MBA402: Risk Assessment Report of Trading.com Analysis

This report presents a risk assessment of Trading.com, a fictional investment training company, as per the requirements of the MBA402 course. The analysis utilizes the Risk Exposure Calculator, focusing on pressure points stemming from growth (performance, expansion, employee experience), culture (entrepreneurial risk, bad news resistance, internal competition), and information management (transaction complexity, diagnostic gaps, decentralized decision-making). The report evaluates the company's current risk exposure, identifies key vulnerabilities, and provides insights into how Trading.com can mitigate potential threats. The report emphasizes the importance of addressing these pressure points to ensure the company's long-term stability and success, and it includes a risk exposure value of 36, placing the company at the tip of the danger zone. The report also includes a comprehensive list of references from academic journals and textbooks to support its findings.

Running head: RISK ANALYSIS REPORT
RISK ANALYSIS REPORT
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction..........................................................................................................................2
Discussion:...........................................................................................................................3
A brief summary of the Organisation:.............................................................................3
A. Pressure points related to growth...........................................................................3
B. Pressure points related to culture...........................................................................5
C. Pressure points due to information management...................................................6
References............................................................................................................................9
Appendix............................................................................................................................11

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Introduction
The success and the failure of an organisation depends on the way an organisation is
managed, operated, monitored and functions. The success of an organisation many a times
overlooks the loopholes within an organisation and it exposes the company or the organisation to
risks that leave the organisation with very few chances of recovering. It is therefore highly
important to understand that any organisation should be able to find out the major loopholes in
its organisational structures and operations to weed out any operations or procedures to reduce
the risk that the company might be exposed to. The most important aspect behind the success of
any organisation is the regular monitoring and managing of the organisation to restrict any
operational failures or discrepancies. The timely management and review of the procedures can
be reduce the amount of risk that any organisation is exposed to and therefore allows for the
growth of the company in appositive manner. This report will analyse the risk that a fictional
organisation is exposed through the risk exposure calculator and will evaluate the various
pressure points that determine the amount of risk any organisation is exposed to and is based on
the values that the pressure points return depending on the scenario of the organisation.
Discussion:
A brief summary of the Organisation:
Trading.com is a form that deals with investment courses to the common public in order
to enrich their idea about the investment and trading in stock markets. The company is built with
the idea that a common man can also invest in shares when the right amount of knowledge and
information is given. Based on this concept the company offers training and educative courses on

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investment which is the main business idea of the company. The founder of the company Joseph
Drake had formed the company by believing in this idea and the company have achieved success
within a short period of time and have expanded rapidly. The company has expanded over to
four locations and have increased to over 100 staffs and have expanded their operations in
Adelaide, Brisbane, Melbourne and Sydney. The last three years have seen considerable growth
in the company and the organisation has developed considerably without taking into account the
rate of growth and the rate of infrastructural competency. This has exposed the company to
eminent risks which will be discussed in the subsequent sections. With an immense increase in
business the company has failed to keep a track of the operations, the lack of communications
and the lack of transparency within the organisation has degraded the working culture of the
organisation and has allowed to develop certain issues that expose the company to a risky
environment. Though the company has succeeded in the growth of the organisation, the
overlooking of the drawbacks and negative work cultures have degraded the growth of the
company. The following sections will look into the various pressure points and will be scaled
according to the condition of the company and the exposed risk of the company would be
calculated.
A. Pressure points related to growth
The growth of any organisation is related to the functioning of the organisation and it
depends greatly on how the organisation is managed, operated and functioned through the
management of the issues. Any organisation during its growth fails to identify the various
pressure points that develop due to the growth. The success of the company comes with
consistent performance of the employees, the growth of business and thereby the expansion of
the organisation to meet the demands of the company. The growth and success of any

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organisation leads to several factors that can expose the company or the organisation to eminent
risks. The organisational growth of a company leads to the development of certain pressure
points which if unchecked can expose the company or the organisation to eminent risks that can
be detrimental for the company over the long run. The most important aspect that has to be
understood and examined in order to evaluate the risk that any company is exposed to. There are
various pressure points that are generated due to growth. This includes the pressure for
performance, rate of expansion and inexperience of key employees. With an increase in growth,
the pressure of performance increases and this performance is a pressure points that exposes the
company to eminent risk. With increasing growth of a company, the performance pressure of the
employees leads to situations that expose the company to growth. The company Trading.com has
high performance pressure among the employees and can be valued at 5.
The rate of expansion is also one of the major important aspect that determines the risk of
a company. The rate of expansion in a company during its growth can be a risk if the growth is
not relative to the business that is being generated. The rate of expansion of trading.com has been
done at a rate that has completely disregarded the competency of the organisation. The company
has grown considerably but has failed to manage resources and employees according to their rate
of expansion. The company has expanded to four different locations and have developed
enormously without analysing the capacity and competency of the company. The unusual rate of
growth of the company has led to mismanagement within the organisation. This has allowed for
the development of discrepancies in operations and business within the organisations and the
Trading.com has expanded without evaluating its competency. This rate of expansion can expose
the company to eminent risks. The risk of Trading.com due to rate of expansion can be rated at 5.

