MBA402 Governance, Ethics, and Sustainability Assignment - Kaplan Business School, Australia

Assessment Title: Risk Assessment

Description - You are required to read the journal article and case study.

Journal Article - How Risky is Your Company? HBR. May-June 1999.

Case Study - Trading.com

Task - Prepare a risk assessment report on Trading.com using the Risk Exposure Calculator.

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Answer - GOVERNANCE ETHICS AND SUSTAINABILITY

Executive summary

The report sheds light on the risk of assessing the report. The main purpose of risk assessment is to identify the risk factors that might be harmful to each and every operation of the company. On the basis of the criteria of risk assessment, the following study reports a pressure point that has been generated due to growth. Along with that, it also includes the critical factors regarding the inexperience of key employees of Trading.com. Furthermore, the report also an emphasis on Risk Matrix that has been developed by calculating the risk scores through risk exposure calculator. Moreover, in order to bring effectiveness, the report also highlights recommendation based on certain factors such as; reward recognition, digital technology and training to employees.

Introduction

In these present days of globalisation, it is important for all the organisations to expand business by mitigating the risks which can affect the development of the business. On the other hand, it is important for the authority of the organisation to identify the risks which can negatively impact on the development of the business. In relation to the process of analysing risks, it is important to list the risk factors related to the organisation based on the priority. This report has assessed the importance of the risk related to trading.com. On the other hand, along with the help of risk exposure calculator, this report has scored the risks according to the priority.

A. Pressure points due to growth

Pressure for performance

This organisation has faced difficulties related to lack of motivation to the employees, which can help to affect the development of the business. Excessive rate of performance pressure can demotivate the employees. As per the views of Formentini and Taticchi(2016, p.45), it is important to manage or organize work plan among the employees depending on the factors related to their personal interest. On the other hand, in relation to the case study of trading.com, it has been observed that it has faced great problems to hold the staffs to deliver strong financial performance. This organisation has faced problems related to sales as it has engaged people who have no previous experience. Though trading.com can support the employment of the people by providing them facilities, it has reduced standards of employment by the business consultants.

On the other hand, the sales performance of this organisation has been decreased by the aspects of pressure in performance. As per the views of Kolk (2016, p.28), the organization can motivate the employees by supporting training programs. Moreover, the authority of the organisation can motivate them by increasing skills which can support the pressure of performance. In the case of trading.com, it has been observed that the process of mitigating risks related to performance pressure has to affect client satisfaction.

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Rate of expansion

In relation to the increased rate of business expansion, a business organisation may face risks regarding the shortage of cash. On the other hand, trading.com has faced issues regarding compromised quality. Based on the views of Roos(2017, p.120), increased rate of production can lead to decline quality of business. These aspects related to the business of trading.com can lead to loss of sales and customers. Lack of focus on the controlling system of the business can be considered as an issue related to business expansion. It is important for the authority of the business to divide work pressures between different locations. Apart from these, based on the views of Wheelen(2017, p.50), increased rate of employee turnover is responsible for dropping morale. Thus in the case of trading.com, the productivity of the organisation has been decreased.

The inexperience of key employees

Experience and skills of the employees can be considered as the backbone of the success of an organisation. Lack of experience of an employee can impact negatively on the business process of an organisation. According to Rezaee(2016, p.60), though trading.com has focused on consultants and a huge number of employees to develop business purposes, it has hired the people who have no previous experience. Apart from these factors, trading.com has faced problems due to the lack of training to the employees. In relation to using digital technologies and advanced management system, the authority of an organisation can hire experienced employees. Experienced employees can support effective, quality customer services, which can support the value of the organisation.

B. Pressure points due to culture

Rewards for entrepreneurial risk-taking

Providing rewards in relation to support entrepreneurial spirit can cause issues which can influence the behaviour of the employees. Based on the views of Davies (2016, p.23), it is important for the organisation to manage the behaviour of the employees to motivate them in enhancing the productivity of the business. Though risk-taking is synonymous with entrepreneurship, rewards for this can be considered as an issue which can generate a financial loss for the organisation. On the other hand, in relation to the context of Trading.com, it has been observed that rewards to the entrepreneur for the purpose of risk-taking can influence on the management of cash flow. According to Bosselmann(2016, p.38), providing rewards to the entrepreneurs can influence business venturers by influencing rate of capital.

