Risk Assessment of Property Millionaires

This assignment delves into the risk assessment of Property Millionaires, a company operating in the real estate sector. It utilizes a risk exposure calculator to evaluate various factors impacting the company's risk profile, including financial stability, operational efficiency, and regulatory compliance. The analysis identifies strengths and weaknesses, ultimately recommending strategies for mitigating risks and enhancing profitability.

Running head: RISK ASSESSMENT REPORT
Risk Assessment Report
Name of the Student:
Name of the University:
Author Note:

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Executive Summary
This report intends to shed light on the process of risk assessment and its related processes.
The company selected to study the process of risk assessment is Property Millionaires. The
tool selected to analyze the amount of risk faced by the company is Risk Exposure
Calculator. This report will provide a brief overview of the pressure points related to the
various aspects of growth. The report will also provide a rough overview of the pressure
points related to culture. Lastly, the report will conclude with an overview of the pressure
points related to information management.

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Table of Contents
Introduction................................................................................................................................3
Pressure points due to growth....................................................................................................3
Pressure points due to culture....................................................................................................5
Pressure points due to information management.......................................................................6
Conclusion..................................................................................................................................8
References..................................................................................................................................9
Appendix 1...............................................................................................................................11

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Introduction
Risk assessment can be defined as the process by means of which the various
companies as well as business organizations determine the level of qualitative as well as the
quantitative risk faced by their organization or company (Harvard Business Review 2018).
The tool, which is commonly used by the companies or the organizations to measure the
amount of risk faced by them is the “Risk Exposure Calculator” (Harvard Business Review
2018). This report intends to study the process of risk assessment through the company
“Property Millionaires”. This particular company provides services to the customers in the
real estate business. The philosophy or the principle followed by the owner of the company is
that “anybody can become a property millionaire if they have the right mind set, education,
and support”. The business of the company is expanding fast and the management of the
company is having trouble managing the business of the company. It is to be noted that the
owner of the company George is thrilled with the growth of the company however there are
others who are not so much thrilled with the prospect. Therefore, there is confusion among
the employees whether they should focus on productivity or quality.
Pressure points due to growth
Growth forms one of the most important aspect of any company or organization
(D’alpaos and Canesi 2014). It is to be noted that overall growth as well as the development
of the business is the main motive or driving force for all business organizations or
companies (Simchi-Levi, Schmidt and Wei 2014). However, there is a certain element of risk
also involved in the process of growth. There are three elements of risk involved in the
process of growth. These are-
 Risk due to pressure for growth

4RISK ASSESSMENT REPORT
 Risk due to pressure for expansion and
 Risk due to the inexperience of the employees
The company Property Millionaires due to the increase in the demand of the services
offered by it is facing risks in these particular aspects. The owner of the company, George
clearly stated that to follow the path of growth each of the employees will be provided with
aggressive sales target. Therefore, it said can be said that the company is facing risk in terms
of growth. In order to cater to needs as well as the requirements of the increasing number of
customers, the company needs to expand (Ulaga and Loveland 2014). However, if the
company follows the path of growth the company will be subjected to various kinds of risks
like quality, customer services and various others. A calculation of this particular risk is
provided by the Risk Exposure Calculator is 3.
The company is also facing risk in terms of its expansion plans. It is to be noted that it
is very easily to follow the path of growth and expansion but very difficult to sustain it (Aebi,
Sabato, and Schmid 2012). Therefore, it is seen that many companies after initial impressive
periods of growth as well as expansion had to shut down its business due to various issues.
The company Property Millionaire also faces similar plight. The company currently have
around 100 employees and is hiring fresh candidates. However, it is seen that most of them
are inexperienced and inefficient. Therefore, the company, if it is to follow the path of
expansion will have to take into consideration the various quality, customer services and
diverse other aspects into consideration before making the decision (Bromiley et al. 2015). A
calculation of the risk factor involved in this particular process as measured by the risk
exposure calculator is 4.
The company in order to cater to the needs as well as the requirements of the its
increasing number of customers is hiring many new employees. However, it is seen that most

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of these employees are inexperienced as well as inefficient and therefore the quality of the
services provided by the company is fast decreasing (Kayworth and Whitten 2012). The
company, therefore, needs to take this particular factor into consideration before embarking
on the process of growth as well as expansion. A calculation of the risk measure involved in
this particular step is 2.
Pressure points due to culture
Culture forms one of the most important aspects for the overall growth as well as the
development of any business organization or company(Hofmann et al. 2014). It is generally
seen that the companies which take into consideration the culture of the place in which they
are operation flourish more in comparison to the countries which do not. The company
Property Millionaires therefore, need to take into consideration the culture of Australia for the
overall growth as well as the development of their company. The risks involved in the
process are listed below-
 Risks due to rewards for entrepreneurial risk taking
 Risks due to executive resistance to bad news
 Risks due to level of internal competition
It is to be noted that the company Property Millionaires do not provide fixed salaries to
the employees. The salaries of the employees are on the basis of the number of customers that
they grab. The employees as a matter of fact get commissions on the basis of the number of
customers that they provide to the company. It is also to be noted that the employees are
appreciated on the basis of the number of customers that they bring to the company. There is
a certain measure of risk involved in the process. It is to be noted that all the managers of the
company do not work together and various seminars are conducted by the individual

