MBA402 Governance, Ethics & Sustainability: Property Millionaires

This report provides a risk assessment of Property Millionaires, a real estate investment company, using a risk exposure calculator based on the Harvard Business Review article 'How Risky is Your Company?'. The assessment focuses on pressure points created by growth (performance pressure, ex...Read More

Running head: GOVERNANCE, ETHICS AND SUSTAINABILITY
GOVERNANCE, ETHICS AND SUSTAINABILITY
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Table of Contents
Introduction:....................................................................................................................................2
Purpose of risk assessment:.........................................................................................................2
Discussion:.......................................................................................................................................2
Pressure point created by growth:................................................................................................3
Pressure point created by culture:................................................................................................5
Pressure point created by information management:...................................................................6
Recommendation:............................................................................................................................8
References:......................................................................................................................................9
Appendix:......................................................................................................................................11

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Introduction:
The process of identifying the risk factors and dangers that capable of impacting the
business in a way that is not acceptable is called the ‘Risk assessment’ (Velasquez and Hester
2013). The tool that is used most frequently for measuring the ‘Risk’ is the ‘Risk Exposure
calculator’. A risk exposure calculator helps to get a numeric data of the risk factors that allows
prioritising the most critical sectors. In the paper, the major aim is to explore the concept of risk
assessment. The understanding of the risk assessment is done with the help of the case study of
Property Millionaires. The company deals with the real estate property and provides real estate
business. The target customer of the company are people who sell in the real estate industry, and
it provides services to them. The report will consist of risk factors that are currently present in
the company and with the help of risk assessment calculator analyses the risk factors.
Purpose of risk assessment:
According to Simons (1999), the risk assessment is used to identify the factors that cause
harm, analyses it and evaluate it in order to understand the situation of the business. The purpose
of risk assessment is to eliminate the identified hazards from doing further damage to the
business.
Discussion:
It is vital to for any business to understand the risk of the company. To use a professional
tool to evaluate and measure the amount of risk is the best option for companies to ensure
appropriate measures are taken (Brender and Markov 2013). Eventually, the final goal of any
business is, and in order to achieve the goal, various factors need to be seen and taken care.
There are numerous associated responsibilities as well as tensions that are associated with the

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growth of the company. In business, one major factor for the company’s benefit is culture
(Mishra, Boynton and Mishra 2014). It is essential that the company gives priority to the cultural
factors as it is a sensitive aspect that may lead to the growth or downfall of the company.
Through observation, it has been found that a company that has considered cultural factors with
main attention internally, faced with an external flourish in business (Lozano 2015). The
gathering and managing of information are performed by information management. Information
gives insights into the problems and opportunities. Companies need to be sure of information
available and use them accordingly. Effective information management helps company bring
overall growth and development.
Property millionaires will be analyzed on the basis of the factors discussed above. The
company provides services to its clients that belong to the real estate industry. The principle on
which the company believes is that anybody with the right mindset, education and support can
become a Property Millionaire. The company has recently faced fast expansions, however, there
are some troubles faced too in the management of the company. It is important to mention that
George Kirzne, the owner of the company is happy about the fact and thrilled, however, the other
members of the company are not much thrilled with the growth of the company. Therefore, a big
miscommunication and confusion among the employees are currently taking place. There is a
need to ensure priority between quality and productivity.
Pressure point created by growth:
One of the significant aspects of any company or organisation is growing. There is no
company in the market who do not wish to have growth in the business and it is the overall
growth of the company that keeps the business going (Wu et al. 2013). Therefore, since it is the

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most driving feature, the risk factors need to be paid appropriate attention. The risk elements that
are most common under pressures due to growth are:
• Risk by the pressure of growth
• Risk by the pressure of expansion
• Risk by employees lacking experience
By studying the case study, the company Property millionaire is faced with the risks that
are mentioned above. Since the company is expanding, there is increase in the demand of the
services. George has stated clearly that in order to follow the path of growth there will be
aggressive target provided to each employee. Hence, it can be obtained from this situation that
there is risk associated with in terms of growth. To deal with the expanding range of customers
there is need for expansion of the company (Casson 2013). More employees are needed to
provide service to cater to needs and the requirements of the largely increased number of
customers. However, if the company is found following the way of growth, it is bound to face
different kinds of risks such as customer service, quality product or service and many more. The
calculation of the risk factor associated with this situation by Risk Exposure Calculator is 3.
The company is faced with challenges in terms of the plans regarding the expansion. It
would be important to mention that although following the path of success is very easy and
achieving it too, the difficulty is much more when it has to be sustained. Therefore, it can be
observed that several companies fail to keep up after it had initial impressive periods of growth
and expansion. Property Millionaire seems to be facing similar situation. The company, at
present, have 100 employees and is hiring fresh candidates rapidly. However, the matter of
concern is that most of the candidates are inexperienced and inefficient. Hence, there is a risk of

