business

ABC Learning: The Parents’ Dilemma

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Here in Australia, the big parental news (well, amongst parents of the under-5 set it’s a big topic, and amongst singletons and non-parentals it’s kind of a non-issue) is the failure of ABC Learning.  A failure that comes despite guaranteed cashflow, subisidised products, high demand for services, and captive guilt-ridden parents.  We have a 3 year old at one centre, so we know all about it!

Clearly Eddie Groves over-extended the company, and it’s become increasingly apparent that a business that seems too good to be true, with poor governance models, from a person whom you probably wouldn’t trust as far as you could throw him (‘Fast Eddie’ never gave a vibe as being the brightest candle in the candelabra), usually is too good to be true.  It’s since emerged that the mounting profits were built upon structured relationships, dodgy accounting, and a very poor relationship with the truth.  Apparently the company was valued at over 3 billion dollars, but 1.3 billion of that was intangible assets – most of which it seems related to the ABC brand, which is now more like the kiss of death than anything of value.

20-20 hindsight is a wonderful thing, and it seems the writing has been on the wall for some time.  Nevertheless, it still came as a shock to parents who naively believed what they were told:

  • It started out that the media was just being mean to ABC Learning.
  • Then it became that ABC Learning was renegotiating with the banks and it would all be OK.
  • Then it became that the receivers/managers had been called in, but it would all be OK and no centres would close.
  • Then it came out that 40% of the centres were currently unprofitable.
  • Then it came out that 40% were actually unviable and would be closed.

And then last Thursday we had TV cameras outside our centre.  Not a situation to make working parents feel relaxed and comfortable. 

As a result of all this uncertainty, parents seem to be taking their kids out in droves now.  And staff have also got the message and lots have left.  It has become a version of the prisoners’ dilemma.  If all the parents stay, it’s unlikely that the centres will close.  However, if you stay with the centres, you will discover that there are no places left when the centre does collapse, because all the other parents took those places.

It is a real pain and a worry, and at the least it’s clearly a distraction for staff.  Our centre held a ‘positive pink’ day today, asking the kids to come in pink shirts to support the staff – and fair enough too, given that the staff aren’t the ones with over-ambitious ideas and a completely fatuous understanding of business and business ethics (hint:  the ones with this would seem to include Eddie Groves, Le Neve Groves and indeed the erstwhile chairman, Sallyanne Atkinson).  In particular, if Eddie Groves were to spend the rest of his life clutching a wine bottle and drooling into the gutter, I would only think uncharitable thoughts. 

But Eddie is not the staff.

Today when I collected my child from the centre one parent was fixing to have a barney with the director over a lost water bottle.  Admittedly such things are frustrating, particularly when they’re labelled and clearly belong to the child in question – but the director has had to battle staff shortages, parents withdrawing their kids, a bankrupt company, the receivers today and, to top it all off, a nice bout of gastro.  For all I know, the staff decided to play soccer with the drink bottle by tying it to a rope and into traffic, and then sending the child to go get it.  I am assuming that doesn’t happen, but of course sometimes I’m sure it’s a tempting idea :).

The receivers/managers, and the government, had better make sure there’s a clear path soon with these centres, or there’ll be worse to come for parents.  If they’re going to be sold off, the sooner the better, I think, and get any rejigging over and done with as soon as possible.  I for one won’t miss the jolly pink teddy bear threatening us all as we come into the carpark.  I know that we as parents are getting a little tired of being lied to as to how things are going – we’ve got a couple more years of association with the centre and I don’t know where it’s going to go.  We’ve been loyal, we’re staying loyal (to the staff), but eventually loyalty and $3 will buy you a cup of coffee, particularly if your child is out on the street. 

The parents’ dilemma will become increasingly real for many parents over the next little while, and they had better get their act together soon. 

Accounting for the Emission Trading Scheme

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As part of the good old PhD, I’m looking at some of the impacts of reporting changes around the adoption of IFRS in Australia upon audits.  As part of this, I’m taking a look at accounting for the Emissions Trading Scheme – mostly because it’s interesting and topical.

