Risk Assessment Of Property Millionaires †MyAssignmenthelp.com

Question: Discuss about the Risk Assessment Of Property Millionaires. Answer: Introduction Success is the best phase for any organization, as it brings several new opportunities to grow and expand the reach of it. Growing revenues and increasing profit led the company to utilize the opportunity and hire new workforce, increase their production scale and look for opportunities for overall growth (Reason 2016). This phase seems better for any organization as everyone associated with it feels that his or her future is safe. However, such growth brings several negative aspects in the organization that can lead to serious threat and risks. It is very important for the managers of those organizations to stay alert and understand the way such risk can affect the business (Kaufman and Guerra-Lopez 2013). These risks are generally prevalent in companies that are generally younger and having higher growth rates and the risk associated with such companies can be external as well as internal. External risks are non-compliance with law, ethical codes and market competition whereas inte rnal risk factors are under-developed infrastructure to withstand increased productivity or pressure, service quality and efficient workforce (Sadgrove 2016). This assignment is going to discuss such a risky situation for a company property millionaire and will discuss different aspects of risk associated with it. Finally, a risk calculation will be done to develop this risk assessment report. The company background The company Property Millionaires is an investment mentoring and seminar company, which was developed by the real estate developer George Kirzner, three years ago. This company helps people to invest in properties and suggest safe and successful ways to become millionaire. The company believe on the philosophy that every individual have the ability to become successful with proper education, mindset and support and they provide the support to those individuals. Suddenly the company started growing and the need of expansion becomes higher. However, George marked this situation as risk for the organization. The reason behind this was lack of trained employees and infrastructure to handle such increased load. However, the regionals managers were not that serious regarding the situation, George made the staff serious, and alert as it was essential for the organization to deliver strong financial performance. Such situation led George to hire consultants with some company staff having lit tle to no experience in sales. Risk assessment of Property Millionaires Risk assessment is an important tool that is used to identify, assess and rate the risks faced by organizations while processing, financially growing or complying with thelaw or ethics of the business. It helps the organization by providing a complete structure that provides complete information about associated risks, its implications and means to mitigate such risk factors. Risk exposure calculator helps to understand the ability of the company to identify situations that can lead to risks for the companys strategy and performance (Harvard Business Review 1999). This calculator is divided into three sections denoting internal pressure. These are pressure due to excessive growth, pressure due to culture and pressure generated by financial management. As success hits the company, people associated with it starts making mistakes knowingly or unknowingly. Risk assessment calculator helps to understand the level of their mistakes and rates those actions on a scale of 5, where 5 denotes higher risk. Further, depending on the sections and sub-section ratings of risk assessment calculator, a total score is calculated in which score 9-20 is determined as safe zone whereas, score 35-45 is denoted as the Roles of these aspects with respect to Property Millionaires Company is mentioned below (Harvard Business Review 1999). Pressure point due to growth When a business starts growing beyond the expectations of its leaders or its employees, risk associated with pressure increases. This pressure generates as the market suddenly starts betting on the company and the leaders of the company set new goals and sales targets that creates a set of pressures for the organization and he employees. These are pressure to perform, pressure to increase or to cope up with the rate of expansion and pressure related to the lack of experiences of its employees (Winston and Cahill 2012). Pressure for performance In Property Millionaires, while facing the market push, the CEO George wanted each of the employee to take account of their work and deliver best possible financial performance. This led the employees to face a huge pressure as maximum of the employees were hired after the company started expanding and they did not had enough experience to deal with such pressure (Hall and Wagner 2012). Furthermore, the company hired a set of consultants who used to set difficult sales goals and targets after being approved by the senior management or the CEO. Therefore, according to the risk assessment calculator, this section had higher risk rating that is 5. Rate of expansion The property millionaire company was a mid-sized business that employed 100 employees having proper knowledge and capacity to work in pressure, before the sudden expansion started. The companys sales started growing and expansion occurred more than the capacity of the organization to hire or train new employees to deal with the growing pressure (Eliasson 2012). Therefore, the pressure of expansion was clearly visible on George, the CEO. He employed few consultants to train and hire employees and set sales targets for them. Hence, on the risk assessment calculator, the rate of expansion pressure scores 4 and it denotes that company was at risk related to the pressure of expansion. Inexperience of key employees After the unexpected success of the company lead by George, the company started facing pressure to perform more and establish itself in the market risk. The market also started believing in the company and therefore the rate of expansion becomes uncontrolled. In such situation, the owners were suggested to employ people having less or no experience of sales, as there were more demands than the tenured and experienced employee can withstand (Mascini and Bacharias 2012). Furthermore, the higher authorities such as senior managers and junior managers lacked effective communication that showed their inability to withstand excess growth pressure. Therefore, according to the risk assessment calculator, this aspect of Property Millionaire Company deserves 4, as the consultants