Pressure for Performance
The risk of pressure for performance in the company is medium from the employees’ perspective. The reason why it is medium is associated with the payment mode. The risk is divided into two different subsections where one section is high, and the other is low thus bringing a medium level of pressure for performance. The pressure for performance was high when the company paid the employees based on the commissions they made from the sales; however, after introducing the basic salary, the pressure levels were dropped to a reasonable level (Uhl and Gollenia, 2016). It is essential to notice that the employees do not only perform to get paid but they also perform to build their careers and to prove that they are able to deliver in line with the organizational goals. In line with this aspect, the pressure for performance goes a level higher, and this is because the best employees are recognized and rewarded. Therefore, the rest of the employees are pressured to perform so that they can meet the organizational goals and be rewarded as their counterparts.
Rate of expansion
The company has expanded to four different areas of operations; Sydney, Melbourne, Brisbane, and Adelaide. As a result of the expansion, the company has been able to reach a more significant population that it serves. In this case, the risk level is low. Growth in an organization can affect its operations in different ways (Hardy and Maguire, 2018). The first way is negative, and this is associated with the way the customers receive the organization’s services and products in a specific area. In the case of Trading.com, the customers seem to be embracing the services of the company, and this is seen in its financial statements that have depicted the ability of the company to make huge profits.
Expansion reduces the risk of losing the customers to the competitors. The presence of the company in four different locations means that the company covers a broader area and that brings about the possibility of dominating the markets in the industry as well as increasing the profits (Corvellec, 2010). The case study of Trading.com does not depict in any way that any of the four branches have experienced negative returns. Therefore, it is evident that no negative pressure is affecting the growth of the company. In this respect, the risks that might be associated with expansion to different areas of operation are minimal.
Rate of Expansion
The risk of inexperienced employees is high in the case of the organization provided. According to the case study, it is evident that the growth of the company is fast and that has brought about the challenge of identifying the most suitable employees for different positions. Therefore, the company has been employing in a rush, and that has led to the employment of workers who do not have previous knowledge in the department of sales. The inexperience of employees is characterized by the aspect of the employees lacking the necessary knowledge and skills to deliver in line with the organizational goals, and that puts the company at high risk of affecting customer service delivery (Haimes. 2015).
- Pressure points due to culture
- Rewards for entrepreneurial risk-taking
The risk level of reward for entrepreneurial risk-taking is low at the company. It is the obligation of an organization to make sure that when the employees engage in activities that add value to the company, they are rewarded (Reason, 2016). In the case of Trading.com, there are several signs that the company has proper plans of rewarding the risk takers. The first sign is associated with the aspect of ranking the employees. Despite the fact that the company employed the strategy of paying the employees on the basis of a basic salary, it is evident that the company is doing a tremendous job to recognize the employees that are taking risks to meet the organizational role (Torres, Yadav, and Khan, 2016). The first step of rewarding is acknowledging the input of the employees. The managers have been termed to have an essential role when it comes to acknowledging the employees who are determined to meet the organizational goals.
The second sign that the risk of rewarding the employees is high is associated with the gifts that are rewarded to the employees who take risks to meet the organizational goals. After the employees are ranked in line with their performance at the company, they are rewarded. The rewards come in forms of expensive gifts and holidays which are fully funded by the company. When the employees are rewarded for making sure that a company meets its organizational goals, there are two possible results (Linkov, Anklam, Collier, DiMase, and Renn, 2014). The first result is associated with the motivation of the other employees. When an employee sees that his or her counterpart is rewarded, the employee tries the best to fit in the shoes of the other employee by working harder so that he or she can be rewarded. Therefore, in this respect, the risk of losing the employees is low because they are rewarded (Sulaiman, Abdul, Nordin, and Noor, 2016). The second result is associated with motivating the current employees to work hard to maintain the rank they already possess. When employees are motivated to continue being productive, the company is at the best position to, and this is because they are employees who are ready to do anything to meet the organizational goals and this is because they know the advantages that come along with being productive.
