MBA402 - Risk Assessment Report on Trading.com Company

This report presents a comprehensive risk assessment of Trading.com, a fictional company, based on the provided case study and the HBR Risk Exposure Calculator. The analysis identifies and evaluates pressure points across three key areas: growth, culture, and information management. The assessment of growth considers pressure for performance, the rate of expansion, and the inexperience of key employees. The cultural aspects examined include rewards for entrepreneurial risk-taking, executive resistance to bad news, and the level of internal competition. Finally, the report assesses information management, focusing on transaction complexity and velocity, gaps in diagnostic performance, and the degree of decentralized decision-making. Each risk is analyzed, and a risk exposure score is assigned based on the case study information and the framework provided. The report uses references from academic journals and textbooks to support its findings and conclusions, providing a detailed understanding of the company's risk profile and potential areas for improvement. The report aims to assist the company in managing risk effectively and improving its overall performance.

Running Head: GOVERNANCE, ETHICS AND SUSTAINABILITY
GOVERNANCE, ETHICS AND SUSTAINABILITY
Name of the Student:
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Table of Content

1GOVERNANCE, ETHICS AND SUSTAINABILITY
s
Introduction......................................................................................................................................2
A. Pressure points due to growth..................................................................................................2
Pressure for performance.............................................................................................................2
Rate of expansion........................................................................................................................3
Inexperience of the key employees..............................................................................................4
B. Pressure points due to culture...................................................................................................4
Rewards for entrepreneurial risk taking......................................................................................4
Executive resistance to bad news................................................................................................5
Level of internal competition.......................................................................................................6
C. Pressure points due to information management.....................................................................6
Transaction complexity and velocity...........................................................................................6
Gaps in diagnostic performance..................................................................................................7
Degree in decentralised decision making....................................................................................8
Reference.........................................................................................................................................9
Appendix........................................................................................................................................11

2GOVERNANCE, ETHICS AND SUSTAINABILITY
Introduction
Organisational risk is considered to be one of the great challenges that any business
organisation can face in course of doing business in a competitive market (Barrett 2018). There
are different types of risks that the companies often face in terms of organisational culture,
business orientation and the customer services. In this context, it is important for the business
organisations to identify the risks in brief span of time and take adequate measures in order to
resolve it. Therefore, the case study organisation Trading.com is also urged for an effort to
analyse the risks and set a risk preference on the basis of the magnanimity of its value. However,
it is impossible to identify the risks based on its value. Therefore, a risk exposure calculator has
been taken n order to manage the risks on its value. The report aims to identify the risks only and
assembled the risks on the basis of its intensity. In fact, the risks are categorised in three parts
such as growth, culture and information management. Those key areas encompass a detailed
understanding of the entire process.
A. Pressure points due to growth
Pressure for performance
The intense market demand in Australia pushed Trading.com to impose more pressure
on the employees in order to bring more efficacies into the organisational practice. From the
research of Martinez et al. (2017) it can be stated that it is important for a medium scale
organisation to establish business on the basis of extracting maximum ability of the employees.
For Trading.com also the organisation started focusing on aggressive sales and it requires using
maximum efforts of the employees. As a matter of fact, the risk factor for Trading.com is that

3GOVERNANCE, ETHICS AND SUSTAINABILITY
the decision making process is top down and the senior management never listens to the
subordinates. As a result of that the employees failed to ventilate their grievances through
effective channels. Choi (2019) articulated that it is essential for the business organisation to
foster better practice by incorporating the voice of the employees. However, for Trading.com
the senior management never evaluate the efficiency and skills of the employees. Without having
knowledge in the ground reality it is not possible for the CEO Jospe to implement a decision.
Thus the employees feel pressure to work in Trading.com. Based on this understanding, the
calculator measures it risk 4 due to havoc pressure on the employees.
Rate of expansion
Trading.com is focusing on high rate of expansion into the sales growth and earns high
profitability. However, it is not possible for the business organisation to implement enough
pressure on the prospect of making an effective growth due to lack of knowledge in the ability
and skill of the employees. Almatrooshi, Singh and Farouk (2015) advocated that the growth and
progress of an organisation is highly depended on the practice of the employee ability and
workforce strength. In case of Trading.com though the company opens four branches into the
business districts of Australian, the number of employees are not big enough to face bulk of
pressures. Currently the company operates more the 100 employees in all the branches.
However, the increase in the market pushed the organisation to appoint more people and Jospe
was willing to initiate a recruitment drive. The urgency of the employment led to negotiate with
the current standard of employees. It became a problem for the quality and standard issue of
Trading.com. In this context, the article of Shah, Irani and Sharif (2017) mentioned that the
quality of workforce was a driving factor that paved the way for success. Therefore, it would not

