Risk Analysis: Trading.com's Growth, Culture, and Information Risks

This report presents a risk assessment of Trading.com, a company offering share investment courses. The analysis employs a risk exposure calculator to identify pressure points related to growth, culture, and information management. The report reveals that Trading.com is in a high-risk zone, with its culture posing the greatest threat. The assessment highlights the impact of aggressive sales targets, rapid expansion, and inexperienced employees on growth. Cultural risks stem from executive resistance to bad news and internal competition. Information management challenges include complex transactions and decentralized decision-making. The report concludes with recommendations to mitigate these risks and protect the company's performance and health.

Risk Assessment

EXECUTIVE SUMMARY
The present report summarized various risk elements which can affect Trading.com
negatively. It discussed that risk exposure calculator is an effective tool which can be used or
assessing various pressure point related to growth, culture and information management system
in a company. In context to this the selected company was analyzed and scored to determine
level of risk Trading.com has developed. The report identified that riskiest area for cited
company is its culture. In order to avoid and eliminate any kind of harm to health of the business
it is very essential to manage and control this pressure point along with the other risk elements
such as pressure of growth and information management.

TABLE OF CONTENTS
EXECUTIVE SUMMARY ............................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
RISK EXPOSURE CALCULATOR ..............................................................................................1
RISK EXPOSURE OF TRADING.COM.......................................................................................2
A. Pressure points due to growth ...........................................................................................2
B. Pressure points due to culture............................................................................................3
C. Pressure points due to information management ..............................................................3
RESULTS OF RISK ASSESSMENT ............................................................................................5
CONCLUSION ...............................................................................................................................6
RECOMMENDATION...................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Risk is a major element that affects each and every type of business or organisation. It is
important to identify the risk to manage or control them so that it cannot affect the business
negatively. The managers of a company need to analyse risks and develop effective strategies to
overcome any threats or danger for the organisation (Wright, 2018). This report is in context to
Trading.com, a company that offers share investment courses and mentoring services to ordinary
people. The cited organisation was established three years ago by successful share trader Mr.
Jospe Drake. He developed his company into a medium sized business by employing more than
100 employees for the offices in Sydney, Melbourne, Adelaide and Brisbane. This report will
assess the risk in Trading.com by using risk exposure calculator in order to identity the various
hazards involved in the business and its activities.
MAIN BODY
RISK EXPOSURE CALCULATOR
The risk exposure calculator is a tool that is used for gauging an organization's likelihood
of being amazed by breakdowns or errors that may negatively affect or become a threat for the
company's strategy or franchise. The calculator can be used easily; it consists of various keys or
elements which needs to be rated from 1 to 5. Total score at the end identify the risk level a
company can face (Petit and Lewis, 2017). According to the total score of this calculator there
are three categories in which a level of risk for company can be determined as below -
1. The safety zone (Score 9 to 20) – The organizations that have a low level of risk are
probably safe from unexpected events or errors that can negatively influence health of the
company or business comes under this zone. Although, it is essential to analyze reason of
low risk for the business to maintain effective functioning of the firm.
2. The caution zone (Score 21 to 34) – Most of the businesses falls in this category which is
also referred as middle zone. Managers of a company needs to be alert for high scores in
any two out of the three risk attributes. For example – if an organization has a high score
on both culture and growth but the total score is below 35, there is still a high risk and
reason to consider for the business (Epstein, 2018).
3. The Danger zone (Score 35 to 45) – It is highest level of risk assessment, if a company
falls under this zone it is time to take fast actions to protect business. There are various
1

levers which are essential to use by organizations in this category including, belief,
diagnostic and boundary systems along with some tradition internal controls (Glance,
Dick and Osler, 2018).
RISK EXPOSURE OF TRADING.COM
A. Pressure points due to growth
Fast growing organizations generally develop exiting and intense working environments.
These companies attract the interest of capital markets and employees similar in order to develop
plans that assist in growth and development (Concept of risk exposure, 2016). Pressure to attain
challenging goals and objectives can stimulate superior financial performance, innovation and
entrepreneurial creativity is managed effectively. But such pressure can also create and bring
unintended risk for the business. In the case scenario of Trading.com, the owner of company
needs to develop and achieve growth of the organization. The increasing need of more
consultants has strained company to reduce their standards of employment. Total Score for the
cited firm in the pressure for growth is 12. There are three segments under this category as
discussed below -
1. Pressure for performance – Consultants in the Trading.com company are given high and
aggressive sales target by the senior management team along with no or littler input form
consultants themselves as well as regional managers. Due to this pressure employee gets
demotivated and dissatisfied as there is high work load upon the employees who are less
experienced (Thomsett, 2018). The score of this pressure in the cited company is 4.
2. Rate of expansion – The expansion rate is also an important segment of Growth
dimension, it includes the pace in which a company is trying to grow and develop. In
order to achieve growth Trading.com recruited employees lowering their employment
standards and increasing their sales target. Jospe also changed the remuneration structure
and implemented a base salary of $30000 per annum for the consultants. Score for this
segment is 3.
3. Inexperience of key employees – Consultants of the organization were hired by lowering
the employment standards they have little or no experience of sales. It’s difficult for them
to achieve aggressive targets without any experience in the same field (Díez-Esteban,
Farinha and García-Gómez, 2018). It develops a high risk of employees leaving the
2

