Risk Assessment Calculator Report: Corporate Governance & Ethics

This report provides a detailed risk assessment of Property Millionaires, an investment mentoring and seminar company experiencing rapid growth. The analysis examines various pressure points, including those related to growth, company culture, and information management. The report utilizes a risk assessment calculator to evaluate factors such as pressure for performance, rate of expansion, employee inexperience, entrepreneurial risk-taking, executive resistance to bad news, internal competition, transaction complexity, gaps in diagnostic performance, and the degree of decentralized decision-making. The assessment highlights potential threats and risks associated with the company's expansion, offering insights into how these factors impact the business's overall stability and success. The report concludes by summarizing the findings and offering recommendations based on the risk assessment calculator readings.

Running head: RISK ASSESSMENT CALCULATOR
CORPORATE GOVERNANCE & ETHICS
Name of the Student
Name of the University
Author note

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Executive summary
Success of any company brings a variety of risk associated with it and proper identification of
that risk led the company to grow its business properly. However, wrong judgment of risks led
the organization to face difficulties. This assignment discusses few of the risks that came along a
sudden success for a company namely property millionaires. The risk assessment calculator
further calculates the associated risks and then depending on the result the risk state of the
company was judged. Further, the risk calculator readings is attached in the appendix of the
assignment.

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Table of Contents
Introduction..........................................................................................................................3
The company background....................................................................................................3
Risk assessment of Property Millionaires............................................................................4
Pressure point due to growth...........................................................................................5
Pressure for performance.............................................................................................5
Rate of expansion........................................................................................................5
Inexperience of key employees...................................................................................6
Pressure point due to culture............................................................................................6
Rewarding entrepreneurial risk takers (Di Zhang and Swanson 2013).......................6
Executive resistance to bad news................................................................................7
Level of internal competition.......................................................................................7
Pressure point due to information management..............................................................8
Transaction complexity and velocity...........................................................................8
Gaps in diagnostic performances.................................................................................8
Degree of decentralized decision-making...................................................................9
Conclusion...........................................................................................................................9
References..........................................................................................................................11
Appendix............................................................................................................................14

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Introduction
Success is the best phase for any organization, as it brings several new opportunities to
grow and expand the reach of it. Growing revenues and increasing profit led the company to
utilize the opportunity and hire new workforce, increase their production scale and look for
opportunities for overall growth (Reason 2016). This phase seems better for any organization as
everyone associated with it feels that his or her future is safe. However, such growth brings
several negative aspects in the organization that can lead to serious threat and risks. It is very
important for the managers of those organizations to stay alert and understand the way such risk
can affect the business (Kaufman and Guerra-Lopez 2013). These risks are generally prevalent in
companies that are generally younger and having higher growth rates and the risk associated with
such companies can be external as well as internal. External risks are non-compliance with law,
ethical codes and market competition whereas internal risk factors are under-developed
infrastructure to withstand increased productivity or pressure, service quality and efficient
workforce (Sadgrove 2016). This assignment is going to discuss such a risky situation for a
company property millionaire and will discuss different aspects of risk associated with it.
Finally, a risk calculation will be done to develop this risk assessment report.
The company background
The company Property Millionaires is an investment mentoring and seminar company,
which was developed by the real estate developer George Kirzner, three years ago. This
company helps people to invest in properties and suggest safe and successful ways to become
millionaire. The company believe on the philosophy that every individual have the ability to
become successful with proper education, mindset and support and they provide the support to

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those individuals. Suddenly the company started growing and the need of expansion becomes
higher. However, George marked this situation as risk for the organization. The reason behind
this was lack of trained employees and infrastructure to handle such increased load. However,
the regionals managers were not that serious regarding the situation, George made the staff
serious, and alert as it was essential for the organization to deliver strong financial performance.
Such situation led George to hire consultants with some company staff having little to no
experience in sales.
Risk assessment of Property Millionaires
Risk assessment is an important tool that is used to identify, assess and rate the risks
faced by organizations while processing, financially growing or complying with the law or ethics
of the business. It helps the organization by providing a complete structure that provides
complete information about associated risks, its implications and means to mitigate such risk
factors. Risk exposure calculator helps to understand the ability of the company to identify
situations that can lead to risks for the company’s strategy and performance (Harvard Business
Review 1999). This calculator is divided into three sections denoting internal pressure. These are
pressure due to excessive growth, pressure due to culture and pressure generated by financial
management. As success hits the company, people associated with it starts making mistakes
knowingly or unknowingly. Risk assessment calculator helps to understand the level of their
mistakes and rates those actions on a scale of 5, where 5 denotes higher risk. Further, depending
on the sections and sub-section ratings of risk assessment calculator, a total score is calculated in
which score 9-20 is determined as safe zone whereas, score 35-45 is denoted as the Roles of
these aspects with respect to Property Millionaires Company is mentioned below (Harvard
Business Review 1999).

