Ross Woods, rev. 2011, '21
Workplace Health and Safety (WHS)
Your risk management strategies must include WHS requirements as follows:
- management of the organization
- operation of WHS as part of the business plan
- procedures for managing hazards in the workplace (identify, assess & control)
- identification of specific hazard issues (e.g. occupational violence, security, manual handling, equipment and hazardous substances) according to your industry and kind of business
- how you will ensure the safety of members of the public and contractors visiting the your business's workplace.
First, you can often eliminate the risk altogether.
If it isn't possible to eliminate the risk, you can minimize it by:
- engineering controls (e.g. failsafe systems, equipment guards)
- substituting it with a lesser hazard
- isolating the hazard from personnel at risk
- changing practices (e.g. safe work practices, procedures, training in First Aid or emergency procedures)
- using personal protective equipment (PPE)
Recording your risk management is normally necessary:
- for insurance purposes
- for ongoing evaluation
- as a legal defense if someone tries to sue you for negligence.
General business risks
The various kinds of business risk affect almost all organizations, and specific risks vary according to the kind of business. These are the main categories, but they are not comprehensive. Financial risks are closely related but are listed separately.
Unless a risk management has a defined scope, all risk management should cover general business risks:
- Political: Adverse impact of change in government policy
- New businesses: growing too fast, hiring staff too early, undercaptitalization
- Market change: e.g. due to new economic conditions or new competitors, change of customer tastes, other emergent trends.
- Dissatisfied stakeholders, e.g. clients, students, or other stakeholders.
- Staff: Change of Board Chairperson or CEO, loss or; non-performance of key staff, risks relating to hiring new staff.
- Operations: Ineffective asset management, failures in providing services or products, mistakes in project management resulting in losses.
- Reputation: Incident that attracts negative publicity
- Information Technology: IT security, data storage, human error in managing information, problems implementing new IT.
- Finances: Investment in a project with little assured return, exposure to interest rate increases, corruption esp. handling and banking of funds, dependence on narrow clientele base or on only one major client, currency fluctuations.
This includes external funding. Any program that relies on external funding faces a risk of the funding party pulling out. In education, this can mean the bigger the program, the higher the risk. (By contrast, if the college is funded by student's tuition fees, risk usually diminishes if you have consistently high numbers of students.)
- Legal obligations: Non-compliance with legislative obligations. Non-compliance with contractual obligations. Liability deriving from inadequate policies or procedures. Unanticipated weakness in contracts.
- Legal liability resulting from problems in products or services.
- Public liability resulting from accidents on premises.
- Communication with stakeholders: e.g. difficulties caused by distance or cultural barriers.
- Fire, especially its effects on records.
- Emergency other than fire e.g. major storm, major crash.
- Information Technology: IT security, data storage, corruption of data due to software failure, loss of data, effects of electricity failyure and power surges, loss of backups, human error in managing information, problems implementing new IT, loss of telephone and Internet connections.
- Environmental harm. Spillages of toxic chemicals, release of toxic gases, destruction of natural woodland, etc.
- Appropriation of your trading identity. Could another organization use your name and/or logo? It might be quite legal as long as they do not fraudulently pretend to be you. For example:
- If someone else uses your logo, you only have copyright on it and are in a weak position. You might need to register it as a trade mark.
- If you are a Pty Ltd company, nobody else in Australia can register that name as a Pty Ltd company. But they could register a not-for-profit (Inc.) or an aboriginal corporation with the same name except for the Pty Ltd ending.
- The converse is true. If you are a not-for-profit organization, nobody else in your state can register that name as not-for-profit organization. But they could register as a not-for-profit with exactly the same name in another state, or register a company with your name and a Pty Ltd ending. If this poses a risk, the only real answer is to register a trade mark.
- In WA, non-profit organizations can no longer register business names because (technically speaking) they are not a business. As a result, so the abbreviated name that its uses in trade is a risk. For example:
- You are "The Western Australian Association for the Development of Immigrant Youth Leadership Training and Education Inc." The name is too long to use as your regular training name, and you don't want to call yourself WAADIYLTE. So you decide to call yourself "Leadership WA" and put the full name in small print next to your ABN.
But the name "Leadership WA" has no protection so anybody could use it. And if they trademarked it, they could even stop you from using it.
- In some countries, the owner of the trading name owns the business. In one country, a business that hasn't registered its trading name is vulnerable to another party that wants to register it as its own. The other party can take get a court order enforcing a business takeover.
General financial risks
Financial risks affect almost all organizations and are intimately tied to general business risks.