4GOVERNANCE, ETHICS AND SUSTAINABILITY
be an effective measure for the senior management to start an expansion. The risk exposure
calculator marks this risk 4.
Inexperience of the key employees
The risk exposure calculator put a value for this risk to 2 for Trading.com that connotes
the company has less risk in inexperience key employees. As Hussain et al. (2016) stated that the
employees are the key aspect for the organisations and the companies should take a great deal of
analysis on the ability of the employees. Therefore, it is also relevant for Trading.com to reject
the employment of inexperience people in key positions. Nevertheless, the organisation initiated
a recruitment drive and considers curtailing the criteria to some extent in order to cope with the
growing needs into the market. As a result of that the company started recruiting inexperience
person into the organisation. Nevertheless, the senior management knew the fact that
inexperience employees in management can jeopardize the entire business of the organisation.
Therefore, all the inexperience employees were recruited as consultant not for any key position.
B. Pressure points due to culture
Rewards for entrepreneurial risk taking
Ghosh et al. (2016) argued that reward and recognition are the key concept that the
organisations are followed in order to motivate the employees effectively. However, employee
engagement and motivation is always being an effective strategy for the corporate farms in order
to expand its business extensively. As a result of that rewards in terms of financial benefits and
incentives will be the best measure to follow. In case of Trading.com the company walked into
the same line by procuring a better incentive structure for the employees that will help them to
make more profitability for the farm. The consultants are played the most crucial part in order to

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make the farm successful. Therefore, the senior management decides to motivate the employees
by means of providing incentives and a better salary structure. Jospe decided to offer a salary
package of $30,000 per annum with a percentage as bonus for selling each 10,000 sales course.
The inceptions are seemed to be an additional benefit for the employees or the consultants for
their efforts to taking extra care and risks for the development of the organisation. this fair
treatment brought a better relationship with the management and the employees and the
consultants are felt motivated to give their best. Therefore, the calculator senses it less
threatening and scores 1.
Executive resistance to bad news
For Trading.com the senior management is responsible to deal with the all the decision
making. The regional managers and the employees are not entitled to ventilate their
understanding and vision to the senior management. This Top down decision making is a grave
problem for Trading.com to resolve crisis situation. According to Kulkarni et al. (2015) the
incorporation of the all the responsible stakeholders in the decision making process is highly
important for the organisation in order to bring more efficacy and better ideas to mitigate the
organisational issues. As a result of that for Trading.com the lack of decision making rights of
the regional management created lack of communication among the higher authority and the
regional level managers. Moreover, it can be argued that the decision making practice between
the management and the consultants was also restricted as the regional managers never got any
feedback regarding any decisions from the employees. Henceforth, in case of dire situation the
regional managers were not able to take decisions even they have better idea about the market.
The inefficient communication between the management and the employees can lead to a fatal

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impact on the organisation (Bearman et al. 2018). Therefore, the risk exposure calculator marks
it 4.
Level of internal competition
From the research overview of Longe (2015) it can be stated that competition within the
workplace is a most important part for the companies in order to get more productivity.
However, a positive and healthy competition is expected and uncontrolled competition can bring
damage to the workforce deeply. In case of Trading.com the organisation is also resembled with
organisational competition where the employees were encouraged to participate into a
competitive organisational practice. The senior management sets incentives on each selling
which is highly effective for the employees to get motivated. As a matter of fact, the company
also provides special bonuses in terms of expensive gifts and luxury holidays. Therefore, it can
be stated that the organisation can generate effective means of organisational development with
the practice of better employee motivation through special bonus. Form the research of Raziq
and Maulabakhsh (2015) it can be state that reward and recognition are the best part of employee
engagement and motivation and the employees are always feel a part of the organisation as the
organisation takes care of their interests. Therefore, lesser risk can be identified for Trading.com
in international competition where the organisation only follows a healthy and strategic
competition. Therefore, the calculator sets the value of 2.
C. Pressure points due to information management
Transaction complexity and velocity
Customer satisfaction is considered to be one of core concepts that the organisations are
maintained in order to bring more effectiveness in the relationship with the consumers. For

7GOVERNANCE, ETHICS AND SUSTAINABILITY
Trading.com the customer relationship management is not sound enough to retain its loyal
customers. Siakas, K. and Siakas (2015) opined that the transaction process is an initial step for
the organisation to set better organisational practices. Therefore, keeping a check on the
transaction system is pertinent for the organisational framework. In association with this, the
velocity of the transaction is also a subject of further investigation. Trading.com has lack of
transparency and clarity in its transaction system and the organisation is also reluctant to change
the structure due to extensive focus on the sales growth only. The management did not care to
record the customer retention practice that can be a problem for future business orientation. As a
result of such trend the consultants were also very casual to check the importance of the
customers and record their grievances. One of the major allegation complained by the customers
that the consultants were never picked up their phones after selling a course to the customers.
Therefore, the customers feel betrayed. Therefore, the risk exposure calculator puts a value of 4
for the transaction complexity and velocity of Trading.com.
Gaps in diagnostic performance
Diagnosis of the customer satisfaction related gaps and flaws are also essential to identify
for the business organisations in order to bring efficacy into the relationship with the customers.
In case of Trading.com the organisation only puts emphasis on its sales growth. Retention of the
loyal customers is not mentioned in the objectives of the organisation. Henceforth, the
employees or the consultants were also supposed to get encouraged by this malpractice and they
deliberately use this trend in their operations as well. From the research of Narayanan and
Adams (2017) it can be derived that disruptive nature of the diagnostic performance is fatal for
the business organisations and the company can lose a great number of its loyal customers. The
Trading.com management must address this issue and prepare better framework for making a