company or lack of performance. The score for this segment is 5 for Trading.com that is
the highest on this scale.
B. Pressure points due to culture
Culture is also an essential area within an organization or business, it can affect a
workplace negatively or positively. It plays a major role in developing a risk for the company
such as Trading.com has various regional managers and a senior management team that changes
their attitudes or behaviors that affects employees as well as their performance. The managers
can calculate a score for this pressure point by determining the percentage of the organization
which is based on new services and products that have been generated by efforts and
contribution of risk-taking & creative employees in the company. The overall score for this
segment is 14 that states that it is creating higher level of risk as compared to other categories.1. Rewards for entrepreneurial risk taking – Trading.com scores 5 in this pressure point, the
entrepreneur achieve rewards such as high profit, growth and development by taking risk
(Stanhope, Carver and Weinstein, 2018). These rewards created a pressure on the head of
department to take risk related to the business (Hopkin, 2018). It is one of the highest
risk point in culture dimension.2. Executive resistance to bad news – This pressure point states the level at which
employees of a company resist to hear a bad news. The regional managers working
within Trading.com highly resist any bad news, they only want to hear yes mam and yes
sir from their subordinated or other low level employees. Score for this pressure point is 5
which is the highest.
3. Level of internal competition – It is another pressure point related to culture within an
organization, the level of competition can create a risk for developing an unsuitable
working environment within the organization (Eberhart, Eesley and Eisenhardt, 2017).
The score for this pressure point is 4. The regional managers and senior management
team are highly competing with each other to obtain more benefits from the company in
terms of rewards and salary.
C. Pressure points due to information management
The last set of pressures within risk exposure calculator is related to the flow of data and
information in the organization such as Trading.com. In other words, when system to manage
3

information is not effective, improper or inadequate risk factors arises. There are very essential
and important information or data needs to be managed effectively in an organization so that risk
and threats can be avoided. Inadequate and overloaded computer system can damage essential
data of the business leading towards a risk of harm to the health of business. The overall score
for this segment is 9.
1. Transaction complexity and velocity – This pressure point also achieved a high score
which is 4 out of 5. The increasing complexity due to highly leveraged derivative
financial products such as instruments that change its value on the basis of fluctuation in
the values of other assets (Risk assessment, 2016). It influences an organisation to sustain
substantial losses, the operations of Trading.com is faster than its capacity which is a
huge issue for the employees to deliver strong performance. Increase in the velocity and
volume of transaction can also refer to success of an organisation that generally overload
information systems of a business. Manager cannot get enough opportunities to analyse,
monitor and measure each and every transaction related to the company.
2. Gaps in diagnostic performance measures - Performance measurement helps in
identifying employee’s efforts and contribution within an organisation with respect to
their roles and responsibility. The score obtained by Trading.com in this point is 3 which
is moderate, due to recruitment of new and inexperienced consultants along with
increasing operations or sales target it has been difficult to measure performance of the
employees, this can be a risk for good health of an organisation as it is essential to
identify whether employees are accomplishing their targets or objectives or not (Gap
diagnostic, 2016).
3. Degree of decentralised decision making – The senior management team and regional
managers in the cited company does not have a well-defined information channels for
sharing ideas, toughs and data among them (Risk exposure, 2016). The senior
management team is developed by a risk taking and creative group of shares investors.
These members do not act as a team but a great autonomy is given to them which let
them to take decisions independently. Therefore, it can be concluded that decentralised
decision making process of the company is a high risk factor (Risk calculator, 2017). It
can limit the innovation, creativity and strategies, in order to achieve new and unique
4

ideas an organisation should develop a centralised decision making process. The score for
this pressure point is 4 which is at a higher side and can be risky for Trading.com.
RESULTS OF RISK ASSESSMENT
Illustration 1: Risk exposure calculator
5
GROWTH
CULTURE
INFORMATION MANAGEMENT
Pressure for
performance
4
Rate of
expansion
3
Inexperience of key
Employees
5
Rewards for
Entrepreneurial risk taking
5
Executive resistance to
Bad news
5
Level of internal
Competition
4
Transaction, complexity and
Velocity
4
Gaps in diagnostic
Performance measures
3
Degree of
decentralised
Decision making
4
12
14
11
TOTAL SCORE 37

