Trading.com

The success or the failure of an organization depends to a large extent on the manner in which it is being able to mitigate the adverse effects of the diverse risks that it is faces (Ward 2016). Furthermore, the managers or the leaders associated with an organization need to identify the root cause of the risks that they face in the initial stages of its emergence when it is possible for them to mitigate its adverse effects (Li 2014). In this regard, the concept of risk assessment becomes very significant which not only enables a particular organization to identify the risks that it faces but also to devise effective mitigation strategies for the same (Haimes 2015). The “Risk Exposure Calculator”, in the recent times, has emerged as one of the most important risk assessment tools which are being used by the various organizations for the identification of the risks that they face (Simons 1999). This report will discuss the risks that the company Trading.com is facing currently on the basis of the score of the company on Risk Exposure Calculator.

The company Trading.com provides offers its customers investment courses and other kinds of mentoring services. The mantra of the company under discussion here is the fact that any individual is capable of becoming a successful investor provided they have the right kind of mind set, support as well as education. It is pertinent to note that following this particular mind set the company offers investment facilities which it claims can help the customers to secure a savings and thereby retire at a much earlier age. Furthermore, in the recent times, following this particular mind set the concerned company has been able to gain a significant amount of success. However, at the same time, it needs to be mention that this growth is being seen in a skeptical manner by the diverse employees of the concerned organization. For example, the owner of the company Jospe Drake is optimistic about this growth as well as expansion of business whereas the others are pessimistic about the same.

Lebedeva et al. (2016) are of the viewpoint that the various risks faced by an organization if mitigated as well as utilized in an effective manner can lead to the overall development and also the growth of the concerned organization. This is important from perspective of the company under discussion here since the sudden growth as well as success and its related aspects that the concerned company is facing at the current clearly act as a risk for the company. The diverse kinds of risks that the company is facing currently can be broadly categorized under the following three sections-

• Risks points due to growth
• Risks points due to culture and
• Risks points due to information management

Trading.com and the risks faced by it

The central lacuna of the thought process of the majority of the companies of the modern times is to attain a higher level of financial and other kinds of growths (Sadgrove 2016). However, at the same time, it needs to be said that there is an element of risk associated with the process of growth since the companies often face the dilemma whether they should focus on the concept of quantity or quality for the attainment of process (Kozubíková et al. 2015). The major risks associated with the process of growth can be categorized under the following genres-

• Risk due to pressure for growth
• Risk due to pressure for expansion and
• Risk due to the inexperience of the employees

The company Trading.com is experiencing an unexpected growth currently because of an increase in the demand of the investment courses and other kinds of services offered by the company. The owner of the company, Drake, during the initial phases of the company used to provide aggressive targets to the sales persons. In addition to this, they did not have any fixed salary rather they would be provided commission on the basis of the number of courses sold by them. The use of this particular strategy no doubt contributed in a significant towards the unexpected growth attained by the company however at the same time it is seen that the employees are taking the help of unethical as well as unfair practices for the enhancement of the sale of the courses and the other services offered by them to the customers. This poses a significant amount of risk for the company and the net result of this particular aspect is that the company has got a score of 3 on this index on the risk exposure calculator (Appendix 1).

The unexpected high demand for the services that the company Trading.com is receiving at the current moment is acting as a challenge for the concerned company because of the limited nature of resources that they have at their disposal. Furthermore, although the company currently has around 100 employees yet they are not being able to manage the workflow in an effective manner and this has forced the company to recruit new candidates who are often inexperienced and do not have the desired expertise for the concerned job role. The net result of this particular fact is that the quality of the services offered by the company is declining and it can adversely affect the prospects of the company in the longer run (Kowalkowski et al. 2015). Thus, it can be said that the company faces a significant amount of risk because of expansion and has a score of 4 on the risk exposure calculator on this index (Appendix 1).

Risks points due to growth

Brettel, Chomik and Flatten (2015) are of the viewpoint that the quality of the services offered by a particular company is directly related to the expertise level and also the effectiveness with which they are being able to handle the customers. The company Trading.com faces a significant amount of risk on this score since it is seen that the majority of the new employees which is hiring currently do not possess the required skills to handle the customers or cater to their needs in an effective manner. This is likely to affect the quality of the services offered by the company in an adverse manner. As a matter of fact, most of the customers are complaining that they receive good treatment from the employees only upto the point of making the payment and once they have made the payment for the services they failed to get even a reply from them. This poses a significant amount of risk for the company since it is adversely affecting the brand image and also the satisfaction level as well as the loyalty of the customers. Thus, the company has got a score of 2 on risk exposure calculator on this particular aspect