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Pressure point due to growth
When a business starts growing beyond the expectations of its leaders or its employees,
risk associated with pressure increases. This pressure generates as the market suddenly starts
betting on the company and the leaders of the company set new goals and sales targets that
creates a set of pressures for the organization and he employees. These are pressure to perform,
pressure to increase or to cope up with the rate of expansion and pressure related to the lack of
experiences of its employees (Winston and Cahill 2012).
Pressure for performance
In Property Millionaires, while facing the market push, the CEO George wanted each of
the employee to take account of their work and deliver best possible financial performance. This
led the employees to face a huge pressure as maximum of the employees were hired after the
company started expanding and they did not had enough experience to deal with such pressure
(Hall and Wagner 2012). Furthermore, the company hired a set of consultants who used to set
difficult sales goals and targets after being approved by the senior management or the CEO.
Therefore, according to the risk assessment calculator, this section had higher risk rating that is
5.
Rate of expansion
The property millionaire company was a mid-sized business that employed 100
employees having proper knowledge and capacity to work in pressure, before the sudden
expansion started. The company’s sales started growing and expansion occurred more than the
capacity of the organization to hire or train new employees to deal with the growing pressure
(Eliasson 2012). Therefore, the pressure of expansion was clearly visible on George, the CEO.

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He employed few consultants to train and hire employees and set sales targets for them. Hence,
on the risk assessment calculator, the rate of expansion pressure scores 4 and it denotes that
company was at risk related to the pressure of expansion.
Inexperience of key employees
After the unexpected success of the company lead by George, the company started facing
pressure to perform more and establish itself in the market risk. The market also started believing
in the company and therefore the rate of expansion becomes uncontrolled. In such situation, the
owners were suggested to employ people having less or no experience of sales, as there were
more demands than the tenured and experienced employee can withstand (Mascini and Bacharias
2012). Furthermore, the higher authorities such as senior managers and junior managers lacked
effective communication that showed their inability to withstand excess growth pressure.
Therefore, according to the risk assessment calculator, this aspect of Property Millionaire
Company deserves 4, as the consultants and the CEO took their job seriously and tried their best
to overcome the risks.
Pressure point due to culture
This pressure point is related to the cultural risk and the amount of risk a company takes
while implementing innovation and creativity. This pressure is crucial as the company reputation
and finance is at stake while combating this pressure (Baer 2012). There are several factors
associated with the risk such as rewarding the entrepreneurial risk taker, executive resistance to
bad news and the level of internal competition.

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Rewarding entrepreneurial risk takers (Di Zhang and Swanson 2013)
In the Property Millionaire organization, the business was entirely based on new seminars
on different properties and the senior management team and the CEO George used to prepare
seminars. This senior management team of the organization was risk taking and while working in
the team they were able to maintain autonomy. This was the only negative thing about them as it
increases the frequency of failed seminars. Therefore, on the risk assessment calculator this
aspect can be rated as 2, as they had the capability to perform and take risk.
Executive resistance to bad news
In the context of the given organization, the managers were not prepared for the sudden
expansion and were into following the instructions from George. Further, the senior management
team, who worked individually despite of being a team, were not serious enough about the
failure of the new seminars . Therefore, they were resistant to bad news and failure did not
hampered their mental stability and hence, on the risk assessment scale they are being given 2
points (Leveson 2015).
Level of internal competition
In the organization after facing an up rise in the market, the company hired consultants,
who used to assign targets related to sales to the employees and the senior management approved
these targets. The payment of these consultants were solely based on the targets or clients they
used to brought for the organization. The regional manager used to rate these consultants
depending on their performance and the consultants used to be rewarded with special treatment.
Therefore, the competition between employees were at higher point as the competition was

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ruthless and harsh instead of healthy and progressive. Therefore on the risk assessment scale, the
competition level related risk scores 5 (Bombardini and Trebbi 2012).
Pressure point due to information management
Within a company, the flow of information should be appropriate and managed by a
trained and experienced authority so that the information can be utilized by the organization for
growth and development. The risk factor associated with the information management are
transaction complexity and velocity, gaps in diagnostic performances and the degree of
decentralized decision-making (Haimes 2015).
Transaction complexity and velocity
As the company, Property Millionaires started growing beyond the expectations, the
company stared facing issues related to transactional complexity. Primarily the company used to
provide guidance to people for their property related investments on small level. However, after
expansion and addition of newer set of consultants who used to provide seminars to those client
to sell property, lead the organization to face problems related to transactions. Several clients
were not happy with the seminars and rejected to invest in the property. Therefore, speed of
growth and the transactional complexity hampers the business and therefore it is rates score 5 on
the risk assessment calculator.
Gaps in diagnostic performances
It is evident from the given case study of the company that there were a gap of effective
communication between the senior management and the regional managers, which created a lack
of diagnosis of performances. The regional managers unable to view the consultants or other

