Risky Situations For Property Millionaires †MyAssignmenthelp.com

Question: Discuss about the Risky Situations For Property Millionaires. Answer: Introduction The best phase for any organization is related to its success, as it brings several opportunities for the organization and its employees. The employees feel that their future is safe, as the company profile expands and they start receiving revised remunerations. On the other hand, the company also started to expand its workforce and implement newer systems to maintain the new market reputation (Sadgrove 2016). However, such success generally brings several threats or risks related to it, which has the capability to shatter the companys structure and the market reputation. The new and young companies are unable to identify these risky situations and therefore the rate of such organization being affected to risks is more than the experienced organizations. The risk generally involved external and internal factors within which, internal risks hampers the organization adversely (Reason 2016). This assignment is going to discuss such risky situations for an investment seminar company Prop erty Millionaires, and different aspects of risk associated with it will be discussed. Further, the total calculated risk would be provided in the appendix section of the assignment with the help of risk assessment calculator. The case study A successful real estate developer George Kirzner developed the company Property Millionaire three years ago. The company used to provide detailed seminar and mentoring to people who wanted to invest in real estates. The company is a mid-scale sales firm having offices in Sydney, Melbourne, Brisbane and Adelaide. The risk for company started after the company becomes successful one year ago as the need of expansion marked the urge to employ more employees. The primary reason for this was lack of trained employee to handle the excessive pressure however, George influenced his employees to perform in this crucial and risky situation and deliver strong financial performance. Risk assessment of the company While complying with the states law and ethics, or performing financially, there is a number of risks that an organization faces. These risks are being identified, calculated and rated using risk assessment process. The tool for such process is known as risk assessment tool, using which any company can understand its ability to identify the risky situation and find ways to mitigate those risks (Harvard Business Review 1999). Risk assessment tool assesses internal pressure using three subsections that are pressure due to growth, culture and improper financial management. This calculator rates the risk on the scale of 5 where 5 denotes highly risky. Further, based on the cumulative score of the subsections, the tool provides a total point to the risks. The total score of 35 to 45 in the risk assessment tool determines that the company is at highly risky situation (Harvard Business Review 1999). Pressure point due to growth Pressure for performance In the Property Millionaire organization, the employees were at high pressure. CEO of the company pushed every employee to deliver strong financial performance, but the workforce was not capable to withstand such pressure, therefore they recruited employees having little to no experience in sales. On the other hand, the consultants used to set targets that were not achievable by those new employees (Hall and Wagner 2012). Therefore, in the risk assessment calculator, the pressure to perform factor deserves 5 point for the given situation of the company. Rate of expansion The Property Millionaire was a mid-sized organization, having its branches in the four main cities in Australia, until the sudden success it achieves in the market that increases its market reputation. Therefore, the pressure of expansion came along the success and the company was forced to employ and train new candidates having less or no experience in sales firm. Furthermore, the expansion process brings work related pressure as the consultants set up targets for the employees that were not achievable. Therefore, it is quite evident that the CEO of the company had utmost pressure to expand his organization, and therefore on risk assessment calculator, this risk deserves 5 point. Inexperience of key employees As the organization faced an unexpected growth in the market, the authorities had immense pressure to expand their market and therefore, they started employing candidates having no experience in this crucial field. This led them face a difficult situation, as they had to provide prior training to those key employees as inexperience of these key employees could have become the reason for customer dissatisfaction (Winston and Cahill 2012). Therefore, this experience lack created situation for communication gap between seniormanagement and the regional manager and therefore they were unable to survive pressure of expansion and perform. Hence, in the risk assessment calculator the company deserves 5 points for level of inexperience. Pressure point due to culture Rewarding entrepreneurial risk takers The higher authority that is thesenior management of the organization used to provide rewards and incentives to those consultants who were able to prepare more and more seminars regarding their real estate properties. They were able to perform depending upon the market pressure and therefore the system for entrepreneurial reward was working properly in the Property Millionaire organization (Di Zhang and Swanson 2013). Hence, in the risk assessment calculator this risk factor deserves 2 points. Executive resistance to bad news In the Property Millionaire organization, the senior management team used to prepare seminars on the real estate projects, which used to be presented to clients for further investment. However, in the competitive environment, the quality of the seminar used to be low and clients used to reject those projects. Despite of this, the senior management used