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Executive resistance to bad news

In relation to the business context of Trading.com, it has been observed that the context of this business has faced difficulties due to the controversies regarding this. As per the views of Davies (2016, p.27), it is important for the management team of the organisation to focus on maintaining a culture of the organisation or the workplace to resist bad news or the controversies. The controversy of the bad news regarding the business of the organisation not only an impact on the performance of the employees but also on the financial development of the company.

Level of internal competition

Increased rate of internalcompletion within the organisation can affect the quality of performance as well as productivity of the organisation. On the other hand, Tyrading.com has been affected by the aspects of unhealthy competition within the organisation. The authority of the organisation has failedto motivate the employees by providing equal facilities to them. The company faces certain risks which must be stressed by the company officials. The company faces a huge amount of internal conflict between its employees as there is a tremendous amount of employee rivalry in the company (Teberga, 2018, p.36). Lack of healthy relationship affects the company workplace atmosphere; this directly affects the company Inestablishing a positive atmosphere in the company. Along with that, the company also faces another risk, which is employee rivalry; this is also a significant cause of underdevelopment of the company. The company significantly has to manage these two risks for the developing sustainability in business process and boost the company's financial condition (Kremeland Yazdanfar, 2015, p.75).

C. Pressure points due to information management

Transaction complexity and velocity

In relation to the aspects related to transactions, the authority of the business organisation may face financial loss. Based on the views of Crane and Matten (2016, p.25), it is important for the authority to track the record of transactions of previous months which can help to analyse profit percentage of the organisation after one financial year. On the other hand, according to Kohler (2016, p.39), it is important to introduce digital method or online transaction system which can solve the issues related to time delay and more expense. Complexity in relation to the process of the transaction can de-motivate the employees, which can negatively impact on the success of the business. Complexity in relation to the transaction may affect the relationship with the customers. On the other hand, it has been analysed that depending on this risk factor, Trading.com has affected motivational approaches to the employees.

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Gaps in diagnostic performance

Trading.com has faced issues or risks with expanding the business purposes as it has faced difficulties regarding the gap in performance of the employees. As per the views of Faccioet al. (2016, p.75), it is important for the organisation to support the skill and ability of the employees by providing them support related to effective quality training. This risk factor can impact negatively on the performance of the entire work process of the organisation. On the other hand, in relation to the case of Trading.com, lack of focus in hiring experienced staffs and lack of focus to training has affected this business.

Degree of decentralised decision making

Providing freedom to make the decision to the employees can harm the quality of decision making sometimes. According to Kremel and Yazdanfar(2015, p.184), it is important for the hierarchy of an organisation to support the decision-making process. Decentralised decision-making system in relation to Trading.com has affected the effectiveness of decision making, which can impact negatively on the financial profitability of the organisation. In relation to the business context of Trading.com, it has been analysed that the decentralised process of decision making can cause chaos in the process of decision making.

Calculating importance of risks with a risk exposure calculator

Assessing the importance of risks as per the severity

Recommendations

In relation to the context of Trading.com, it can be recommended that the organisation can focus on implementing creative as well as innovative strategies to fight against existing problems of this company. The following recommendations can help the authority of Trading.com to retain sustainability of the organisation.

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Recommendation 1: It is important for the authority of Trading.com to hire experienced staffs and to appoint professional experts to train the existing staffs.

Table 3: SMART Table for recommendation 1

Recommendation 2: The authority of Trading.com needs to introduce effective digital technologies in the work process, which can low work pressure of the employees.

Table 4: SMART Table for recommendation 2

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Recommendation 3: Trading.com can introduce reward recognition system in order to motivate the employees to insist them in avoiding internal competition

Table 5: SMART Table for recommendation 3

Conclusion

This report has analysed priorities of the risks associated with Trading.com according to their severity. In relation to the context of this organisation, this report has analysed the importance of the experience of the employees, which can support the effective quality performance of the employees. On the other hand, this organisation has focused on the importance of business expansion and the risks related to it. This report has presented a risk assessment report depending on the score of the risks by the help of risk exploring calculator. The process of prioritising risks can be able to help the organization to identify mitigation strategies to overcome these. Thus it can be concluded that through analysing the severity of the risks associated with the organisation, the authority can make mitigation strategies to resolve these.

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