and the CEO took their job seriously and tried their best to overcome the risks. Pressure point due to culture This pressure point is related to the cultural risk and the amount of risk a company takes while implementing innovation and creativity. This pressure is crucial as the company reputation and finance is at stake while combating this pressure (Baer 2012). There are several factors associated with the risk such as rewarding the entrepreneurial risk taker, executive resistance to bad news and the level of internal competition. Rewarding entrepreneurial risk takers (Di Zhang and Swanson 2013) In the Property Millionaire organization, the business was entirely based on new seminars on different properties and the senior management team and the CEO George used to prepare seminars. This senior management team of the organization was risk taking and while working in the team they were able to maintain autonomy. This was the only negative thing about them as it increases the frequency of failed seminars. Therefore, on the risk assessment calculator this aspect can be rated as 2, as they had the capability to perform and take risk. Executive resistance to bad news In the context of the given organization, the managers were not prepared for the sudden expansion and were into following the instructions from George. Further, the senior management team, who worked individually despite of being a team, were not serious enough about the failure of the new seminars . Therefore, they were resistant to bad news and failure did not hampered their mental stability and hence, on the risk assessment scale they are being given 2 points (Leveson 2015). Level of internal competition In the organization after facing an up rise in the market, the company hired consultants, who used to assign targets related to sales to the employees and the senior management approved these targets. The payment of these consultants were solely based on the targets or clients they used to brought for the organization. The regional manager used to rate these consultants depending on their performance and the consultants used to be rewarded with special treatment. Therefore, the competition between employees were at higher point as the competition was ruthless and harsh instead of healthy and progressive. Therefore on the risk assessment scale, the competition level related risk scores 5 (Bombardini and Trebbi 2012). Pressure point due to information management Within a company, the flow of information should be appropriate and managed by a trained and experienced authority so that the information can be utilized by the organization for growth and development. The risk factor associated with the information management are transaction complexity and velocity, gaps in diagnostic performances and the degree of decentralized decision-making (Haimes 2015). Transaction complexity and velocity As the company, Property Millionaires started growing beyond the expectations, the company stared facing issues related to transactional complexity. Primarily the company used to provide guidance to people for their property related investments on small level. However, after expansion and addition of newer set of consultants who used to provide seminars to those client to sell property, lead the organization to face problems related to transactions. Several clients were not happy with the seminars and rejected to invest in the property. Therefore, speed of growth and the transactional complexity hampers the business and therefore it is rates score 5 on the risk assessment calculator. Gaps in diagnostic performances It is evident from the given case study of the company that there were a gap of effective communication between the senior management and the regional managers, which created a lack of diagnosis of performances. The regional managers unable to view the consultants or other employees work records and were kept busy with unanticipated emergencies. Furthermore, they had minimum sense of corporate strategies (Shinkle 2012). Therefore, on the risk assessment calculator, these gaps are given the highest score, 5. Degree of decentralized decision-making Decision-making is the crucial part for any organizations success as proper and correct decisions taken in the favor of the company can lead to success (Ford and Richardson 2013). In the property millionaires company, it is evident that every employee worked according to the decision of their higher authority. The senior management used to prepare seminar, however they were unaware of the expertise of the consultants. On the other hand, the consultants used to bring clients just to earn incentives and appreciation at the moth end from the regional manager. Therefore, decision-making skill lacked in the authority as well as the employees and therefore on scale of risk assessment it is given 5 points. Therefore, after assessing all these risks associated with Property Millionaires Company, the total estimated risk score in risk calculator becomes 37. This score indicates that the company is at higher risk with respect to pressure related to growth, culture and information management. The score 37, denotes that the company is at danger zone and it should focus on its defense as well as risk management system to protect their organization from forthcoming disaster (Harvard Business Review 1999). The protection can be achieved by employing highly experienced people in the service or implementing a strict monitoring system to not to compromise with the quality service and further dealing in processes that the organization is famous for, other than innovations and experiments. Conclusion Risks are associated with success and therefore, it is important for the leaders of the organizations to be aware of the situations that need to be controlled within the organization to survive the risky situation. As the risks generated inside the organization, harms more than the external risks, interventions to fight the internal risks should be informed to every employee. in such situation, the risk assessment calculator helps to understand the factors that affects the business and depending on the scores given in that scale, the companies risk situation is determined. This assignment dealt with a case study of company Property Millionaires, which after sudden success faced many risks related to pressure, culture, performance and information management and these pressures are described properly in the assignment with respect to the company. Further, a total score of risk was obtained from the risk assessment scale and it was found that the company is at higher risk. 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