Inexperienced Employees
The risk associated with the executive resistance to bad news is high. An organization must have an executive that knows about the best ways to handle news which are not pleasant (Zsidisin, Ellram, Carter, and Cavinato, 2004). The bad news that reaches the executive is not handled in the way they should. Looking at the case, the managers have proved that they are not in the best position to manage the bad news they receive from the consultants. When the sad news reaches the company, the consultants are left to deal with the news alone. The aspect of leaving the junior employees to deal with bad news is unprofessional, and it demonstrates leadership that only wants to be associated with the positive news of the company. An organization that has the capability of dealing with the bad news does not need to leave the entire burden on the shoulders of the junior employees. Instead, it comes out to deal with the news and take full responsibility (Knechel and Salterio, 2016).
Level of internal competition
The level of internal competition is high in the company, and that puts the organization at risk of different units failing to work together to attain the organizational goals. It is essential to note that as much as an organization might be fostering internal competition, it comes with its fair share of challenges (Shameli-Sendi, Aghababaei-Barzegar, and Cheriet, 2016). One of the challenges is the lack of transparency which is dangerous to a company. An organization ought to make sure that the employees work together to attain the set goals. Failure to doing so, an organization might lose, and this is because the employees might look down on others instead of providing information and support that can help in attaining the organization’s desired goals (Chemweno, Pintelon, Van Horenbeek, and Muchiri, 2015). In the case of the organization at hand, internal competition is evident because of the aspect of ranking and rewarding. The method of ranking at the company does not target the input of the groups, but it targets the input of individual employees. For example, the case study shows that the rewards and luxury holidays are given to the top performing employees. Therefore, it is evident that most of the employees try to deliver at an individual level and this is because they are likely to be rewarded as individuals and not groups (Villa, Paltrinieri, Khan, and Cozzani, 2016). When internal competition is promoted, the employees tend to work in secrecy and privacy because they want to emerge the best among other workers (Renn, 2017). If the internal competition was not promoted at Trading.com, it is evident that the ranking method would target teams and departments rather than individual employees.
- Pressure points due to information management
- Transaction complexity and velocity
Reward for Risk-Taking
The company has proved that transacting in the company is not a complex aspect. The reason for stating so is associated with the fact that the company has done well in sharing crucial information with the clients. At the same time, the company has done a recommendable job when it comes to sharing information with the consultants. From the consultants’ perspective, it is apparent that the customers have been provided with the information that they need to know more about the organizational transactions (Glendon, Clarke, and McKenna, 2016). One point that backs the point is when the customers state that the employees are too good to them until they enroll in the course. Transaction complexity comes in place where the methods or structure of transactions is not familiarized with the people who are supposed to use them. Throughout the case study, it is evident that at no point the aspect of transaction complexity emerges.
Gaps in performance are evident in different ways, and this means that the risk is high. The organization has been employing the new employees in a hurry, and that has affected the quality of the employees that are coming on board (Mohaghegh, Kazemi, and Mosleh, 2009). Most of the employees that are coming on board do not have the experience that is needed for them to be effective and that means that their performance cannot reach that of the employees who have been working for the company. The gap is also evident in the case of the already experienced employees. The customers have stated that the employees are good for them but until they convince them to buy their products. The performance of the employees has proved to be affected by the outcomes of the customers. When the customers agree to purchase from the employees, the employees are satisfied, and immediately their performance reduces to an incompetent level.
The degree of decentralized decision making
There seems to be a high degree of decentralized decision making thus putting the company at high risk. Trading.com is a company that has different branches, and that means that there are different levels of management. According to the case study, the regional managers make decisions without the consideration of the corporate strategy. The corporate strategy is put in place to make sure that all branches of the company are guided on the best strategies to follow (Bahr, 2014). Therefore, when the regional managers despise the strategy that should be followed, they demonstrate that there is a decentralized decision-making process (Aven, 2016).
Executive Resistance to Bad News
A centralized decision-making process means that all the shareholders act in line with the decisions that have been made by the highest authority of the company. Therefore, there are different results that come along with centralized decision making (Aqlan and Lam, 2015). The first result is a unified procedure while approaching matters of a company. An organization practices the centralized decision-making process if the organization wants to establish law and order. Law and order mean that an organization reads from the same script (Bromiley, McShane, Nair, and Rustambekov, 2015). When some of the sections of management implement decisions they have constituted, the aspect of centralized decision making is not evident. The second result is associated with the sense of cooperation in the company. Cooperation means that the regional management corporates with the highest office of the company. Unfortunately, in the case of Trading.com, cooperation is not a term that has been taken seriously by the regional managers.
References
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