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employees without the approval of the managers. Therefore, the amount of risk faced by the
company on this particular is very high. The score of the company in this context is 3.
It is to be noted that the various members of the company conduct seminars to attract
more customers and they approach the managers if only they have any sustainable results
(Beske and Seuring 2014). However, it was also seen that if any negative thing happened that
was not conveyed to the managers. Therefore, it can be said that the company lacked
resistance to bad news. This factor might impact the overall growth as well as the
development of the company in the longer run. The score of the company in this context is 2.
Another thing noticed is that the company did not provide fixed salary to the
employees. They were provided commissions on the basis of the number of customers they
were able to bring to the company. Therefore, the level of competition within the company is
very high and sometimes it was also seen that the employees adopted all sorts of unethical as
well as immoral means to earn extra amount of money (Beske and Seuring 2014). Thus, it
can be said that the company faces high amount of risk on this particular aspect. The score of
the company in this context is 3.
Pressure points due to information management
Information management forms an important aspect of the any business organization
(Hofmann et al. 2014). It is normally seen that an effective information management system
lead to the overall growth as well as the development of the business organization concerned.
The risk factors involved in this particular instance are as follows-
 transaction complexity and velocity
 gaps in diagnostic performance
 degree of decentralised decision making

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The company in order to attract more number of customers provided free
seminars(Hofmann et al. 2014). It is to be noted that the various rules as well as regulations
related to the real estate business are constantly changing but the company Property
Millionaire is not constantly modifying as well as updating its information database as per the
latest information released by the Australian government. This might become a cause of
concern for the company in the longer run and therefore the company needs to constantly
upgrade its database. The score of the company in this context is 2
Assessment of performance forms an important aspect of all business organizations
(Beske and Seuring 2014). However, it is seen that the various regional managers of the
company Property Millionaires do not often have the access to the various data as well as the
information related to the performance of the various employees. This might even be a
reflection of the fact that the employees are not working a fixed salary slab. This forms an
important area of concern for the company. The score of the company in this context is 3.
It is to be noted that the decision making stays with the higher management team of
most of the globally famous companies as well as organizations. However, in the case of
Property Millionaires it is seen that the decision making power stays with the various
employees who conduct seminars as per their own individual ideas in order to attract the
maximum amount of customers. They report back to the various regional managers only if
they have developed any substantial method. Therefore, this forms an area of concern for the
company as the power stays within the hands of the individual employees who just look to
maximize their monthly profit (Kayworth and Whitten 2012). The score of the company in
this context is 2.
These in short are the various factors which affect the company Property Millionaires.
It is to be noted that the total score of the company on the risk exposure calculator is 25,

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which means that the company is under the caution zone. The company therefore, needs to
review its policies as well as strategies if it wants to stay in the business for the longer and
also to expand its business.
Conclusion
Therefore, from the above discussion it becomes clear that risk assessment is an
important part of the various companies as well as business organizations. It helps the various
companies as well as organizations to actually access their performance in terms of the
amount of risk factor. The various companies can access their performance and the amount of
risk, which they face by means of the risk exposure calculator. The scores provided by the
risk exposure calculator can help the companies to improve the aspects on which they score
poor grades. This can also lead to the overall growth as well as the development of the
company or the business concerned.

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References
Aebi, V., Sabato, G. and Schmid, M., 2012. Risk management, corporate governance, and
bank performance in the financial crisis. Journal of Banking & Finance, 36(12), pp.3213-
3226.
Beske, P. and Seuring, S., 2014. Putting sustainability into supply chain management. Supply
Chain Management: an international journal, 19(3), pp.322-331.
Bromiley, P., McShane, M., Nair, A. and Rustambekov, E., 2015. Enterprise risk
management: Review, critique, and research directions. Long range planning, 48(4), pp.265-
276.
D’alpaos, C. and Canesi, R., 2014. Risks assessment in real estate investments in times of
global crisis. WSEAS Transactions on Business and Economics, 11(1), pp.369-379.
Harvard Business Review. 2018. How Risky Is Your Company?. [online] Available at:
https://hbr.org/1999/05/how-risky-is-your-company [Accessed 3 Feb. 2018].
Hofmann, H., Busse, C., Bode, C. and Henke, M., 2014. Sustainability‐related supply chain
risks: conceptualization and management. Business Strategy and the Environment, 23(3),
pp.160-172.
Kayworth, T. and Whitten, D., 2012. Effective information security requires a balance of
social and technology factors.
Simchi-Levi, D., Schmidt, W. and Wei, Y., 2014. From superstorms to factory fires:
Managing unpredictable supply chain disruptions. Harvard Business Review, 92(1-2), pp.96-
101.

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Ulaga, W. and Loveland, J.M., 2014. Transitioning from product to service-led growth in
manufacturing firms: Emergent challenges in selecting and managing the industrial sales
force. Industrial Marketing Management, 43(1), pp.113-125.

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Appendix 1
Risk Exposure Calculator result of the company Property Millionaires