Financial management
- Low cash reserves
- Money that doesn't go through the bank account
- Credit risks
- Bad debts beyond budgeted allowances
- Money still in the bank for debts that haven't been paid yet (it looks like you're okay but the money is already spent)
- Theft
- Low income high expenditure periods (e.g. Christmas holidays)
- Dependence on informal funding agreements (e.g. volunteer might drop out, loaned equipment might be recalled, etc.)
- Investment in a project with little assured return
- Exposure to interest rate increases
- Dependence on narrow clientele base or on only one major client.
Macroeconomic climate
- Exposure to interest rate increases
- Downturn in business credit
- Downturn in sector economic activity
- Currency fluctuations
- Changes in taxes and fees (such as changes in tax laws)
Personnel
- Changes in staff salary packages
- Changes in personnel and policy at board level
- Disputes at board level
- Changes of staffing in financial management
- Loss of key staff
- Loss of any staff requiring substantial hiring costs for new people
External funding
Any program that relies on external funding faces a risk of the funding party pulling out. In education, this can mean the bigger the program, the higher the risk. By contrast, if the college is funded by students' tuition fees, risk usually diminishes if you have consistently high numbers of students.
Vocational college
According to risks identified by the Training Accreditation Council across all WA Registered Training Organizations, most vocational colleges can be deemed high risk for one reason or another.
Given also those identified by the validator, you are teaching in a high risk situation if:
- This is your first time teaching.
- This is your first time teaching particular units.
- You are the only teacher in your field of expertise in the program.
- You are teaching in a "higher" qualification (Diploma or above).
- Your branch is starting multiple new programs at the same time.
- You have an intensive schedule (short intensive courses or full-time Austudy students).
- You are teaching students who are quite different from those with whom you are accustomed (e.g. different cultural or linguistic background, socio-economic or age group).
- You are unfamiliar with training sector protocols.
- You are using distance education.
- You are depending on technology with which you are unfamiliar (e.g. other people's music equipment rather than your own).
- A program is not really core business.
- Courses that have a higher education flavour and are not strictly vocational.
- Courses that are accredited, as opposed to those using endorsed units.
- Multi-campus operations, especially interstate campuses (because communication may be difficult).
The Training Accreditation Council has also identified other risks:
- Overseas programs (because they are difficult to monitor).
- Partnerships (where the training organization works with corporations in which it places trainees).
- Information Technology programs, because IT people focus on IT skills but are less focused on other skills).
- Schools (because it is difficult to require school students to perform at industry standards).
- No external audit within three years
- Licensing and regulatory requirements
- Programs subject to strategic industry audit
- Frequent change of ownership
- Additional compliance requirements from other government agencies
Education
If high risks in education go bad, the possible effects are:
- Frustrated students give the program a bad name by word-of-mouth
- Teachers get frustrated and want to give up
- Students fail their courses
- The program collapses
- The program gets into financial difficulties
On the other hand, if you're new, the intense excitement of pioneering and trying to do your very best this could make it your best ever year. You could personally grow a lot, and if you take students with you, they might be the best students you ever produce. Later on, it might not be anywhere as exciting and challenging when all the teething problems are solved and things run more smoothly.
In education, managing a risk invariably means improving the program in some way. It might be as simple as assigning someone to keep an eye on it, report back, and tell the group when something needs to be done. (In Burocratese this is called "monitor the situation.")
Managing the risk might mean providing helpful supervision to someone who needs it, recruiting new staff, providing some professional development, changing forms, referring the matter to someone else who can fix it and checking that they do, etc. Alternatively, it might indicate that something serious is wrong and that more serious action is needed.
Managing the risk might not always generate more work; your need may be to make your systems more efficient. For example, if you have a problem with students taking too many assessments, your solution might be to combine some of them and make them more holistic. That's less work and stress for everybody.
Here's another example: Why generate two different forms when one will do? Why require two pages of forms when one will suffice?
You might also ask: What particular changes are necessary? Is any PD needed to manage the issue? If so, what PD? Who is responsible for ensuring that changes are made? When will it be done by?
Overseas education
This particular approach assumes that an Australian organization is working with another organization in another culture and language. It is based on Southeast Asia, but could also apply to many other countries.
Political/legal risks in Australia
- Change of legislation or regulations
- Change of interpretation of rules, especially accreditation standards
- Loss of an accreditation or recognition
Political/legal risks in their country
- Radical change of legislation, regulations, or political regime
- Change of local government officials
- Change of interpretation of rules at local level
- Personal falling out with a key local official (including failure to pay bribes)
- Very slow paperwork processes
- Status of personnel and visa difficulties
- Loss of local accreditation or recognitions
- If the program had local servers, local government officers could commandeer or bug the servers to collect students' personal information.
