University Risk Assessment Report for Trading.com - MBA402

This report presents a comprehensive risk assessment of Trading.com, a fictional company experiencing rapid market growth. The analysis identifies key risks related to strategic, compliance, operational, and financial aspects, focusing on pressure points stemming from growth, cultural factors, and information management. The assessment framework evaluates the likelihood and magnitude of various threats, including employee management, expansion rate, executive inexperience, internal competition, and information complexities. The report emphasizes the need for improved communication, resource allocation, and risk management procedures to mitigate potential failures. The study also highlights the importance of addressing customer feedback, improving employee management, and fostering a more supportive internal environment to ensure long-term sustainability and success for Trading.com.

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...............................................................................................................................4
Feasible risk of trading.com............................................................................................................5
Risk management procedure of the company..................................................................................6
Likelihood of threat......................................................................................................................6
Threat Likelihood.........................................................................................................................6
Magnitude of the impact of risks.....................................................................................................7
Pressure points out of growth factors...........................................................................................7
Pressure points because of cultural factors..................................................................................9
Pressure points because of information factors..........................................................................11
Reference List................................................................................................................................13

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GOVERNANCE, ETHICS AND SUSTAINABILITY
Introduction
The current article makes a detailed assessment of the risk associated with the business activities
of the organisation trading.com. Most of the business risks, concerned here, are related to the
operations of the organisation. The aim of this report is to understand the risk related to business
operations of trading.com and provide a suitable analysis of the rest under the risk assessment
framework. The primary standpoint of the provided case study is that the organisation,
trading.com has experienced severe market growth in a very short amount of time. Nevertheless,
analysing the market expansion gained by the organisation and the business prospect of the
company, it will be depicted in the report that there exists a wide gap between the competence
and the demand of the clients. The currently existing company do not have the necessary
resources to serve the big client base because of two major factors, which are the expertise of the
localised management as well as the lack of proper communication between the lower and the
upper layers of organisation.
The provided case study shows thattrading.com should apply corporate level Strategies for
resolving the business issues that exists in the internal atmosphere of the organisation. The major
problem is that the communication between executive operational and the higher level managers
is very weak because of which the lower level employees have to suffer. The client base is
increasing because of which the pressure of sales is also increasing (Dionne 2013). However,
with the Limited employees, the organisation is not able to serve the customers properly because
of which consumer feedbacks are reportedly coming.
Based on the above risk, identified in this section, risk management Framework will be
implemented in this report.

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GOVERNANCE, ETHICS AND SUSTAINABILITY
Risk assessment
As highlighted by Kardes et al. (2013), business risk of the company evident and such risks can
lead the company to success or become the cause of negative consequences also. Hence, it
should be noted that business events should be analysed when they have definite impact on the
operations only. That is why risk management can be considered to be the most suitable
techniques for management of such business risk.
Risk management technique causes what can be the possible wrong outcomes for the
organisation and how negotiation strategies can be developed for that. Business organisations
can always experience critical race because of which risk management should be an essential
component of internal management of organisations.
In this context, researchers like Kardes et al. (2013), thinks that risk management procedures
help an organisation to understand the potential risk as well as address those strategies that can
help in mitigation of those risks as well. In the case study, the organisation experienced
increasing sales; however there is a risk of failure because lack of Management and
communication in the internal atmosphere of the organisation is evident. In this report, and
analysis of the risk factors of trading.com has been done in context to the risks related to the
feedback that the customers have provided in resentments to the kind of service received by them
and the customer management strategies which the organisation has implemented from their end
for retaining them. The risk which is identified in report will be analysed on the basis of the
likelihood of their occurrence. Strategies for preventing the risk as well as the events associated
with the rest have also been provided in the report. Lastly, on the basis of the risk management
framework applied here for Risk management, related approaches as well as control measures
have been highlighted also.

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GOVERNANCE, ETHICS AND SUSTAINABILITY
Feasible risk of trading.com
The major categories of risk which trading.com can endure, the includes strategic, compliance,
operational as well as financial risks.
Strategic
According to the ideas of Lam (2014), Consultancy service for financial investment is attracting
for large number of people. Hills, the consultancy companies suffer from effective market
competition. It can be identified that in order to maintaining domination on the market, several
other companies will show challenges to trading.com. The customers are very cautious about
choosing the consultancy companies. However, it is challenging for the users to understand
which company to choose and if the chosen company is the best or they should go for an
alternative firm.
Financial
The biggest financial issue which trading.com can face is the rest of not getting the payment
from the customers after they have provided the full service to them. However, in reality the risk
of non payment of charges weather customers is low because as it seems, the parity of the
organisation have been high so far. This means that the customers have been loyal with their
payments. In addition to the financial risks that the company can face, some other challenges can
also be faced by the organisation. In this context, researchers like Masini and Menichetti (2013),
highlights that poor employee management is also a big risk. That is why organisations like
trading.com should have adequate employees on board so that they can properly address the
demands of customers as well as in sure, safety, security as well as workplace conditions for the
employees. However, the factors which hinder the company from doing so is the lack of

