MBA402:Governance Ethics And Sustainability

The organization Property Millionaires is an organization which offers real-estate investment advice and services to the ordinary people along with the various educational seminars that the organization offers to the customers so as to educate them regarding the real-estate business. The primary philosophy which is being used by the organization is the fact that “anybody can become a property millionaire if they have the right mind set, education, and support”. It is pertinent to note that in the recent times the organization is experiencing a substantial amount of growth because of the increase in the demand of the services offered by the organization among the customers. However, there is a mixed reaction among the employees of the organization regarding this recent growth in the business of the organization. For example, George, the owner of the company is excited about this growth whereas the other employees of the company are not. This is a Risk Assessment Report of the organisation Property Millionaires and the risk faced by the organisation will be assessed on the basis of Risk Exposure Calculator.  

Simons in his article “How Risky Is Your Company?” (1999) highlights the different kinds of risks that the contemporary business enterprises commonly face on the basis of their business operations and also the strategies that use for the expansion of this business (Simons 1999). More importantly, for the effective calculation of the risk faced by the different business enterprises he proposes the tool of “Risk Exposure Calculator” that indicates the zone to which an enterprise belongs like safety, caution or danger zone (Simons 1999). This is important since the enterprises on the basis of the results of this assessment can formulate the kind of strategies which are likely to help them to mitigate the adverse effects of the risks (Sadgrove 2016). This report will utilize Simons’ Risk Exposure Calculator to evaluate the risk zone to which the organization belongs and also the measures that the organization needs to take.   

The report will calculate the risk faced by the organization Property Millionaires through the use of Risk Exposure Calculator. For this, on the basis of the case study appropriate scores have been given on each section of the calculator, namely, risk due to growth, culture and information management. The total score of the organization is calculated on the basis of the individual score of the organization on each of these sections to understand the risk zone to which the organization belongs.    

The different kinds of risks that the organization is currently facing on the score of its unprecedented growth are listed below-

• Risks on the score of pressure for growth
• Risks on the score of expansion
• Risks on the score of inexperience of the workers

George, the owner of the organization wants the workers of the organization to strive for a higher level of growth so as to be on par with the other rivals of the organization. However, this pressure which he is putting on the workers for a higher level of growth might adversely affect the organization (Hopkin 2018). For example, it is seen that the workers are given an aggressive sales target so to give a higher level of performance (Hillson and Murray-Webster 2017). The workers of the organization in order to meet their monthly targets are resorting to the use of unethical as well as unfair practices which is adversely affecting the quality of services offered by the organization. Thus, it is likely that because of this approach the organization might face various quality, customer, services and other kinds of issues. The organization, Property Millionaires, thus, scores a point of 3 on the Risk Exposure Calculator.

The organization, Property Millionaires currently has 100 employees within their organization and the employees are given special training so that they are being able to meet the expectations of the organization. However, because of the expansion strategy which is being followed by the organization currently the organization is hiring fresh individuals to meet the required number of employees. It is pertinent to note that very little amount of training is given to these individuals and thus the quality of services that they offer to the customers is fast decreasing. Thus, the organization Property Millionaires has a score of 4 in this index on the Risk Exposure Calculator.

Property Millionaires also face a significant amount of risk because of the inexperience of the new employees that it is employing. For example, the case study states that one of the major factors which had contributed to the growth of the organization is the high quality of services that it offers to the customers. However, the new employees are being offered with very little or no training and this is likely to adversely affect the quality of services that are being offered by the organization to the customers and this is likely to reduce the satisfaction level of the customers (Bromiley et al. 2015). Thus, Property Millionaires has a score of 2 in this index of the Risk Exposure Calculator.        

The different kinds of risks that the organization is currently facing on the score of the workplace which it is currently following are listed below-

• Risks on the score of rewards for entrepreneurial risk taking
• Risk on the score of executive resistance to adverse news
• Risk on the score of high internal competition

Farrell and Gallagher (2015) are of the viewpoint that the culture which is being followed within the spectrum of an organization greatly determines the prospects of the concerned organization and thus it becomes important for the organizations to foster an effective culture within the organization. The employees of Property Millionaires are required to give seminars to the customers and depending on the quality of seminars that are being offered to the customers they decide whether they want to opt for the services offered by the organization or not. Furthermore, the employees are not being given any fixed salaries and the commissions that they get depend on the number of customers that they are being able to bring to the organization. The result of this is that the employees often take the help of various innovative measures and seminars without the approval or permission of the managers which can adversely affect the prospects of the organization in the longer because of the fact that the employees often mislead the customers (Grace et al. 2015). Thus, Property Millionaires has a score of 3 in this index on the Risk Exposure Calculator.   