Trading.com scores 37 out of 45 in risk assessment calculator that states that the
company is at a high risk zone and needs to take quick action for sustaining its business.
Organization possess maximum risk by pressure points due to culture of the company. The
company needs to ensure that it reduces the rate of these points so that it can eliminate any kind
of harm to functions and good health of the business. Jospe focuses on growth of the
organization which is not much supported by regional managers. Due to the increase in need of
consultants Trading.com has lower its employment standards by recruiting many new individuals
with no or little experience in sales. Growth and information management also includes pressure
points that can develop potential risk for Trading.com.
CONCLUSION
The above risk assessment report concluded that Trading.com is at a danger or high risk
zone that can be very harmful for the company's good health or performance. This report
presents a detailed assessment of risks which can negatively affect the chosen organization, risk
exposure calculator is used in order to identify various pressure points related to information
management, culture and growth of the company.
RECOMMENDATION
It is very essential for Trading.com to manage and control the risks identified by the risk
exposure calculator, there are various ways in which the company can minimize the negative
impact of the risks on the business.
 The company can standardize analytic functions or processes in their business activities
by developing and using specific employment policies or standards to recruit new
employees in the company (Risk exposure, 2016).
 It can conduct team building activities or programs such as group discussions, seminars
and on job training to develop trust and healthy relationship with the employees of the
company.
6

 Centralized decision making process should be used in the organization by involving
employees of every level or department of the company to develop innovative, new and
unique strategies for Trading.com.
 Using new technology such as online data base system or communication channel can
also help in minimizing risk related to information management in the company.
7

REFERENCES
Books and Journals
Díez-Esteban, J.M., Farinha, J.B. and García-Gómez, C.D., 2018. How does national culture
affect corporate risk-taking?.Eurasian Business Review. pp.1-20.
Eberhart, R.N., Eesley, C.E. and Eisenhardt, K.M., 2017. Failure is an option: Institutional
change, entrepreneurial risk, and new firm growth. Organization Science. 28(1). pp.93-
112.
Epstein, M.J., 2018. Making sustainability work: Best practices in managing and measuring
corporate social, environmental and economic impacts. Routledge.
Glance, L.G., Dick, A.W. and Osler, T.M., 2018. Risk Prediction Tools, tThe Need for Greater
Transparency. . Anesthesiology: The Journal of the American Society of
Anesthesiologists, 128(2), pp.244-246.
Hopkin, P., 2018. Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. Kogan Page Publishers.\
Petit, F. and Lewis, L.P., 2017. RISK MANAGEMENT AND BUSINESS CONTINUITY
ASSESSMENT: IMPORTANCE OF CONSIDERING LOGICAL
INTERDEPENDENCIES. Critical Infrastructure Protection Review, p.29.
Stanhope, J., Carver, S. and Weinstein, P., 2018. 384 The risk business of being an
entomologist: a systematic review.
Thomsett, M.C., 2018. Market Risks. In The Complete Options Trader (pp. 25-53). Palgrave
Macmillan, Cham.
Wright, J.F., 2018. Risk management; a behavioral perspective. Journal of Risk Research, 21(6),
pp.710-724.
Online
Gap diagnostic. 2016. [Online]. Available through:<http://www.gapinternational.com/the-
performance-diagnostic>.
Risk calculator. 2017. [Online]. Available
through:<https://riskcalculator.facs.org/RiskCalculator/>.
Risk exposure. 2016. [Online]. Available
through:<https://professional.heart.org/professional/GuidelinesStatements/
ASCVDRiskCalculator/UCM_457698_ASCVD-Risk-Calculator.jsp>.
8

Risk assessment. 2016. [Online]. Available
through:<https://www.ccohs.ca/oshanswers/hsprograms/risk_assessment.html>.
Risk exposure. 2016. [Online]. Available
through:<https://rospaworkplacesafety.com/2013/01/21/what-is-a-risk-assessment/>.
Concept of risk exposure. 2016. [Online]. Available
through:<https://www.whitehatsec.com/glossary/content/risk-exposure>.
9