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GOVERNANCE, ETHICS AND SUSTAINABILITY
understanding of the managers regarding the core business operations which is handled by the
Consultants. Nevertheless, the lack of Information sharing platform within the employees as well
as between the employees, regional managers as well as higher management is also another big
business issue that they should solve.
Risk management procedure of the company
For risk assessment, trading.com can consider the following model.
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)
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)
Threat Likelihood
Likelihood Clarification
Employee
management
risk of high
level
Any risk having high potential, can also have a significant impact on the
business

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GOVERNANCE, ETHICS AND SUSTAINABILITY
Strategic
risks are low
Any business encountering medium level reached might undergo positive or
negative outcome as well as also experience growth of business opportunities
Financial
risk as well
as customer
fraud risk
are also low
Business risks of low level generally do not account for large impact
Magnitude of the impact of risks
Pressure points out of growth factors
Impact created Analysis Scoring
Managers put high pressure
for exclusive performance by
the employees
Operation related Risk are
high because of the fact that
in the previous years, the
organisation has exhibited
dynamic growth in very small
span of time. However, this
situation can be challenging
because the company do not
have the competence in the
form of number of employees
(Pritchard and PMP 2014). In
fact, there is high pressure of

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performance on the
consultants of the company as
their performances are judged
on the basis of sales volume
they are able to create
High rate of expansion Although the rate of
expansion is high the risk
associated with the Limited
organisational capacity makes
the problem higher for the
company. This implies that
all the organisation has
gained steady growth in small
amount of time, still there are
factors like Limited
communication strength,
Limited understand pictures
because of which they leave
the employees alone to
handle tough Times will
hamper the sustainability in
the long run.
100
Inexperience of Executive From the case study, we

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GOVERNANCE, ETHICS AND SUSTAINABILITY
employees understand that the capacity
of and training. However, if
they stop employing
employees with little or no
organisational knowledge,
and instead appoint staffs
who have no experience, they
will be able to better manage
the clients or the operations
(Vershinina et al. 2016).
Pressure points because of cultural factors
Awards for undertaking risks
of entrepreneurship
It is evident that
entrepreneurship works at
initial stage after that when
trading.com accumulated a
big client base it became
difficult for them to manage
the business because of the
Limited capacity of their
managers. However, with
Limited strength the big
customer base that has been
50

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GOVERNANCE, ETHICS AND SUSTAINABILITY
accumulated by the company
can be considered to be a
reward.
Resistance from executive
members, a high risk
It needs mention that
managers as well as executive
members of the company
have other lower level staff
also who needs to
communicate with them at
times of need. However, the
managers at trading.com are
only concerned with the data
figures of sales achieved by
the Consultants. For a Start
up organisation, managers
should come up and solve
issues on the floor.
100
Level of internal competition
is high
The employees experience
high competition because
they have fixed sales target
which they need to achieve.
In this context McNeil, A.J.,
Frey and Embrechts (2015),
100

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GOVERNANCE, ETHICS AND SUSTAINABILITY
highlights that when
competition in the company
is high, the organisation
performs better and it
receives a big client base
also. However, there should
be internal support from the
immediate managers also,
which is missing in the case
of trading.com.
Pressure points because of information factors
Kind of risk Analysis Score
Complexities as well as
velocity of transaction
The transaction of the
business activities of the
company is complex because
of lack of communication and
increased pressure on the
employees to increase sales
volume. The velocity of the
business operations is high
considering that the client
base is bigger and the number
50

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of employees serving them is
much less.
Diagnostic performance gaps
are low
The gaps in Diagnostic
performance is low because
the overall performance of
the organisation is higher
compared to the normal
industrial standards
10
Risk of decentralization of
business decision making is
low
Business decision making
among a large group of
members should have a
central authority
(Sundararajan, Bhasi and
Pramod 2017). However,
decentralization works when
the employees are
comfortable with their
working atmosphere.
50

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Reference List
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.
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.
Pritchard, C.L. and PMP, P.R., 2014. Risk management: concepts and guidance. Auerbach
Publications.
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.
Vershinina, A.A., Goryainova, L.V., Zhdanova, O.A. and Maksimova, T.P., 2016. State of the
investment fund market of as an indicator of the country's socio-economic development. Journal
of Internet Banking and Commerce, 21(S3), p.1.

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