The executive officers and the managers of Property Millionaires not only receive the bad or adverse news in a pleasant manner. It is pertinent to note that the organization does not have any fixed seminar format and the employees often modify the style of seminars as per their convenience. However, only the style or the formats of seminars which have proven to be successful are being reported to the managers whereas the unsuccessful ones are not being reported. More importantly, it is seen that the managers do not encourage the experimentations of the employees to attain a higher level of success. Thus, Property Millionaires has a score of 2 in this index on the Risk Exposure Calculator.

One of the most important aspects of the organizational culture of Property Millionaires is the intense competition among the different employees of the organization because of the aggressive sales targets which are given to them. In addition to this, it is seen that employees who are giving a higher amount of productivity are given more preference in comparison to the ones with a lower amount of productivity. The end result of this is that employees often resort to the use of various unethical as well as unfair means for the enhancement of the number of customers that they bring within the fold of the organization (Carvalho and Rabechini Junior 2015). Property Millionaires, thus, has a score of 3 in this index on the Risk Exposure Calculator.   

The different kinds of risks that the organization Property Millionaire is currently facing on the score of information management and handling are listed below-

• Transaction complexity and velocity
• Gaps in diagnostic performance
• Degree of decentralized decision making

As opined by Brustbauer (2016), the legislations as well as the stipulations which affect the real-estate business have undergone a significant amount of change in the recent times and the enterprises related to this industry need to take them in effective consideration for the process of their business operations. However, in the particular context of the organization Property Millionaires it is seen that the organization does not regularly updates its directory and also the seminars which are being given to the customers by the employees are often without the approval of the managers. The net result of this is that the organization faces a significant amount of risk because of this and thus the organization scores 2 in this index on the Risk Exposure Calculator.

The case study clearly mentions that the managers of the organization Property Millionaires often do not have concrete data regarding the actual performance of the different employees of the organization. This is an indicative of the fact that the employees work on a commission basis and their remuneration is decided on the basis of the number of customers that they bring to the organization. In the absence of any concrete data the managers are not being able to determine the actual performance of the employees or the organization and this can pose a significant amount of risk to the organization (Chance and Brooks 2015). Property Millionaires, thus, has a score of 3 in this index on the Risk Exposure Calculator.

Property Millionaires follows a decentralized decision making process wherein the major decision making power is wielded by the employees of the organization. The employees thus as per the situation modify the seminar style or format and also the packages that they sell to the customers without any prior approval or the permission of the different managers of the organization (Falkner and Hiebl 2015). This can pose a significant amount of risk to the organization because of the conflict of interest between the employees, managers and also the customers (McNeil, Frey and Embrechts 2015). Thus, Property Millionaires has a score of 2 in this index on the Risk Exposure Calculator.    

Figure 1: Score of Property Millionaires on Risk Exposure Calculator

Source: (Created by the Author)

The above given figure, that is, the result of the analysis of the organization Property Millionaires on Risk Exposure Calculator clearly indicates that the organization belongs to the caution zone since the score of the organization is 25. This means that the risks that the organization is currently facing are within controllable limits and can be easily mitigated through the usage of different kinds of effective strategies which will help it to address the risks related to growth, organizational culture and information handling. This is important from the perspective of the concerned organization because its continued growth will depend on the effectiveness as well as efficiency with which it will be able to mitigate the adverse effects of these risks which it is currently facing.  

Property Millionaires for the mitigation of the different kinds of risks that it is currently facing can take the help of the below given three measures-

• Fixed Salary:The organization by offering fixed salary to the employees would be able to address the performance related issues and would also be able to reduce the fierce competition which exists among the employees in a substantial manner. Furthermore, this would also help the organization to manage the performance of the individual workers of the organization in an effective manner.
• Improvement of organizational culture:The organization needs to foster an adequate congenial workplace culture within its framework so as to improve the performance of the employees. For example, it is seen that the fierce competition which exists in the organization is adversely affecting the culture of the organization and thus through the inculcation of an adequate culture the organization would be able to mitigate the performance related risks in an effective manner.
• Training Program:The organization by offering the right kind of training to the fresh employees would be able to improve the quality of services offered by the employees to the customers in a significant manner. It is pertinent to note that the organization is known for the quality of services that it offers to the customers and therefore this is likely to improve the satisfaction level of the customers in a significant manner

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