- A program could attract the unfavorable attention of local government officers even if it is not illegal in any way. It could be simply too big or successful, making local officials or universities feel threatened.
Legal risks
- The actual terms of the agreement might be:
- forgotten by one or both parties
- too narrow to include later developments
- altered by later precedents that don’t follow the actual agreements
- too hard to get out of if needed
- The agreement might omit clear statement of legal jurisdiction, or be unable to enforce an agreed-upon jurisdiction statement
- Possibility of non-compliance with local laws
- Overseas organizations legally challenges to a section in agreement, no matter how clear it is.
- Precedents affecting this or other activities in that country
- Possibility of forged graduation diplomas.
- Intellectual property and information
- Pirating of intellectual property
- Leaking of information that must be confidential under the Privacy Act.
- Leaking of market intelligence
Financial risks
- "It costs more than you think and takes longer than you think." (Peter Burch) Even if everything goes well, the delays can be costly.
- Rapid change of economic conditions in host country
- Currency fluctuations creating adverse exchange rates and profitability.
- Loss or delay of funds in transfer.
- Unable to get payment
- Embezzlement
- Problems with local accounting methods, including:
- Possibility of dishonest practices
- Weak accounting standards
- Weak auditing standards
- Standards and practices that are good but incompatible with Australian standards
- Costs of travel and accommodation might outweigh profitability, especially if you need to do more traveling than anticipated to maintain adequate communication.
- Errors in budgeting and cost blowouts
- It takes longer than you think to build a local market image and niche and hit a critical mass of student numbers
- Their staff might request funding or other assistance apart from and any agreed-upon arrangements.
Strategic relationships
- The Australian person striking the deal is different from the people who will deliver the goods
- Key people have a personal "falling out", in particular key liaison personnel from both side
- Including extra parties in the agreement, making the relationship unmanageably complex
- The local partner will withdraw to get a better deal with another RTO.
- Australian staff might spin off their own competing business.
- Loss of key staff at either end of the partnership
- Failure to attain and maintain win-win relationships
- Difficulty in making organizational procedures compatible
Lack of expertise
- The Australian organization could lack a field of expertise in managing the relationship that it didn’t expect to need
- The overseas body could be unable to hire enough suitable staff; the risks would be higher if:
- The program is new (it did not already exist in some form).
- There is a high staff turnover.
- There is a shortage of suitably qualified labour
- A negative public incident makes prospective staff unwilling to apply.
Market placement and publicity
- Rapid change in marketplace: e.g. changes in local short-term fads
- Embarrassing incident in local college
- Embarrassing image in Australian operations
- Australian staff might leave and spin off their own operations
- Property problems, e.g. relocations that negatively effect market image and placement
- Profiteering by middle-men
- Entry of stronger competitor.
- Publicly expressed dissatisfaction by partner organization or its students, no matter how unjustified. ("Blame the foreigners")
- Adverse publicity via their local government
- Precedents affecting other activities in that country
Academic program
- They may want to offer a wide choice to their students i.e. articulation to an unrealistically wide choice of universities. But it’s easiest to build a good articulation path to only one university. They may also want to articulation to US Higher Education colleges, which Australian VET cannot guarantee.
- Australian training packages and accredited courses:
- Errors in training packages and accredited courses
- Transition to new training packages and accredited courses
- Defining academic standards
- Pushing standards too high to cover assessment risks
- Pushing standards too high through racial prejudice that they are not as clever as Australians (One Australian senior academic thought that only one person in one million in an Asian province with hundred of institutions of Higher Education had the ability to complete an Australian Ph.D. [!])
- Pushing standards too low to sustain or increase student numbers
- Pushing standards too low because of inability to fail some students (politically well-connected, paying top dollar, etc.)
- Quality assurance short-circuited by
- Top-down structures
- Conceiving QA to be only bureaucratic paperwork, not what actually happens
- Poor records
- Dishonest staff
- Wanting to appear in a good light, embarrassed to admit weaknesses
Context
- How much can you contextualize an Australian program until it’s something different?
- Local identity: we want to do it our way anyway, not a foreign way
- Will Australian seconded staff be cast in a negative light if he/she does not approve of a local practice, especially in a quality audit situation? (E.g. appearing to be colonialist, imperialist, condescending, or racist.) The appearance might also be a reality, not just an impression given.
- How will you do industry consultation?
- Different industry requirements and expectations for sound reasons
- Different industry requirements and expectations for reasons incompatible with Australian requirements. Students might be incorrectly taught by local firms e.g.