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employees work records and were kept busy with unanticipated emergencies. Furthermore, they
had minimum sense of corporate strategies (Shinkle 2012). Therefore, on the risk assessment
calculator, these gaps are given the highest score, 5.
Degree of decentralized decision-making
Decision-making is the crucial part for any organization’s success as proper and correct
decisions taken in the favor of the company can lead to success (Ford and Richardson 2013). In
the property millionaires company, it is evident that every employee worked according to the
decision of their higher authority. The senior management used to prepare seminar, however they
were unaware of the expertise of the consultants. On the other hand, the consultants used to bring
clients just to earn incentives and appreciation at the moth end from the regional manager.
Therefore, decision-making skill lacked in the authority as well as the employees and therefore
on scale of risk assessment it is given 5 points.
Therefore, after assessing all these risks associated with Property Millionaires Company,
the total estimated risk score in risk calculator becomes 37. This score indicates that the company
is at higher risk with respect to pressure related to growth, culture and information management.
The score 37, denotes that the company is at danger zone and it should focus on its defense as
well as risk management system to protect their organization from forthcoming disaster (Harvard
Business Review 1999). The protection can be achieved by employing highly experienced
people in the service or implementing a strict monitoring system to not to compromise with the
quality service and further dealing in processes that the organization is famous for, other than
innovations and experiments.

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Conclusion
Risks are associated with success and therefore, it is important for the leaders of the
organizations to be aware of the situations that need to be controlled within the organization to
survive the risky situation. As the risks generated inside the organization, harms more than the
external risks, interventions to fight the internal risks should be informed to every employee. in
such situation, the risk assessment calculator helps to understand the factors that affects the
business and depending on the scores given in that scale, the companies risk situation is
determined. This assignment dealt with a case study of company Property Millionaires, which
after sudden success faced many risks related to pressure, culture, performance and information
management and these pressures are described properly in the assignment with respect to the
company. Further, a total score of risk was obtained from the risk assessment scale and it was
found that the company is at higher risk. The risk assessment calculator data is being presented
in the appendix section of the assignment.

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References
Baer, M., 2012. Putting creativity to work: The implementation of creative ideas in
organizations. Academy of Management Journal, 55(5), pp.1102-1119.
Bombardini, M. and Trebbi, F., 2012. Competition and political organization: Together or alone
in lobbying for trade policy?. Journal of International Economics, 87(1), pp.18-26.
Di Zhang, D. and Swanson, L.A., 2013. Social entrepreneurship in nonprofit organizations: An
empirical investigation of the synergy between social and business objectives. Journal of
Nonprofit & Public Sector Marketing, 25(1), pp.105-125.
Eliasson, G., 2012. Firm objectives, controls and organization: the use of information and the
transfer of knowledge within the firm (Vol. 8). Springer Science & Business Media.
Ford, R.C. and Richardson, W.D., 2013. Ethical decision making: A review of the empirical
literature. In Citation classics from the Journal of Business Ethics (pp. 19-44). Springer,
Dordrecht.
Haimes, Y.Y., 2015. Risk modeling, assessment, and management, 4th Edn, pp. 345-389, John
Wiley & Sons.
Hall, J. and Wagner, M., 2012. Integrating sustainability into firms' processes: performance
effects and the moderating role of business models and innovation. Business Strategy and the
Environment, 21(3), pp.183-196.

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Harvard Business Review 1999. How Risky Is Your Company?. [online] Harvard Business
Review. Available at: https://hbr.org/1999/05/how-risky-is-your-company
Kaufman, R. and Guerra-Lopez, I., 2013. Needs assessment for organizational success, 1st Edn,
pp. 25-57, American Society for Training and Development.
Leveson, N., 2015. A systems approach to risk management through leading safety indicators.
Reliability Engineering & System Safety, 136, pp.17-34.
Mascini, P. and Bacharias, Y., 2012. Integrating a Top‐Down and a Bottom‐Up Approach:
Formal and Informal Risk‐Handling Strategies in a Utility Company. Risk Analysis, 32(9),
pp.1547-1560.
Reason, J., 2016. Managing the risks of organizational accidents, 1st Edn, pp. 123-145,
Routledge. Sadgrove, K., 2016. The complete guide to business risk management, 3rd Edn, pp.
245-267, Routledge.
Shinkle, G.A., 2012. Organizational aspirations, reference points, and goals: Building on the past
and aiming for the future. Journal of Management, 38(1), pp.415-455.
Winston, W. and Cahill, D.J., 2012. Internal marketing: Your company's next stage of growth, 1st
Edn, pp. 245-289, Routledge.

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Appendix
Risk assessment calculator (and the calculation of risk of
Property Millionaire Company