Name: Naser Jamal Galib

1910167
Quiz-2
Submission date: 25-03-2022
1. Identify and discuss the main business features of the childcare industry [Generate a
list of competencies].
A daycare or childcare center can be a real home away from home. Children usually spend more
time there than they do at home. As a result, childcare centers and preschools must place a strong
emphasis on a new generation that will absorb this world over the next 20 years. Many countries'
futures, not just their parents', are dependent on them because they will help shape it. As a result,
parents and schools had to start working together. The beautiful things they will learn at this
period will endure a lifetime if they are treated with lots of love, care, and kindness.
Childcare is a type of social insurance that comes after production. It is currently in the early
stages of development. As a growing number of women enter the full-time workforce, the
demand for service is growing as well. There have been such significant changes in people's
socioeconomics and living styles that service is now becoming a demand in some
circumstances.To perform effectively in the childcare industry, some business requirements must
be completed in order for the organization to remain viable and conform to industry standards.
The following are examples of such requirements:

• Introducing A Brand-New Curriculum for Children of All Ages: There ought to be a

curriculum to handle the requirements of children at the childcare center. The curriculum ought
to be age-specific and look into ways in which to enhance language skills, general
knowledge, color skills, music & art skills of children from every age group. The curriculum
ought to be tailored in such a way to permit children to find out through fun.
• Service Workers Training & Development Program: It is the obligation of the service center
to provide coaching and development to their employees and service employees on a regular
basis. Employees are reminded of what is legal and what is not by regularly revising policies and
required pointers in this manner. In addition, new knowledge is shared with employees and
employees in order to provide them with insight into how to improve their current child-care
methods.
• Government Legislations & Laws: It is critical to have stringent government legislations in
order to protect yourself. Childcare should be regulated. It is a delicate business that necessitates
proper governance by the board of directors in order to avoid a detrimental influence on the
general public. There should be laws in place to prevent child abuse. In addition, every childcare
center is required by law to have a certain number of employees to children ratio. Furthermore,
the law may include specifics that meet the premise demand of the center, such as beds, play
areas and toys, dining areas, bathrooms, cleanliness, window area to let light and air in, kitchen,
children's safety and security, and so on. Service centers may fall short of their criteria if these
aspects are not adequately governed by legislation, which may have an impact on the children
who are admitted to those centers.
• Nutrition and Physical Development Guide: Childcare centers should design and follow a
nutrition and physical development guide. The guidance can assist childcare workers in adhering
to feeding and meal rules. It will also detail the fundamental key milestones that a kid of any age
group should complete in order to determine why a child may be falling behind on their
milestone target.
• Prime Location: The premise is a vital part of repairing a childcare center. The space should
be open, allowing light and air to circulate freely. There should be multiple rooms to allow for
the division of children into rooms based on their ages. There should undoubtedly be a wide
playing area or open field available. Dining and sleeping rooms should also be available and kept
clean. Low toilets for potty training infants should be considered in bathrooms for infants,
toddlers, and children. The play area should have a variety of developmental items that are safe
for little children and newborns.
• Maintenance & Environment Development: It is critical that each childcare center be
inspected on a regular basis for maintenance difficulties and that any issues be addressed as soon
as possible. In addition, childcare center administrators must explore new options for developing
and improving the atmosphere in order to make it more inviting and exciting for the children.
• Licensing: Every childcare or daycare establishment should have a license from the appropriate
government agencies. Before granting such a license, the authorities might inspect the premises
and any other physical requirements. Typically, the Department of Social Services, Department
of Health/Family Services, and the Ministry of Women and Children are engaged.
• HR Personnel to Recruit and Manage Child Care Workers: This is the most important
aspect of childcare centers. HR staff in charge of overseeing childcare employees' performance
should have a solid understanding of the company and service development so that, in addition to
their existing unit of time job, they can supervise and supervise service employees on questions
of ethics and lawfulness. To require child care, a skilled and experienced individual should be
employed. It would also be advantageous if the caregiver has a degree in early childhood
development or a related profession. Furthermore, each child employee should undergo a
thorough job analysis. Before being hired, the candidate should familiarize themselves with the
job description and requirements. As a result, job recruiting is conducted to ensure that the ideal
individual has been hired. Female caregivers are favored for younger children and newborns,
while it is not required.
• Feedback: Every childcare center should conduct a structured feedback session with the
parents of the children who attend their facilities. These meetings are designed to keep parents
informed about their children's activities, to alert them to any cause for concern due to delays in
development, and to congratulate them on their children's accomplishments. The workshops will
also focus on the parents' top priorities and any suggestions they may have. The management of
childcare institutions should give express weight to suggestions received from parents.
2. a) Critically evaluate the main reasons for ABC Learning’s collapse.
ABC Learning was a fast-growing business. It went bankrupt in late 2008 after several months of
financial difficulties that began in February 2008, mostly due to margin calls following a share
price drop from $8.80 to 54 cents in August 2008. The main cause of the company's demise was
the company's rapidly increasing debt levels as a result of acquisitions in the United States and
the United Kingdom. The following are the primary causes of ABC Learning's demise.

