INDEPENDENT UNIVERSITY, BANGLADESH

School of Business
MBA Program

Summer– 2020
Course: MBA 509 (Human Resources Management)

Quiz Assignment- 2

Title: ‘ABC Learning: Collapse of an Entrepreneurial Venture’

Submitted By

Tayabur Rahman
ID: 2021685

Submitted To

Dr. Nazmul Amin Majumdar

PhD (Australia)
ALA Scholar
Professor, Department of Marketing
Independent University, Bangladesh

September 07, 2020

1. Identify and discuss the main business features of the childcare industry [Generate a
list of competencies].

Ans: Mainly Childcare is a social service entrepreneur and assimilate to a cottage industry. It
has been passing its rising phase. The need for childcare is uprising since more and more
women are joining as full-time staffs.
There are certain business requirements to be successful in the childcare industry. To
maintain the business standard and increase the business sustainability, such features are
needed to maintain. Let’s talk about some of those:

a. Govt. Rules & Regulations: To control the childcare industry, having govt strict rules
and regulations is important. Being a very sensitive industry, it requires proper
governance from the administration side in order to avoid any type of negative impact
from mass people. In order to avoid child abuse, ensure the staff ratio proportionate to the
child numbers and ensuring other facilities for the child at the childcare govt rules and
regulations are important.
b. Authorization: Each childcare or daycare should have license from the govt authority to
ensure its legitimacy. The authority will check if all the requirements are fulfilled by the
childcare or not.
c. Location with Other Facilities: The premise of the childcare is one of the most
important issues to be considered. The premises should be ample and open air
conditioned with allowing enough daylight. There will be enough rooms dedicated to the
children according to their age limits. Bathrooms, toys and other instruments should be
sufficient along with enough workforce.
d. Strong HR Personnel: There should be a good HR body to maintain the childcare’s
standard, fair recruiting, workforce management and run the administrative tasks. An
experienced and competent person needs to be hired to ensure all these activities overall.
The expected candidates of this childcares also should be informed about his/her JD, job
responsibilities, transparency and other issues.
e. Expert Board of Governance: The governing body of the childcare organization must
have sound knowledge & expertise about the field of childcare & child development.
 f. Meeting between Parents & Teachers: There should be a regular feedback session
arranged by the childcare organization with the parents to keep them updated about their
children’s progress.

g. Training & Development: From time to time, there should be training and development
programs for the childcare workers to let them be updated about their work and increase
their working efficiency.

h. Development of the Curriculum: A specific curriculum is needed to address the need

of the different aged children group. The curriculum should be prepared is a way so that
there should be all the directions for improving the children’s knowledge, color sense,
music taste, language skills, art skills and so on.

2. Critically evaluate the main reasons for ABC Learning’s collapse. What are the lessons
learned from ABC’s mistakes?

Ans: ABC Learning flourished so exponentially withing short time since it started its
business operation. It was going well until some internal problems started occurring which
lead to this potential organization massive fall. Let’s discuss about those:

a. Mismatches of Accounts: There is no doubt that the accounting book keeping system
was not transparent. Accounts books were not maintained properly. There were
significant mismatches in profits, revenues, loses, transactions. Pre tax earnings were
questionable.
b. Corruption in Transactions: After the appointment of the new auditor, there was an
investigation and according to that, The CEO, Mr. Eddy Groves, appointed his former
brother in law Frank Zullo’s QSM for the maintenance of the ABC Learning. A
corruption was taken place worth to $74 Million.
 c. Liquidity Shortage: Along with that, ABC Learning had transactions related to
liquidated damages with 123 Global Company. Liquidity damage is a monetary
compensation paid by a company if they ever fail to perform according to the contract or
if they breach any contract. ABC Learning initiated to buy 123 Global Company’s land,
build centers and run them and they were facing liquidity shortage.

d. Weak Strategic Planning: Proper risk analysis is important before taking any initiative
to expand the business. ABC Learning did not do any appropriate strategic planning
before expanding their branches in international dimension. In New Zealand, UK & USA
they have gone through multiple merges and acquisitions without proper research and
planning. That made them face difficult scenarios to handle their business smoothly.

e. Vague Operation: Moreover, their business operations were not transparent either. How
they operate, their cost with each center, how their performances are going with each
center these were not clear at all. They made their whole activities confused medley. This
created their business commercially vulnerable.

f. Inefficient Management & Board: ABC Learning’s board of management were not
efficient and their board of directors were corrupted. They were too excited to expand
their business but they were not capable to hold their service quality. Most of the people
had no proper expertise. They were not even capable of handling national centers’
problems let alone the internationally running branches.

Well, if we look at the issues, we can clearly notice that, ABC Learning was a weak business
organization and suffered from having a good management team specially a good HR team and
quality control team. They were busy with only expanding and they were also involved with
different internal corruptions. Mismanagement made their potential business vulnerable. If they
had a good HR team to recruit and control perfect workforce and a strong quality control team to
make sure their services, they would never see this day. To run a profitable business, a dedicated
management team is needed where corruption does not take place. Service business is
sophisticated to handle. If the service quality goes down, customers start ruining away to the
other business competitors.
3. What HR policy regime do you recommend for a viable childcare industry? Explain.

Ans: One of the developing industries across the world is childcare industry. This industry lacks
proper govt. support and regulations. Still there are many loopholes active in this industry and
this is the reason this industry often doesn’t work successfully in the long run. Many workers and
employees are not aware of their labor law rights and they often get victim by this industry. It
has become mandatory to establish a standardized compensation plan for the childcare workers
to recruit and manage the perfect workforce in this industry. To recruit the right personnel as a
childcare worker the following aspects should be in consideration:
a. The candidates should possess minimum education and knowledge in Early Childcare
and Development.
b. A number of years’ experience in Early Childcare is good.
c. Candidates should have real interest to work in this industry and create a career in the
long run
d. The age of the workers is another important issue and the parental status should also be in
the consideration.
e. Any type of health issue of the candidates and any of those issue is related to contagious
that should be in checking.
f. It will be good to recruit through reference since it most of the time assures the best
candidates.

If all these issues are maintained properly then another issue comes which is skilled based
payment. Structure. This is important not only for the childcare industry but also for any type
of industry across the world.
Skilled based payment system can be divided into two parts and they are:
a. Generalist: This payment will be applicable to all the people who will be working in this
industry in any department of any company including CEO, HR, Accountant, Marketing
and so on.
b. Specialist: The payment structure for specialists will be based on the skills, professional
experience and in-depth knowledge. Their salaries would be based on their specialty and
skill capacity.