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good relation with the customer. It will also help the organisation to foster better organisational
practice to ensure its future business orientation. Therefore, the calculator scores it 3.
Degree in decentralised decision making
Decision making practice in Trading.com is highly one linear. It means a top down
decision making practice is prevalent in the company that halted effective communication
between the senior management and the regional managers for identifying and resolving the
issues. From the perspective of Amankwah-Amoah (2015) decision making practice in business
is dynamic and it should be included all the stakeholders to get their version of the problem.
However, for Trading.com the senior management did not feel the importance of incorporating
the regional managers into the decision making practice. As a result of that communication gap
is evident for Trading.com Therefore, the calculator scores 4 to this risk.
Conclusion
Based on the above understanding, it can be stated that Trading.com is facing a series of
risks in its business activities that have to be resolved in a brief span of time. The risk calculator
helps to underline the risks and scores the values so that the management can take action on the
basis of the intensity of the problem. Synchronising the risks in low level and high level will help
Trading.com to mitigate the problems in time. Therefore, it can be concluded that the risk report
and the calculator is highly efficient to procure in-depth analysis on the risk factors.

9GOVERNANCE, ETHICS AND SUSTAINABILITY
Reference
Almatrooshi, B., Singh, S.K. and Farouk, S., 2016. Determinants of organizational performance:
a proposed framework. International Journal of Productivity and Performance
Management, 65(6), pp.844-859.
Amankwah-Amoah, J., 2015. A unified framework for incorporating decision making into
explanations of business failure. Industrial Management & Data Systems, 115(7), pp.1341-1357.
Barrett, R., 2018. Influence of Self-Control, Risk-Taking, Manipulation and Integrity on
Organisational Citizenship Behaviour.
Bearman, C., Brooks, B., Owen, C., Curnin, S. and Stuart, H., 2018. Decision Making, Team
Monitoring & Organisational Learning In Emergency Management.
Choi, J.H., 2019. What one thinks determines one's actions: the importance of employees’
perception in implementing HR systems. Asia Pacific Journal of Human Resources, 57(1),
pp.85-102.
Ghosh, P., Rai, A., Chauhan, R., Baranwal, G. and Srivastava, D., 2016. Rewards and
recognition to engage private bank employees: Exploring the “obligation
dimension”. Management Research Review, 39(12), pp.1738-1751.
Hussain, I.A., Ishak, N.A., Daud, N. and Yunus, N., 2016. Impact of organizational image in
determining the level of engagement among commercial banks’ employees. In Proceedings of
the 1st AAGBS International Conference on Business Management 2014 (AiCoBM 2014) (pp.
117-126). Springer, Singapore.

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Kulkarni, V., Barat, S., Clark, T. and Barn, B., 2015, September. Toward overcoming accidental
complexity in organisational decision-making. In 2015 ACM/IEEE 18th International
Conference on Model Driven Engineering Languages and Systems (MODELS) (pp. 368-377).
IEEE.
Longe, O., 2015. Impact of workplace conflict management on organizational performance: A
case of Nigerian manufacturing firm. Journal of Management and Strategy, 6(2), pp.83-92.
Martinez, L.R., Sawyer, K.B., Thoroughgood, C.N., Ruggs, E.N. and Smith, N.A., 2017. The
importance of being “me”: The relation between authentic identity expression and transgender
employees’ work-related attitudes and experiences. Journal of Applied Psychology, 102(2),
p.215.
Narayanan, V. and Adams, C.A., 2017. Transformative change towards sustainability: the
interaction between organisational discourses and organisational practices. Accounting and
Business Research, 47(3), pp.344-368.
Raziq, A. and Maulabakhsh, R., 2015. Impact of working environment on job
satisfaction. Procedia Economics and Finance, 23, pp.717-725.
Shah, N., Irani, Z. and Sharif, A.M., 2017. Big data in an HR context: Exploring organizational
change readiness, employee attitudes and behaviors. Journal of Business Research, 70, pp.366-
378.
Siakas, K. and Siakas, D., 2015. Cultural and Organisational Diversity Evaluation (CODE) A
tool for improving global transactions. Strategic Outsourcing: An International Journal, 8(2/3),
pp.206-228.

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Appendix
Figure 1: Risk exposure calculator
(Created by the author)