to behave separately, despite being a team. This negative factor increased the frequency of failed seminars and therefore, resistance to bad news should be rated point 5 in the risk assessment calculator. Level of internal competition As the market of the company Property Millionaires was growing, the company hired consultants, who used to set targets for employees that needed extensive level of competition. The remuneration of these consultants were depending on the target achieved and the regional manager rated those employees depending on their target achieved and treated them with special treatment (Ford and Richardson 2013). Hence, the level of competition was very high in the organization and the level of it was ruthless. This is the reason it deserves point 4 in the risk assessment calculator. Pressure point due to informal management Transaction complexity and velocity As the company started growing extensively, the issue related to complex transactions and failure of it due to excess velocity of growth increases. The company suddenly started providing consultation to huge amount of clients, who saw the seminars that were prepared in pressure situation (Scott and Davis 2015). Therefore, they were not interested in the project and denied to pay or invest. This leads to transactional complexity and on the risk assessment tool it was rated 4. Gap in diagnostic performances In the given company situation, the gap exists in the senior management of the company and the regional managers. These authorities were not able to view the employees details and their performance and hence, were not able to take necessary steps to improve their shortcomings. Therefore, on the risk assessment calculator, this risk should be given 4 points. Degree of decentralized decision-making Decision-making is one of the crucial aspect of any organization. The employees did not had their own decision and had to work based on their higher authorities decision. Furthermore, the senior management, regional managers all were unaware of the employee performances and judged them based on the number of clients they faced (Ford and Richardson 2013). The senior management were not able to attract clients after their expansion, as they were not focused to the aspects in which they were experts. Therefore, this aspect should be marked as score 5 in the risk assessment calculator. Finally, after assessing all the risks in the risk assessment calculator that is the pressure to growth, culture and informal management, the cumulative score for the Property Millionaires Company becomes 39. This score falls in the range of highly risk zone in the risk assessment tool and according to it, the company should strengthen its risk management aspects and defense strategies to withstand the forthcoming risks. This can be achieved by implementing risk identification tools, and employing experienced individual in the high authority positions (Harvard Business Review 1999). The risk assessment calculator reading is attached in the appendix section of the assignment. Conclusion Success and risk goes hand in hand for any successful organization. Laid back attitude of employees, inexperience to detect risk and inability to withstand the excessive pressure coming with success can push any organization in highly risky situation. This assignment discussed about a company named Property Millionaires and discussed the situation of risk that came along sudden success. The risk faced by the company was related to culture, pressure of performance and informal management of company resources. These risks were calculated for the organization using risk assessment calculator and scores were allotted to its three sections and subsections on the scale of 5. Further, a cumulative result was obtained and according to the range of it, the risk for the company was calculated. References Di Zhang, D. and Swanson, L.A., 2013. Social entrepreneurship in nonprofit organizations: An empirical investigation of the synergy between social and business objectives. Journal of Nonprofit Public Sector Marketing, 25(1), pp.105-125. Ford, R.C. and Richardson, W.D., 2013. Ethical decision making: A review of the empirical literature. In Citation classics from the Journal of Business Ethics (pp. 19-44). Springer, Dordrecht. Hall, J. and Wagner, M., 2012. Integrating sustainability into firms' processes: performance effects and the moderating role of business models and innovation. Business Strategy and the Environment, 21(3), pp.183-196. Harvard Business Review 1999.How Risky Is Your Company?. [online] Harvard Business Review. Available at: https://hbr.org/1999/05/how-risky-is-your-company [Accessed 3 Feb, 2018]. Reason, J., 2016. Managing the risks of organizational accidents, 1st Edn, pp. 123-145, Routledge.https://books.google.co.in/books?hl=enlr=id=UVCFCwAAQBAJoi=fndpg=PP1dq=why+sucess+is+always+associated+with+rsks+for+organizationsots=3aYbRXyzKnsig=DQ3UmJ7XZbwjyTSVDDvVBnxQu6E#v=onepageq=why%20sucess%20is%20always%20associated%20with%20rsks%20for%20organizationsf=false Sadgrove, K., 2016. The complete guide to business risk management, 3rd Edn, pp. 245-267, Routledge. https://books.google.co.in/books?hl=enlr=id=jfiqCwAAQBAJoi=fndpg=PP1dq=what+are+the+risk+factors+for+a+grwig+companyots=HWFSAcFaKesig=gMkZn6QzYxAoCrsFfODaeGeRRf8#v=onepageqf=false Scott, W.R. and Davis, G.F., 2015.Organizations and organizing: Rational, natural and open systems perspectives, 1st Edn, pp. 123-156, Routledge. https://books.google.co.in/books?hl=enlr=id=aNRRCgAAQBAJoi=fndpg=PP1dq=pressure+point+due+to+informal+management+in+organizationots=nHAf0_yU-xsig=mWIoXZeLjIXl_vjxHNL5jI-pV0g#v=onepageqf=false Winston, W. and Cahill, D.J., 2012. Internal marketing: Your company's next stage of growth, 1st Edn, pp. 245-289, Routledge.https://books.google.co.in/books?hl=enlr=id=TcRwWkJN0JECoi=fndpg=PP2dq=pressure+faced+by+a+company+due+to+growthots=WHVCun-7U6sig=ZLiAFXplpVfrdU62VIzJ1pZQ9rg#v=onepageq=pressure%20faced%20by%20a%20company%20due%20to%20growthf=false