Opaque operation: ABC Learning's business model was poorly established, the economics of
particular sites were not adequately breezed, and site selections were not properly analyzed.
There was no organizational hierarchy, and it wasn't effectively decentralized. As a result, there
was no oversight from the supervisor for the subordinates. It is without a doubt true that the
company's accounting bookkeeping had fundamental faults and was not effectively maintained.
There appear to be considerable disparities in the company's revenues, profits, and data. There
was a significant lack of openness in ABC Learning's operations in one ward. Furthermore, their
revenue statement was incorrect in terms of profit sources. ABC Learning's net profit was
boosted by an unusual method of "liquidated damages" and reimbursement from developers of
its new facilities, which accounted for a significant portion of the company's net profit.
Furthermore, the organization lacked an organizational philosophy, values, commercial
strategies, or aim. Employees in a corporation should work together to achieve a single goal,
however this was not the case.

Poor Strategic Planning & Inorganic Expansion: ABC Learning became a highly levered
corporation due to a lack of proper risk assessments prior to rapid worldwide expansions. It is a
word used in business to describe the expansion of businesses through mergers and acquisitions,
as well as the creation of market leverage on the commodities of other businesses. ABC Learning
Centers used this method to plan their expansion initiatives. They crossed paths through several
mergers and acquisitions. Many daycares and childcare providers in New Zealand, the United
Kingdom, and the United States were taken over across international borders. As a result, the
company took on large loans, which eventually surpassed the company's ability to repay them. In
a nutshell, borrowing and equity margin were used to fund ABC Learning's expansion.

Staffing issue: ABC Learning lacked an experienced and well-trained human resource
department. They had to employ external help to complete the recruiting process, which resulted
in a significant increase in costs. They used a relief staffing company called 123 Careers, with
whom ABC Learning had also had a major issue. They owed 123 Careers $9 million and had a
$31 million compensation plan for 16000 employees, resulting in excessive turnover and a lack
of productive staff. Employees were concerned about the future of their jobs. All of the centers'
employment was unevenly dispersed, implying that the ratio of children to careers was poorly
handled. There was also part-time work, which is not in line with industry standards.
Poor risk management: The company became risky as a result of a large loan, as its leverage
was well beyond its ability to repay. Prior to the merger and purchase, there was no risk
management, which resulted in a debt growth of 1.7 billion dollars in 18 months. The
corporation did not hire a professional accountant because there was no structured accounting
process. In addition, no professional recruitment for the finance department, such as an internal
auditor, was conducted. The government's role was also critical, as there should be government
legislation against mergers and acquisitions, which the Australian government lacked.
Nepotism: Management did not prioritize talented employees; instead, the CEO of ABC
Learning engaged nepotism by including his former brother-in-law in important expenditures
since he gave maintenance and refurbishment work to his brother-in-Queensland law's
maintenance service.

Poor management: A weak, non-independent board of directors harmed ABC Learning. To

begin with, ABC Learning's CEO, Eddy Groves, had no prior experience in this field, and the
board of directors consisted entirely of politicians. Because there was no well-developed service
quality benchmark in this market, ABC Learning was handled by inexperienced management,
but management needed to have hands-on expertise. Those inexperienced executives were
unable to hire the proper people in the right positions to predict and protect the impending
catastrophe.