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The experience of key employees in the organisation is also one of the major attribute
that determines the risk that an organisation is exposed. The company Trading.com is a new
organisation and most of the employees have very less experience in the company. The number
of inexperienced employees can expose the company to risks and the risk of trading.com can eb
rated at 4.
 Pressure for performance: 5
 Rate of expansion: 5
 Inexperience of key employees: 4 (Appendix 1: The Risk exposure Calculator)
The growth of a company is affected by these pressure points and relates greatly to the
development of the issues which have been discussed above. The pressure for performance being
one of the major pressure points that decides the growth of the company and it has to be
understood by the managers that the pressure for performance needs to be managed in such a
manner that there pressure is transformed into a positive working culture and motivation for
performance. It should also be kept in mind that the pressure for performance in should not
create a space for unscrupulous practices or unethical work practices. Along with the rate of
expansion should not oversee the capacity to manage the expanded resources. This would only
aggravate the situation and make the management of the resources even more difficult creating a
risk for the company. The inexperience is next issue that should be taken as a pressure point for
growth since the development is greatly dependent upon the experience of the employees. The
experience of the employees are investments of the company which allow the company to
increase work efficiency and reduce the risk of failure or risk of losses that occur due to reasons
of incompetency or incapacity. The inexperience of key employees makes this a major aspect of
pressure point that increases the risk of a company.

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B. Pressure points related to culture
The pressure point related to culture include risks for taking entrepreneurial risks, for
resistance toe bad news by the executive and for the level of internal competition. These factors
are also one of the major aspects that determine the rate of risk any organisation is exposed to
and therefore the culture in any organisation is greatly decides the risk of the company and it is
important to balance the culture accordingly. The rating for risks due to culture for the company
Trading.com can be allotted as follows:
 Rewards for taking entrepreneurial risk: 3
 Executive resistance to bad news: 4
 Level of internal competition: 5 ( Appendix 1The Risk exposure Calculator)
The level of risk being associated with the culture of the company make it all the more important
to be managed effectively by understanding the impotence and degree of freedom that must be
allowed to analyse the reward for taking innovative risk and initiatives. The resistance due to bad
news or negative publicity is one of the major reasons that should be taken care of with utmost
care since the brand value and the image of the company is associated with it.
C. Pressure points due to information management
 Transaction complexity and velocity: 4
 Gaps in diagnostic performance: 3
 Degree of decentralised decision making: 3 (Appendix 1The Risk exposure Calculator)
The Risk Exposure Tool has evaluated the Risk Exposure Value of Trading.com at 36
which is the just the tip of the danger zone (Appendix 1) and the company management is should
immediately work towards restructuring the organisation to eliminate the eminent risk that it is

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exposed to. The value of 36 should make the managers aware of the ongoing danger that the
company is exposed to and the levers of control should be implemented by reanalysing the belief
systems, the boundary systems and the diagnostic control systems. It is only with this belief
systems that the company can cross check its gaps and evaluate the steps that needs to be revised
or re structured in order to reduce the risk or danger that the company or the organisation is
exposed to and thereby allow the company to revive itself from a losing position to a gaining
one.

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References
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innovativeness, proactiveness, and risk‐taking: Fostering entrepreneurial orientation in
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Review, critique, and research directions. Long range planning, 48(4), pp.265-276.
Cardona, O.D., 2013. The need for rethinking the concepts of vulnerability and risk from a
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p.225.
Kayworth, T. and Whitten, D., 2012. Effective information security requires a balance of social
and technology factors.

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Power, M., Ashby, S. and Palermo, T., 2013. Risk culture in financial organisations: A research
report. CARR-Analysis of Risk and Regulation.
Simons, R. (2018). How Risky Is Your Company?. [online] Harvard Business Review. Available
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Teece, D., Peteraf, M. and Leih, S., 2016. Dynamic capabilities and organizational agility: Risk,
uncertainty, and strategy in the innovation economy. California Management Review, 58(4),
pp.13-35.
Thalmann, S., Manhart, M., Ceravolo, P. and Azzini, A., 2014. An integrated risk management
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force. Industrial Marketing Management, 43(1), pp.113-125.

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Appendix
1. The Risk exposure Calculator

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