"MBA402: Governance, Ethics, and Sustainability Assessment 2 Case Study – Property MillionairesBackgroundProperty Millionaires is a company that offers ordinary people a range of realestate investment seminars and ongoing mentoring services. The philosophy atProperty Millionaires is that anybody can become a property millionaire if theyhave the right mind set, education, and support.The company was established three years ago by successful real estatedeveloper George Kirzner. He has grown Property Millionaires into a mediumsized business employing over 100 staff with offices in Sydney, Melbourne,Brisbane, and Adelaide. One year ago the company’s seminar sales increaseddramatically and now its operations are expanding faster than the company’scapacity to hire and induct new staff. George considers this to be a great problemto have and continues to hold the staff accountable for delivering strong financialperformance.But the company’s regional managers are not as thrilled as George with theorganisation’s surge in growth. The rapidly increasing need for more consultantshas forced the company to lower their employment standards, hiring many newpeople with little to no previous experience in sales.Business Model1 | P a g e Property Millionaires generates leads by advertising free introductory seminarsthat explain how real estate investment can be used as a vehicle for achieving anearly retirement. Seminar attendees are contacted after the introductory seminarby a consultant who invites them to a free face-to-face consultation. At thismeeting the consultant attempts to sell the potential new client a real estateseminar priced at $10,000.The consultants are managed by regional managers in each city. The regionalmanagers report to a senior management team that includes George as thecompany CEO.ConsultantsConsultants are given aggressive sales targets that are set by the seniormanagement team with little or no input from either the consultants themselves orthe regional managers. They are paid solely on a commission basis, that is, theyearn a percentage of the $10,000 seminar fee for each client that they sign up.Each month the consultants are ranked by the regional managers according totheir sales performance. The highest performing consultants are treated likeroyalty and given special treatment by the regional managers. Because theconsultants are pitted against each other like this, the company culture is highlycompetitive to the point of ruthlessness.Regional Managers2 | P a g e Regional managers act without a sense of the larger corporate strategy. There areno well-defined information channels for sharing information either betweenthemselves or with senior management. The regional managers have also surrounded themselves with “yes” men andwomen, and do not hear much, if any, bad news. They tend to leave theconsultants alone because they do not understand the sometimes complexlanguage of the consultation process. Managers have limited access toperformance data and spend much of their time trying to resolve flare ups orunanticipated emergencies. From the information they can access they tend tofocus solely on seminar sales figures and their monthly performance reports tosenior management are often late or not submitted at all. Senior Management TeamA high percentage of Property Millionaire’s business is based on new seminars.The seminars are developed by George and the senior management team: acreative, risk taking group of real estate business people. In this regard they donot act like a team but are given a great deal of autonomy and so develop seminarcontent independently of each other, only returning to the group once they havecreated something of substantial value. There is an increasing frequency in the failure of new seminars.Client Satisfaction3 | P a g e Client complaints are on the rise. Clients say they feel well respected and servicedby their consultants until they sign up for a seminar.At this point their consultantseems to lose interest in them and often fails to return their phone calls.Risk Exposure CalculatorBe sure to include the Risk Exposure Calculator in your assessment answer.4 | P a g e "