Human resource practices were lacking: At ABC Learning since there was no HR planning
such as job analysis, hiring and selecting the right employee, and proper training and
development. There was no performance management system in place to assess staff
performance. Employees were extremely concerned about their job security, which had a
negative influence on their productivity.
Problems with franchisees (RMCs): Franchising is not a popular option in the childcare
market, which ABC Learning did not consider when they began regional management
companies (RMCs) as franchises. To evade payroll taxes, ABC Learning employees ran close to
800 RMCs.
2. b) What are the lessons learned from ABC’s mistakes?
The abrupt demise of ABC Learning was a nightmare for the company's investors, stockholders,
creditors, and employees. Because of its deficient organizational structure and strategy, ABC
Learning Centers has gone into receivership and its shares have been suspended. ABC Learning
turned the company profitable in a short period of time. ABC Learning's meteoric rise was
remarkable for a company that had only gone public in March 2001. ABC's stock price peaked at
$8.62 in mid-December 2006, valuing the company at $3.4 billion and Groves' personal fortune
at roughly $300 million. Two years later, the true standing of ABC in the market was obvious.
ABC Learning made mistakes such as presenting a flawed financial statement, a complex
revenue flow from individual centers to the parent company, a high level of related-party
transactions involving family members, expanding business without understanding risk
management, not following any business growth strategy, and establishing unprofitable centers.
Here are some takeaways from ABC's blunders:

ABC Learning should have a suitable strategy and plan in place for increasing its business. ABC
Learning Center's business plan was difficult to decipher, which is why they failed miserably. In
this circumstance, management can be really helpful. To make those plans viable, they should
have followed a mission, vision, and strategy. A trained team with a core competency set was
critical for their firm since it helped them develop a viable business plan.
Make the proper investment: ABC Learning Centre was over-investing in intangible assets as a
result of its expansion. Their acquisitions are all predicated on recognizing the operational
childcares' licenses, and a large portion of the investment was made on goodwill. They invested
over 647.6 million Australian dollars in childcare licenses in 2006, and nearly 37.4 million
Australian dollars in goodwill. Rather than tangible assets, the balance sheet was dominated by
intangible assets. The ABC Learning Centre was eventually forced to close due to a lack of
physical assets. The amount of money a corporation can afford to invest in intangible assets is a
critical accounting issue. ABC Learning was already well-known, thus it was a huge error to
invest even more on goodwill.

Demographic Trends and Expanding Your Business: The original vision of ABC Learning,
which was to corporatize the cottage childcare business, was sound. Good demographic trends
(rising birth rates and the number of working moms) aided the industry, which was also bolstered
by considerable government subsidies that provided a stable platform for cash flow and earnings.
ABC Learning's concept of bringing together a large number of childcare centers to create
economies of scale worked well. Groves, on the other hand, was bent on acquiring as many
shopping centers as possible as rapidly as possible. Between 2001 and 2005, he conducted a
steady series of purchases, increasing the number of ABC centers from 43 to 697. The expense
of centers was unimportant; the most essential thing was to maintain developing at all costs. He
incurred a large amount of debt in order to build his firm, which he was unable to repay. ABC
Learning failed to do a thorough risk assessment, and it was estimated that about 200 Australian
centers were unprofitable. It's a lesson in not letting your lofty vision get in the way of actually
running the firm. As a result, expanding at any cost can be fatal to a business.

Hiring HR Professional: In Australia, there has been a huge increase in costs, particularly in
employment expenditures. Because it costs more, ABC never hired agencies to find people when
Groves was in charge and focused. When he went on vacation, however, rostering and
recruitment fees skyrocketed, and earnings plummeted. Hiring a trained HR expert could help
you save a lot of money.