Recent researches have suggested that the culture which is being followed within a particular company is directly correlated with the performance level of the employees (Luthans and Doh 2018). Furthermore, it also enhances the job satisfaction level of the employees and thereby reduces the rate of attrition of the company (Bromiley et al. 2015). However, at the same time, it can be said that the use of ineffective organizational culture within an organization can adversely affect the prospects of the concerned organization (Wu, Chen and Olson 2014). The risks that the company Trading.com faces on the basis of this particular aspect can be broadly categorized under these genres-

• Risks due to rewards for entrepreneurial risk taking
• Risks due to executive resistance to bad news
• Risks due to level of internal competition  

The company Trading.com faces a significant amount of risk on the basis of the factor of entrepreneurial risk taking. In this regard, it needs to be said that the entrepreneur Drake has created a highly competitive kind of culture within the company wherein the employees are judged solely on the basis of the number of customers that they are being able to bring within the fold of the company. This often encourages the employees to take the help of unethical and inauthentic measures for the purpose of enhancing the sale of the services offered by the company. In addition to this, the CEO of the company relies on the regional managers for the information regarding the company however most of the time it is seen that the regional managers fail to offer concrete information to him. This aspect poses a significant amount of threat for the company and the company has got a score of 3 on this index (Appendix 1).

Risk due to pressure for growth

The prospects of an organization depends to a large extent on the manner in which it only reacts to the bad news but at the same time is being able to mitigate the adverse effects of the same (Hillson and Murray-Webster 2017). In the particular context of Trading.com it can be said that the company has a very high level of resistance level to the bad news and often these bad news are not even conveyed to the higher authorities. For example, it is seen that the employees are required to give a demonstration of the services to the customers however the manner in which they should perform the demonstration has been stipulated by the company. Thus, the nature of these demonstrations is being conveyed to the regional managers only in case of success and not in case of failure. The company has got a score of 2 on the risk exposure calculator for this aspect (Appendix 1).

Trading.com has created the kind of culture within its workplace wherein the employees are being appreciated on the basis of their performance. This has given rise to a high amount of internal competition within the company and often it is seen that the employees in order to enhance their performance take the help of unfair means. This is not only affecting the culture as well as the prospects of the company but also the image of the company as well (Hopkin 2018). Thus, it can be said that the company faces a significant amount of risk on the basis of this fact and has a score of 3 on the risk exposure calculator (Appendix 1).

The risks that the company Trading.com is facing currently on the basis of this particular aspect can be broadly categorized under the following sections-

• transaction complexity and velocity
• gaps in diagnostic performance
• degree of decentralized decision making

The company under discussion here in order to attract customers offers them free seminars regarding the services offered by them. It is pertinent to note that the company has not stipulated any fixed course of conduct regarding these seminars and the employees often in order to meet the targets that has been provided to them try to follow the course of action which is likely to yield the best possible results. However, in the majority of the cases it is seen that these means adopted by the employees are not fair ones and is adversely affecting the reputation of the company. Thus, the company faces a significant amount of risk on the basis of this fact and has a score of 2 in this aspect (Appendix 1).

Risk due to pressure for expansion

The assessment of the performance of the employees should take into effective consideration not only their individual performances but also the contribution that they have made towards the enhancement of the performance of the others (Soomro, Shah and Ahmed 2016). However, in the company Trading.com the performance of the employees is judged solely on the basis of the number of sales they are being able to make in a month and this has given rise to an aggressive culture within the organization. The risk score of the company Trading.com on this aspect is 3 (Appendix 1).

The company Trading.com is a decentralized one and it is seen that the employees have the freedom to deal with the clients and make the sale. The net result of this particular aspect is the fact that the employees do not follow any specific rules or regulations for the performance of their job roles and their sole focus is on the enhancement of the number of sales made by them regardless of the means that they adopt. The score of Trading.com on this particular index is 2 (Appendix 1).

The summing up of all the individual risk scores indicates that the company has got a risk assessment score of 25 (Appendix 1). This means that the company belongs to the caution zone. Thus, the company needs to devise diverse kinds of strategies so that they are being able to mitigate the adverse effects of the risks that they are facing at the current moment.

Conclusion 

 To conclude, the various kinds of risks that a particular organization faces are an inherent part of their business operations. Furthermore, the prospects of an organization depend to a great extent on the effectiveness as well as efficiency with which they are being able to mitigate the adverse effects of the risks that they face. This is important from the perspective of the organization since it is seen that many times a particular organization stands to gain significant profits because of the effective mitigation of the risks that they face. In addition to these, the assessment of the risks that an organization faces becomes important since it not only provides an idea about the risks that they face but also helps them to devise effective mitigation strategies as well.

References 

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