Risk Assessment Report of Property Millionaires

RISK ASSESSMENT REPORT OF PROPERTY MILLIONAIRES
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Introduction
Management of organizations requires integrating the concept of risks, even during
optimism bounds of market growths (Dionne, 2013). During the situation of market growths,
businesses hire people, increases operations scale and search out for new opportunities. At such
times also managers need to assess the potential dangers or risks that are facing the Company.
The continued success of a Company requires it to invest in newer systems and integrate into
aspects of failures. In the current case analysis, a company of Property Millionaires, dealing in
real estate investment seminars is conducted. The philosophy of the Company is to make people
invest in properties such that they can gain substantial returns from them (Koivisto et al. 2009).
George Kirzner established the Company, and currently, the Company is a medium sized
business with over 100 staffs. It has offices in Melbourne, Sydney, Brisbane, and Adelaide. The
Company aims at conducting rapid expansion to hire new staffs such that its business model
continues generating profitability. The Company's risk assessment is undertaken to understand
the level of risks facing the Company.
Risk Assessment Report
Expanding and successful organizations need to look out for circumstances and
management styles that might lead to the creation of possible pressures (Simons, 1999). A
comprehensive risk assessment report details the scores by denoting pressure points, signaling
the Company’s exposure to dangerous levels of risks and then subsequently remedial actions
might be incorporated. Managers can integrate into risk exposure calculator and compare scores
at different levels and across various functions, allowing to assess the Company's unit exposure

to risk as compared to the rest of the organization (Arena, Arnaboldi and Azzone, 2010). The
risk exposure calculator can be used in comparing scores from the past and at current levels such
that the organization's internal risk trajectory can be determined. A risk exposure calculator
provides executives and managers of Property Millionaires for assessing the Company's level of
risks and whether it is in a cautionary phase, safety zone or at danger levels. Determination of the
current company's risk level will allow aligning it with the organization's strategy (Chapman,
2011). The Company to support its random growth have been hiring consultants without much
qualification and receiving complaints from customers regarding them. The Company is skipping
an integral step of the quality-management process by allowing inexperienced consultants with
no prior exposure to sales in holding seminars.
Moreover, case analysis reveals that the senior manager averts providing information
with the regional managers. The negative and bad news is averted at the senior levels, and there
is too much aggression within the Company (Korteweg and Sorensen, 2010). The situation
prevalent within Property Millionaires have been causing inefficiencies in conducting seminars
as their people are undermanaged and overloaded. The risk exposure calculator for Property
Millionaires is done as below;

A. Pressure points due to growth
Internal risks within a corporation can arise due to growth, culture and information
management. As Property Millionaires is in a phase of rapid growth, such pressures can lead to
an increase in the level of risks for the Company (Bui and De Villiers, 2017). Rapid growing
Property Millionaires is attracting some employees and consultants to grow at a rapid rate. The
consultants along with the senior managers and regional managers are given aggressive targets,
setting ambitious profit goals. Consultants are rewarded when they achieve their set targets and
are treated like royals. However, those who fail are not provided anything and consultants work
purely on a commission basis (Lam, 2014). These factors lead to first creating pressure for
performance, then the pressure point being the rate of expansion and finally leading to the
inexperience of key employees.
i) Pressure for performance
Creating pressure for performance might lead to the creation of challenging goals,
averting entrepreneurial creativity, innovation, and superior financial performance. Property
Millionaire has created unintended risk and with consultants fearing that failure to meet their
performance expectation will jeopardize their compensation (Hillson and Murray-Webster,
2017). The consultants might feel the intense pressure to succeed at all costs. As at this point the
aggressive stretch goals were seen set from the top down with no input from subordinates. As
performance-variable pay is compensation for consultants, the score of this point is invariably
high depending upon these factors. (Score: 4) A score of 5 was not given as capital markets were
not present holding high financial expectation from the Company.