Accounting Practices: ABC Learning Center was burdened by the obligations they had taken on
and failed to pay off, so they followed proper accounting standards. As a result, they must sell
their centers in the United Kingdom and the United States. At its height, the trade price was 8.62
Australian dollars, but by the end of the day, it had dropped to only 0.54 Australian dollars. They
were delisted from the Australian Stock Exchange (ASX). ABC's auditor, Ernst & Young, has
spent months pouring over the company's books for the past three years, seeking to figure out
how revenue and profit were calculated, specifically how compensation payments from center
developers were counted as revenue. ABC's accounting methods are also being investigated by
the Australian Securities and Investments Commission (ASIC). In the last few months, ABC has
been unable to find a buyer for all or part of the business due to the poor status of the books. As a
result, financial reports are quite important. It is something that every company should consider.
Good corporate governance practices are required. Eddy Groves, the CEO of ABC Learning,
showed unconcerned about corporate governance and engaged in a series of related-party
transactions during his tenure. In 2006, ABC paid Austock, a broking firm in which Groves had
a significant ownership, $27 million in transaction fees. ABC also paid Queensland Maintenance
Services $74 million in 2006 for rehabilitation and maintenance work on ABC centers that had
gone unnoticed. Frank Zullo, who was named as Groves' brother-in-law in property filings in
fiscal 2007, is QMS' sole director. It is the realization that for long-term business success, a firm
must have effective corporate governance processes. ABC always claimed that these transactions
were performed at arm's length, but that wasn't the point for many investors. A company's
reputation and investor trust can be harmed if it is renowned for weak corporate governance.
Understanding the Manager's Role: Eddy Groves was a force to be reckoned with, and his
devotion to his firm and the childcare profession was undeniable. Groves, on the other hand, was
overwhelmed by his desire. He diverted his gaze away from the company's management to focus
on his expansion strategy – and then grew so engrossed in the vision of a worldwide empire that
he overpaid for ABC's acquisitions in the United States and the United Kingdom. The CEO
believed he could handle everything in order to build ABC, but his lack of focus on the
company's operations led to its demise. The company may have been rescued if the CEO had
appointed the proper manager at the right time.
3. What HR policy regime do you recommend for a viable childcare industry?
Explain.
The childcare sector is not a viable business since it does not yield a big profit unless very high
rates are charged. If the occupancy isn't high enough, the business will lose money. Employee
salaries are the most significant price in the child care industry, although there are other costs
such as food, equipment, toys, administration, and grounds or premises maintenance. It is self-
evident that any organization needs a well-organized HR department with precise regulations to
oversee all operations; otherwise, they risk collapsing like ABC Learning.
HRP process: The industry will ensure that the precise number and suitable type of people are at
the right place at the right time, doing work for which they are economically most useful, by
following the HRP process, which includes forecasting, developing, and controlling, in order to
recruit staff to carry out specific and error-free tasks.
Job analysis: Interviews, surveys, and observation are examples of job analysis techniques. Job
analysis also serves as a foundation for job evaluation, which analyzes the relative value of
various occupations within the company. The remuneration package associated with each job is
determined by the relative worth of distinct jobs. The duties and abilities required for the
childcare business, as well as who would be hired for it, will be determined through a job
analysis for this industry. This industry mostly employs preschool teachers, teaching helpers, and
child care professionals. The most important task of the HR department is to do a thorough job
analysis to aid the industry in establishing the duties and responsibilities of the position, its
relative importance to other positions, the credentials required for job performance, and the
working circumstances.
Analyzing current human resources is a critical job for the HR department to guarantee that
employees' efforts are properly appreciated and that the activities they perform are more
effective. Because human resource planning will ensure that the childcare industry's future talent
and capability needs are met, allowing HR managers to anticipate and develop talents that will be
most beneficial to the company, and providing the industry with a well-balanced workforce in
terms of skill set and individuals.
Employee utilization can be reviewed by providing orientation and appropriate information to
inform employees of their duties and responsibilities, as well as keeping them informed about
current issues in the office's internal and external environments. This will ensure that the tasks
assigned to them are completed flawlessly.
Job description: Job descriptions are an important part of both pay and selection systems
because they spell out the responsibilities, requirements, functions, duties, location, atmosphere,
and other features of a job in writing. It can be really fulfilling to assist youngsters in their
development, learning, and acquisition of new abilities. Work should be routine at times, but
each day should provide new tasks and challenges. Child care professionals must continually
stand, walk, bend, kneel, and lift to attend to each child's interests and issues, which can be
physically and emotionally demanding. Anticipate and avert problems, efficiently deal with
obnoxious youngsters, and administer fair yet firm discipline. Child day care professionals work
a variety of hours. Many centers are open for 12 hours or more a day, and they are unable to
close until all of the children have been picked up by their parents or guardians. So vivacious and
composed. It's possible that there will be unscheduled overtime. Employees must remain on the
premises until all of the children's parents arrive to collect their children.
Job Specification: A work specification is divided into two parts, the first of which deals with
the numerous characteristics and responsibilities of the job, and the second of which deals with
