Risks and Recommendations for Trading.com

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Governance, Ethics and Sustainability

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CONTENTS
Introduction....................................................................................................................................................... 2
Risks due to growth........................................................................................................................................ 3
Risks due to organisational culture.......................................................................................................... 4
Information handling risks.......................................................................................................................... 6
Conclusion........................................................................................................................................................... 8
Recommendations........................................................................................................................................... 8
References........................................................................................................................................................ 10

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INTRODUCTION
Founded three years ago, Trading.com is a start-up that offers educational seminars and
other mentoring related services to those people that are interested in investing in the
stock market. Jospe Drake is the founder of this company which has established its
regional offices in areas such as Brisbane, Adelaide, Melbourne and Sydney. In this
report, the current risks which are faced by Trading.com will be evaluated by using the
risk exposure calculator (REC) that was developed by Robert Simons. In this calculator,
the risks of the company are scored on a scale of 1 to 5 in which 5 is the highest score
(Simons 1999). By using this method, the risks faced by Trading.com will be analysed to
give a score to the company and recommendations will be made assist the company in
addressing those risks that affect its profitability in the future.

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RISKS DUE TO GROWTH
As the competition becomes fierce between organisations, it becomes difficult for them
to sustain their growth in the market by generating a competitive advantage. A highly
productive workforce provides a competitive advantage to companies; thus, companies
expect too much from their employees, which resulted in imposing immense pressure
on them (Ellen et al. 2012, p. 79). This pressure adversely affects the performance of
employees by creating physical and mental restraints that hinder their ability to
discharge their duties in an effective manner while focusing on ensuring that customers
receive high-quality services (Cheney et al. 2014, pp. 591-603). Along with the pressure
for performance, employees also face pressure due to the fast expansion of the
company.
In case the employees are not prepared for the expansion and handle the pressure, then
it becomes difficult for organisations to make sure that they reach out to a large
customer base (Syrek, Apostel & Antoni 2013, p. 252). The growth of the company
crates pressure on current employees if the management did not hire an adequate
number of skilled workers to share the work pressure. Furthermore, lack of availability
of adequate number of skilled and talented workers also makes it difficult for
corporations to cope up with the pressure of the growth (Gelens et al. 2014, pp. 159-
175). The employees are more likely to reduce the quality of their services in order to
meet their targets, which make it difficult for organisations to build a strong
relationship with customers, and it increases risks of the corporations (Gupta 2015, p.
45).
Pressure for performance
As per the current structure of Trading.com, employees received payment based on
their performance in the organisation since they are paid on a commission basis. They
receive a percentage of the course fee and recently, the company has implemented
policies to set a base salary for consultants of $300,000. However, the amount of this
salary is very low, which is not enough for employees to live a decent life which puts
pressure on them to earn more commission. Their targets are also set without their
advice or consultation. Drake has provided that the company relies on its employees for