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compromising. The company might be experiencing less efficient. While making decisions the
various factors such as quality, customer service and other diverse aspects have to be managed
(Jensen 2017). This will only be inefficient when there are inexperienced and inefficient
employees. The Risk Exposure Calculator have evaluated the risk of score 4.
In order to cater to all the needs as well as the requirements of the company’s increasing
customers, new candidates are hired. However, it is observed that most of the new recruits are
inexperienced and inefficient. This leads to damage in the quality of the service provided by the
company (Niranjanamurthy et al. 2013). The decrease in customer satisfying will only be
increasing. There is a need to take the certain factors under control in this regard of company’s
expansion and growth. The risk associated with this specific issue obtained from the Risk
Exposure Calculator is 2.
Pressure point created by culture:
The most important aspects of the overall growth are culture and for the development of
the business, it is important that it is given priority. It is commonly observed that companies that
take culture of a place and its people into consideration, there is surely growth internally and
externally of the organization (Piola et al. 2016). In the Property millionaire as well, there is
requirement of the company to involve the cultural aspect of the company. Taking the culture of
Australia into consideration for the overall growth and the company’s development will certainly
be beneficial. There are three risks that are involved in this process, that are:
• Risk by the rewards for entrepreneurial risk-taking
• Risk by executive resistance to the unfavourable news
• Risk by the level of internal competition

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It is important to note that the company Property millionaire does not have the process of
providing a fixed salary to the company’s employees. The procedure of salary giving is a
commission process that is the number of clients an employee is able to work with (Malthouse et
al. 2013). Also, the employees are rewarded and appreciated on the basis of customers they
provide to the company. There are a few risk factors involved in this system that can cause the
company to lose valuable resources. All the managers of the company do not work in unison, and
they are unaware of many operations. Individual employees without the approval of higher
authority make decisions and carry out seminars which are not only inappropriate but also
doubtful. The Risk Exposure Calculator, therefore in this aspect gives a real score of 3.
The important to mention that various members of the company conduct in order to have
more customers attracted to the company. It is only when there are any sustainable results, they
approach the senior managers. However, it has also been observed that in case of any problem or
negative problem, the issue is never conveyed to the managers. Therefore, the company is
lacking the resistance to unfavourable news. This is a vital factor that meaningfully impacts the
company’s development in the long tenure.
The employees are provided commissions depending on the number of clients they bring
to the company, there is very high rate of competition. It is often noticed among the employees
adapting to a different sort of immoral as well as unethical medium to earn an extra sum of
money. Therefore, it can be stated that there are high risks on this specific aspect for the
company. The Risk Exposure Calculator for this specific factors has given the score of 3.
Pressure point created by information management:
One of the most important aspects of business is information management. Commonly it
is seen as a good opportunity that helps company grow when there is useful information

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management (Mathiyazhagan, Govindan and Noorul Haq 2014). The risk factors associated
under the area of information management are as follows:
• Transaction complexity and velocity
• Gaps in the performance of diagnostic
• The degree to which decentralized decision making is performed
To have more customers attracted to the company, the company employees conduct
seminars without the knowledge of the senior managers. It is crucial to note that various rules
and regulations in relation to the real estate business are constantly in a changing process.
However, property millionaire is not modifying and updating its data as per the information
available in the latest form by the government of Australia. It may become a concern for the
organisation in the long term. Thus, upgrading its database is an essential factor for the company.
The Risk Exposure calculator has presented the score in this context is 2.
Assessment of a company is essential for every organisation. Therefore, for Property
Millionaire, it is crucial that different regional managers have access to all the data of various
departments. This might reflect the fact that on differently fixed salary slabs too employees are
not working accordingly. It is a matter of concern for the company. Therefore, the Risk exposure
calculator has given the score on this aspect 3.
Also, the decision making, in every globally famous company relies on the higher
management team (Bower 2013). However, for Property Millionaire, it is observed that the
decision making is performed with various employees who are conducting seminars to attract
customers to their individual interest. The reporting of data and information to the regional
managers are only when there is some need. Hence, it is a concern that the company needs to

