MBA402 Governance, Ethics and Sustainability: Risk Assessment Report

This report provides a comprehensive risk assessment of Trading.com, analyzing strategic, financial, and operational risks. It uses a risk assessment model to evaluate the likelihood and impact of various threats, focusing on pressure points related to growth, culture, and information management. The assessment considers factors like managerial pressure, rate of expansion, employee inexperience, entrepreneurial risk-taking, resistance to bad news, internal competition, transaction complexity, diagnostic performance gaps, and decentralized decision-making. The report highlights the importance of effective risk management for Trading.com to address challenges and ensure sustainable growth. Desklib offers similar solved assignments and resources for students.

Running Head: GOVERNANCE, ETHICS AND SUSTAINABILITY
GOVERNANCE, ETHICS AND SUSTAINABILITY
Name of the Student
Name of the University
Author Note

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GOVERNANCE, ETHICS AND SUSTAINABILITY
Table of Contents
Introduction......................................................................................................................................3
Risk assessment...............................................................................................................................3
Type of risks that Trading.com most likely to face.........................................................................4
Risk assessment of the organization................................................................................................6
Likelihood of threat.....................................................................................................................6
Likelihood of threat.....................................................................................................................7
Magnitude of created Impact.......................................................................................................7
A. pressure points for growth..................................................................................................7
B. Pressure Points due to culture.............................................................................................9
C. Pressure Points due to information...................................................................................12
Reference List................................................................................................................................14

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GOVERNANCE, ETHICS AND SUSTAINABILITY
Introduction
The research study makes an in-depth analysis of risks related to business operations of
trading.com, which are mostly supposed to be faced during business performing activities. The
objective in this report is identification of the risks that comes with business activities of
trading.com and conduction of suitable assessment of the same. The case study highlights
organisation experiencing dynamic growth. Comparative analysis between the expansion of the
organisation in terms of hiring and training and that of its business operations shows that there is
wide gap and a problem mix in this context since the currently existing workforce cannot deal
with the magnificent challenge of sales increment (Kardes et al. 2013). The localized managers
of the organisation are not motivated to deal with the hectic business pressure.
It is evident in the case study that the brand attempts to to deal with the business problems by
application of corporate strategy. However no proper communication channels for Information
sharing exist within the managers or between the managers, executive as well as the higher
management. Hence, it is indicated that the hierarchy and layers of the organisation suffers from
communication gap. Parallely, it is evident that sales pressure is on the rise, the service quality of
share investment are decreasing and complaints from the customer’s ends are increasing. Most of
the Complaints are regarding the service quality. The users are reporting that until them
assigning of the course over trading.com, they are treated respectfully. However, after that there
is a change in attitude. Hence this research study conducts an analysis of risk management based
on the scenario provided in the end analysis of risk management based on the scenario provided
in the case study, respecting some specific business elements.
Risk assessment

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According to the ideas of Lam (2014), business risks are evident on any instance and we could
lead an organisation to its success. Risks are consequential and can lead to its profitability or also
lead to a consequence as it occurred in the case study. Hence, it is arguable that only business
events should be considered, when it comes to our business. Hence, risk management can be
perceived to be a procedure, technique for tune for management of such risks.
Additionally it can be reflect that risk management considers what can be wrong in a business for
the assessment of the particular release which can be negotiated as well as implementation of
strategies required for evolution of those risks. It is evident that businesses might face several
risks which make it fundamentals for business organisations to incorporate risk management as a
significant part of strategic management of business operations. In this context, Masini and
Menichetti (2013), reflects that risk management process helps an organisation to depict as well
as address the particular risks in their business operations. For evidence, the provided case
scenario shows that even though there is increment of sales, risk of failure exists because the lack
of capacitance of the organisation is evident. Mechanical assessment as well as analysis of risk
for trading.com has been conducted in this report along with depiction of the risks related to the
feedback provided by clients regarding the consultancy course as well as the customer
management strategies that have been implemented by the Consultants for customer retention.
Meanwhile, this report also identifies risk on the basis of the likelihood of the occurrence of an
event. Based on the performance of the assessment, Strategies for counteracting the risk all the
risk related to the event have also been depicted. Lastly, based on the risk management
guidelines for the impact of managing risk and the related approaches as well as controls have
been provided.
Type of risks that Trading.com most likely to face