- outdated ideas
- slow bureaucracies
- ineffective methods
- ineffective placements (e.g. run errands, observe only, etc.)
- different careers structures
- standards incompatible with Australian standards e.g. WHS, staff management, privacy and confidentiality, conflict of interest.
- Problems interpreting the meaning and value of local overseas qualifications (some might be very good but different, or reflect accredtiion levels higher or lower than their ordinary meaning of their nomenclature.)
- Inequitable treatment of classes of minority groups of students, e.g. female, disabled, minority ethnic groups, class-bound races
- Australians may be unable or unwilling to understand local issues, e.g. marketscape, business climate, innovations, cultural aspects, etc.
English Language Programs
- How good is students’ English if:
- it is not their first language,
- they don’t need to live, and
- teachers don’t speak it themselves as a first language?
Students/ expectations
- Do students want to use the qualification for migration purposes?
- Will students want or need to be able to use the qualification in Australia or another country?
- Do students expect the qualification will give them a prestigious, cushy office job (or something similar)
Transport problems
- Getting flights and other transport (e.g. airline collapses, flights suspended through accident, bomb threats, terrorist attacks, etc.)
- Difficulty in getting suitable travel insurance in high-risk situations
- Personal safety problems
- Long intracity transport delays
- Getting suitable accommodation
Communication risks
- The Australian and local persons might have misunderstandings
- Their leadership might miscommunicate with their staff students, and their general public
- Local top-down structures might mean:
- the message might not be the same when it gets to the grass-roots
- you get a lack of worthwhile feedback from grass-roots stakeholders (instructors, workplace supervisors, students, students parents, etc.)
- Mixed messages caused by different people communicating on behalf of the same organization.
- Australian spokesperson might miscommunicate with their leadership
- Spokesperson and liaison personnel lack sufficient authority to speak on behalf of their organizations
- Mail and email
- Letters and documents delayed or lost in mail
- Emails not arriving
- Written letters being misconstrued
- Inability to distinguish between personal and official email messages
- Culturally different roles for spoken and written communication
- Breach of security in communication
- Problems caused by rumour and gossip
- Misunderstanding caused by expectations, assumptions, and private agendas
- Cultural resistance to what is communicated, no matter how clearly expressed
- Higher risks:
- Across language barriers
- At the implementation stage
- At the program review stage
- At the state of assessment validation
- In larger organizations where more people are involved
- At times where one side is dissatisfied or faces problems but feels unable to express their views.
- Change of key personnel
- Change of training package
Education risks
- Their educational expectations
- Lecture only
- Teacher is the Great Expert
- Rote-memory assessment, expected by students and local staff, encouraged by some local teaching qualifications.
- Tendency to pass anyone who jumps though all the hoops
- Dishonesty
- Student cheating and plagiarism
- Parents ("We paid, so you need to pass this student")
- Staff cheating, through profit (bribery) or pressure by students, students' families, or staff peers
- Employer supervisors giving dishonest or useless reports, though profit or pressure
- How can you give the family member of an influential local civil servant a NC assessment result?
Community development
Wider context
CD Community Development.
- Intercultural situations, especially if:
- There is considerable socio-economic disparity between the CD organization and locals
- You are working across language barriers
- The CD organization must pioneer its own way into the country, and ethnic group, or a specific community
- Personnel are bringing families, especially school-age children
- CD staff are not long enough on site to learn the local language and adapt to local culture
- You plan to give resources to locals when you leave
- Changes in government regulations
- Changes in visa regulations (if in another country)
- Political events such as elections, especially if they result in a change of government
- International events that cause friction between donor and recipient countries e.g. politician's comments taking opposite sides in a war somewhere else
- Disasters e.g. famine, earthquake, flood
- Social events e.g. riots or other civil disturbance, rapid increase in unemployment, monetary crisis
Organizational
- Unexpected loss of staff, resulting in loss of their local knowledge, personal networks, and lessons learned
- Withdrawal of funding or changes in conditions for getting it
- Possibility of lots of people (both staff and local people) becoming victims of management mistakes during the pioneering phase
- Personal misunderstanding causing friction or animosity within the team
- Resentments with local staff over control, especially financial control
- Change of team leadership
- Changes imposed by off-site leadership of the community development organization
- Sudden influx of large numbers of new, inexperienced staff
- Occupational stress
- Organizational structure (integrated, joint board, liaison) does not create effective working relationships.
Local relationships
- Withdrawal of key local personnel, resulting in loss of their local knowledge and personal networks
- Personal misunderstanding causing friction or animosity with key local people
- An incident with negative publicity (even if it's not your fault)
- Being seen to side with a political, social or ethnic group that is antagonistic to the target population.