the traits and skills required of the job performance. Staffing requirements for child care
institutions should be established by the government. Although criteria may vary, in most
situations, teachers should be at least 18 years old, and directors or officers should be at least 21
years old. Assistants can start working at the age of 16 in some regions, and at the age of 14 in
others. A high school graduation is required, as well as, in many circumstances, a mix of college
education and experience. A high school diploma may be required for assistants and child care
professionals. A childcare business should hire personnel who have acquired qualifications from
a nationally recognized child day care organization if it is necessary.
Recruiting & Selection: A clear personnel policy should be in place for the recruitment and
selection process. Because the childcare sector is so specialized, HR managers should select
people with experience in accounting, financial, legal, and management. Before making a final
decision on an employee, HR managers should examine the employee's references, because
parents will never entrust their child to a criminal or a bad person. There should be no nepotism
in the workplace, such as at ABC Learning. The board of directors and the CEO should both be
made up of experienced and qualified individuals. To efficiently complete all tasks, the industry
must follow appropriate staffing norms. The proper number and type of people at the right place
at the right time doing work that is economically most favorable to the precise demands
mentioned are needed to entice workers to carry out specified and error-free tasks. Furthermore,
with proper employee recruitment, the childcare business will not only be able to find the right
person for the right job, but will also be able to perform their jobs quickly.
The childcare industry is a delicate one that necessitates regular monitoring and speculating. The
danger is also very high. So risk management is a terrific HR activity to look into, because risk
management is crucial for building an industry and avoiding any unanticipated conditions.
Training and development: In order to carry out the operations, employees must be properly
trained and developed. It is unavoidable to give training and development programs based on
employee competency in order to successfully address competency gaps and meet company
objectives, and the HR unit must provide this for the workers.
Compensation refers to the sum of all awards given to employees in exchange for their services.
Employees earn compensation in consideration for their contributions to the company. It is a
method of offering monetary compensation to employees in exchange for their efforts.
Compensation policy is developed from the organization's overall human resource management
strategy and policy. In order for compensation management to be effective, the business must
clearly define its compensation policy, which must contain the foundation for establishing basic
compensation, incentives and benefits, as well as various forms of perquisites to different levels
of employees. The policy should be aligned with the organization's human resources and strategy
philosophy. The childcare industry is not profitable since it does not generate big profits unless
very high prices are charged. The occupancy rate must be high enough to create a profit for the
organization. Staff pay are the most significant price in the childcare industry, but there are other
costs for food, equipment, toys, administration, and grounds or premises maintenance. So, before
entering this industry, all of the aforementioned factors must be taken into account.
The compensation policy regime advocated for a viable daycare business is as follows.
Compensation Management Process: It entails analyzing and evaluating the organization's
compensation policy and strategy. Design and implementation of compensation plan evaluation
and review based on contingent factors analysis.
Organizational Strategy: While not a phase in compensation management, the overall strategy
of the organization is the beginning point in the complete human resource management process,
which includes compensation management. Companies that operate in various sorts of
markets/products with differing levels of maturity use a variety of tactics and compensation
plans, as well as a combination of different pay methods.
HR department that is efficient and well-organized: HR is a critical component of any
corporation. As a result, there should be some employment openings in the human resource
department for the child care industry. Employees were highly concerned about their job security
in the instance of ABC learning, and discontent with benefits, wages, and difficult working
circumstances caused many to leave the business. A HR department can play an important role in
maintaining employee motivation by ensuring that their productivity is not jeopardized. HR can
also assist management in making sound decisions when appropriate.
Evaluation and Review: A compensation plan is not rigid and fixed, but rather dynamic,
because it is influenced by a range of dynamic elements. As a result, the compensation plan
should be evaluated and reviewed by compensation management. After the plan is implemented,
it will produce results in terms of intervening factors such as employee satisfaction and morale,
as well as end-result variables such as increased production. This latter variable, however, is
more significant. In this view, the compensation plan must be evaluated. If it does not work as
expected, the plan should be reviewed and a new approach taken.

The demise of ABC Learning was caused by a variety of factors, including severe debt and
financial difficulties. The government's role was also crucial, as was the inexperienced CEO, the
unprofessional Board of Directors, management's erroneous decisions at every turn, an
uneducated and inept human resource department, and so on. The objective for ABC learning
was ideal, but the method for accomplishing it was flawed, resulting in the organization's demise.
So, before entering a highly specialized service industry such as daycare, every organization
should analyze all of the above factors and hire each and every person in each department based
on industry standards. Forecasting must be done by highly specialized personnel in order for
operations to run smoothly and efficiently. The funding must be backed by their predicted
revenue in order for them to be able to pay off their loan and avoid falling victim to bank
deception.