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take care. The power on the employee’s hand, who only aim to maximise their monthly profit is
a risk for the company the score of the company on this aspect by the Risk Exposure calculator is
2.
The above-discussed factors of the Property Millionaire, which combine every risk
factors of the company have provided the Risk Exposure Calculator have given total score of 25.
Recommendation:
The score means the company, in the Property millionaire is under the danger zone.
There is a need to review its policies and work environment. An important thing that is noted in
the company is the fact that the company does not provide a fixed salary to the employees. This
has more than one impact. Special attention is needed for the employees. There is need to
involve the cultural aspect of the company. Taking the culture of Australia into consideration for
the overall growth and the company’s development will certainly be beneficial. Also, efficient
information management is required for the company.
Conclusion:
From the above discussion, it can be concluded that risk assessment is significant part of
companies. This is an essential tool and helps companies amend their policies in order to achieve
their goals. The score provided by the calculator is helpful in determine the areas that need
attention in the organisation. Bringing change in the following regions help in having an overall
growth to the company.

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References:
Bower, J.L., 2013. Not all M&As are alike: And that matters. In Mergers & Acquisitions (pp. 27-
36). Routledge.
Brender, N. and Markov, I., 2013. Risk perception and risk management in cloud computing:
Results from a case study of Swiss companies. International journal of information
management, 33(5), pp.726-733.
Casson, M., 2013. The economic analysis of multinational trading companies. In The
multinational traders (pp. 36-61). Routledge.
Jensen, M.C., 2017. Value maximisation, stakeholder theory and the corporate objective
function. In Unfolding stakeholder thinking (pp. 65-84). Routledge.
Lozano, R., 2015. A holistic perspective on corporate sustainability drivers. Corporate Social
Responsibility and Environmental Management, 22(1), pp.32-44.
Malthouse, E.C., Haenlein, M., Skiera, B., Wege, E. and Zhang, M., 2013. Managing customer
relationships in the social media era: Introducing the social CRM house. Journal of Interactive
Marketing, 27(4), pp.270-280.
Mathiyazhagan, K., Govindan, K. and Noorul Haq, A., 2014. Pressure analysis for green supply
chain management implementation in Indian industries using analytic hierarchy
process. International Journal of Production Research, 52(1), pp.188-202.
Mishra, K., Boynton, L. and Mishra, A., 2014. Driving employee engagement: The expanded
role of internal communications. International Journal of Business Communication, 51(2),
pp.183-202.

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Niranjanamurthy, M., Kavyashree, N., Jagannath, S. and Chahar, D., 2013. Analysis of e-
commerce and m-commerce: advantages, limitations and security issues. International Journal
of Advanced Research in Computer and Communication Engineering, 2(6).
Piola, M., Prandi, F., Bono, N., Soncini, M., Penza, E., Agrifoglio, M., Polvani, G., Pesce, M.
and Fiore, G.B., 2016. A compact and automated ex vivo vessel culture system for the pulsatile
pressure conditioning of human saphenous veins. Journal of tissue engineering and regenerative
medicine, 10(3), pp.E204-E215.
Simons, R., 1999. How risky is your company?. Harvard business review, 77, pp.85-95.
Velasquez, M. and Hester, P.T., 2013. An analysis of multi-criteria decision making
methods. International Journal of Operations Research, 10(2), pp.56-66.
Wu, M., Frieboes, H.B., McDougall, S.R., Chaplain, M.A., Cristini, V. and Lowengrub, J., 2013.
The effect of interstitial pressure on tumor growth: coupling with the blood and lymphatic
vascular systems. Journal of theoretical biology, 320, pp.131-151.

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Appendix:
The Risk Exposure Calculator result of Property Millionaire