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The major category of risks that business of trading.com might face is strategic, compliance,
financial and operational.
Strategic
As highlighted by McNeil, Frey and Embrechts (2015), consultancy services for investment can
have significant outcome on significant number of people. It is important for such competition to
work effectively within the market. In context to strategic risks, it can be identified that
competition in the domain of market investment is one of the mightiest challenges that can be
faced by trading.com. Nevertheless, as per the ideas of Bessis (2015), it can be argued that in the
business of financial investment, most of the consumers of the consultancy courses regarding this
domain are chosen very selectively by them. Hence it will definitely become challenging for the
users for accessing as well as identification if it would be better to consult any alter native
provider or not. Hence, it can be commented in the end that this might be helpful in the process
of minimizing the capability of driving competition as also reducing the incentives to be
completed. Hence, the relative level of strategic risk is medium in terms of consultancy services
for investment.
Financial
The primary challenge that will be faced by trading.com in the context of providing
services will be non-payment of customers or the growth in the interest charges against the
business loans. However, in this context, it can be concluded that the in this business domain,
there are relatively low business risks. The current business outcome of trading.com shows that
they are enjoying benefits of a higher sales parity which implies that cases of nonpayment by the
customers are scarce.

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In consideration of the financial risks that the company might face, there are some critical
challenges that need consideration. Bolton, Chen and Wang (2013), highlighted that the most
efficient employee risk management techniques includes maintaining adequate number of
employees, cover as well as employee safety. In this case study, the issues that were
communicated are that the regional managers do not have an understanding of the way in which
the big corporations work and there is also the lack of channel for sharing of information among
the employees. Again, it was also evident in the case study that the consultants of the
trading.com were provided with targets of making specific sales volumes, from the end of the
senior management. However, while setting the target, no input was accepted from the
employees or the regional managers. This proves that the higher management is highly
competitive and they want to achieve their targets by putting high workload on the consultants
(Dionne 2013). This excess pressure on the staff is hampering the quality of service that they are
providing to the clients. Analyzing this condition, it can be inferred that the risk involved in
management of the employee is relatively high.
Risk assessment of the organization
For assessment of the risks related to the Trading.com business framework, the following risk
assessment model has been considered.
Risk = Likelihood of threat * magnitude of impact
Likelihood of threat
Threat likelihood Impact
Low Medium High
High (1.0) (10X1.0=10 50X1.0=50 (100X1.0=100)

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GOVERNANCE, ETHICS AND SUSTAINABILITY
)
Medium (0.5) (10X1.5)=5 (50X0.5=25) (100X0.5=50)
Low(0.1) 10X0.1=1 50X0.1=5 100X0.1=10
Risk Scale: High (>50 to 100); Medium (>10 to 50); Low (1 to 10)
Likelihood of threat
Likelihood Definition
High risk (employee
managing)
It can be mentioned that when a risk is having a high impact
on business, impact of the same could be higher
Low risk (Strategic
outcomes)
When a business is having a medium level of risk, the impact
could be positive or negative which means, business also
might experience significant opportunities for the trade
Low Risk (non payment
and other financial risks)
Low range of risk conventionally does not have high impact
Magnitude of created Impact
A. pressure points for growth
Impact (Score) Justification Score
The managerial pressure for
performance on the employees
is high
Operational reached under the
current business scenario is
high because the previous
year’s performance shows
100

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GOVERNANCE, ETHICS AND SUSTAINABILITY
dramatic increase in sales
volume. However, Rapid
increase can be challenging
also comma since
organisational capacity is
limited. Besides, the
consultants of trading.com are
rated on basis of the target
achieved by them which
forces them to achieve higher
sales volume at any cost.
Expansion of business of
trading.com is taking pace.
However, it is big
challenge.that regional
managers do not have the
expertise of handling big
corporations and there is
critical communication gap
between the consultants,
regional managers as well as
the higher level managers. In
fact, the consultants are often

