management places
immense internal pressures within these organisations. The organisation mentioned in the case
study, Trading.com was seeking to expand its business into new markets after operating
profitability in Sydney, Melbourne, Brisbane and Adelaide in Australia. Thompson (2017) in this
respect mentions that apex management of the business undergoing expansions have to act as
change agents to bring about the change effectively. It is evident from the case study that the
management of Trading.com did not exercise strict control over its employees. First, the
management set immense sales target for the consultants without consulting the latter or the
managers. Secondly, the managers did not collaborate with the consultants in achieving targets
and did not submit performance reports of consultants regularly. Thirdly, the managers did not
have access to important databases and were left to evaluate the consultants solely on their sales
reports. Fourthly, the case study also mentions that the company in order to manage the
requirement of more consultants, compromised with the recruitment standards and acquired
inefficient consultants. The consultants in the spate to acquire new customers, often did not
maintain strong communication with the existing investors’ base. The outcome of the these weak
management of managers and consultants was losing of investors which ultimately led to
generation of low revenue due to losing of investors to similar share trading training
organisations. Thus, it can be inferred from the discussion that inefficient management of