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left alone with critical task
regional manager who do not
have expertise regarding
consultancy. In fact, regional
managers do not have
complete access to two data
regarding the Consultants.
Hence, it can be concluded
that in spite of a strongly
develop business solution,
internal incapacity can
develop bigger challenges for
the organisation in future.
The case study shows that
with low relative capacity
regarding hiring and training
has been risky affair this is
why, trading.com hire
experience members instead
of appointing fresher to save
cost.
B. Pressure Points due to culture

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Rewards for
entrepreneurial risk
taking (Medium)
Entrepreneurship can develop which
reward and in the initial stage it is
bound to face struggle. Trading.com
achieved large success initially, over
short span of time. Hence, in order
to address the future scope of the
business, consultants are engaged in
business process, which are further
managed by the regional managers
so that we can comprehensively at
the target of sales. Thereby, as a
Start-up organisation, they have
been able to continue their operation
in spite of the market challenges.
Hence, the award received by the
company for entrepreneurship and
risk taking is appreciable.
50
Executive Resistance
to bad news (High)
Managers and executive employees
are encompassed by other staff of
middle and lower departments.
Managers have very less
communication with consultants
and are mainly concerned with the
100

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GOVERNANCE, ETHICS AND SUSTAINABILITY
sales figures. In this context, the
biggest issue is that generally
entrepreneurial managers
communicate with all levels of
hierarchy and have a proper
understanding of business issues.
Maintenance of figurative data does
not lead to success.
Level of internal
competition (High)
It can be highlighted that the
consultants receive high
compensation on meeting the sales
this kids employees motivated in
general, but they are always under
pressure of work, which becomes
intolerable. These keeps the
employees motivated in general, but
they are always under pressure of
work, which becomes intolerable
for a section of employees. as an
outcome the turnover rate is high. In
this company, the consultants are
always under pressure of
performance for achievement of
100

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GOVERNANCE, ETHICS AND SUSTAINABILITY
sales targets.
C. Pressure Points due to information
Type of risk Explanation Score
Transaction
complexity and
velocity
Complexity as well as velocity
in the business transaction of
the company is evident.
However comma the concept
business risks are low since
managers are concerned about
the growth organisation but the
employees of low-level, who
are concerned with execution of
the responsibilities, suffer from
slow communication process.
Such transactional risk can be
there in the working process
because of communication lag
(Sundararajan, Bhasi and
Pramod 2017).
50
Gaps in diagnostic
performance (Low)
The gaps in Diagnostic
performance is slow since the
10

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profitability of the company
compared to overall industrial
standards is much high.
Trading.com achieved
remarkable success within a
short span of time.
Degree of
decentralised
decision making
(Medium)
The decision making process
shared with in a business
including large group of
members is very important.
When the process is weak Basu
(2016), states that this can
become the cause of problem in
coordination between authority
and executive staff.
50

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Reference List
Basu, R., 2016. Managing Projects in Research and Development. Routledge.
Bessis, J., 2015. Risk management in banking. John Wiley & Sons.
Bolton, P., Chen, H. and Wang, N., 2013. Market timing, investment, and risk
management. Journal of Financial Economics, 109(1), pp.40-62.
Dionne, G., 2013. Risk management: History, definition, and critique. Risk Management and
Insurance Review, 16(2), pp.147-166.
Kardes, I., Ozturk, A., Cavusgil, S.T. and Cavusgil, E., 2013. Managing global megaprojects:
Complexity and risk management. International Business Review, 22(6), pp.905-917.
Lam, J., 2014. Enterprise risk management: from incentives to controls. John Wiley & Sons.
Masini, A. and Menichetti, E., 2013. Investment decisions in the renewable energy sector: An
analysis of non-financial drivers. Technological Forecasting and Social Change, 80(3), pp.510-
524.
McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative Risk Management: Concepts,
Techniques and Tools-revised edition. Princeton university press.
Sundararajan, S., Bhasi, M. and Pramod, K.V., 2017. Managing software risks in maintenance
projects, from a vendor perspective: A case study in global software development. International
Journal of Information Technology Project Management (IJITPM), 8(1), pp.35-54.