The Australian Government has flagged an intention to create an emissions trading scheme, but has rather less-than-helpfully (in some ways) left the creation of accounting for its business impact to the International Accounting Standards Board.  According to the IASB work program, an exposure draft regarding accounting for emissions trading scheme will be provided in the second half of 2009, and IFRS standards will be released in 2010.  Alternative accounting models are to be brought to IASB in Q3 2008 (presumably, about now).

Rather less than conveniently, if IASB’s work program doesn’t slip, the new accounting standards will be released about the time the emissions trading scheme is implemented.  Hmmm.

The project overview is provided here for IASB: emissions trading scheme.

However, the above seems to relate to how to account for the dollar impact of the scheme (presumably, accounting for assets and expenses created by the scheme etc).  There is in addition a current reporting obligation under the National Greenhouse and Energy Reporting Act 2007.  This is of course NOT the ETS, but it does give us some things to do right now.  A copy of the guidelines for reporting obligations can be found on the government’s website.

By 2010, organisations that produce more than 50 kilotonnes of CO2 and/or use 200 terajoules of energy are subject to these requirements.  There is an enormous scope of the non-accounting information that is required just in order to determine whether or not the corporation exceeds the threshold (see also this link:  https://www.oscar.gov.au/Deh.Oscar.Extension.Web/Content/NgerThresholdCalculator/Default.aspx).

These reporting requirements appear to apply to at least government agencies, although it is uncertain whether State Departments (e.g. Queensland Health) are captured by these requirements.  The advice for government agencies is that they should set up their systems to make this apply, and likely it will be made apply in any event due to the need for them to maintain a reputation.

A lot to absorb.  By the way this blog is starting to creak under its own weight and desperately needs a redesign – I will redesign the categories and so on when I get a chance (so perhaps this is permanent).

Can employers tell us what we can do in our private, online social networking, lives?

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If your employer tells you to ‘stop doing that, you’ll go blind’ online, do you have to stop doing it? 

Short answer:  yes, with a but. 

As I specialise in long answers though – see below.  Caveat – I’m not a lawyer.  This probably misses a ton of stuff cos I’ve shortened it from the original, much longer, draft.  This is just for discussion, comment, and thought provocation at the moment.  It also has far too many Battlestar Galactica references. 

At law it is generally well recognised that employees have several duties of care that they owe to their employer . There are three core duties of an employee to their employer that have a clear link to an employee’s online social networking activities:

  • to work with care and diligence,
  • to obey all lawful and reasonable orders, and
  • to act with good faith and fidelity.

There are essentially two types of employee: a standard employee (on a time-service contract) and a professional or staff employee (on a task-performance contract) . Professional and staff employees, and especially those employees with client-facing roles, are generally held to a higher standard, particularly where their actions may tarnish the employer’s image.

The employee has a positive duty to be efficient, and to avoid negligence in carrying out the work. In the context of online social networking, an employee might breach this duty where their use of such tools affected their efficiency (for example, through cyberslacking) or using a social networking tool in an inappropriate way (for example, to store client material or to carry on client conversations).

An employee must also obey the ‘lawful and reasonable’ orders of their employer, taking all reasonable steps to carry out the tasks promised under the contract of employment. Criminal acts outside of the workplace may prevent the employee from carrying out their duties, and thus breach this duty. So if you joined an illegal OSN, or advocated criminal behaviour in an OSN (use your imagination but it probably involves terrorism, nazis, or pavlova) it might be difficult to keep doing your fracking job (sorry – Battlestar Galactica reference).

It is likely though that the activity would need to be very much at odds with the employee’s role for summary dismissal or discipline to be justified.

Employees do have a duty to act with good faith and fidelity (see especially Blyth Chemicals Ltd v Bushnell 1933 ). Employees must not act in a manner that is in conflict with the interests of their employer.

As part of this duty of good faith and fidelity, the employee must not disclose information where disclosure of such private information (for example, profits and losses, customers, methods and techniques, etc) might help a competitor. It is likely, for instance, that posting a blog topic about business strategy, or the file notes from an internal meeting, would breach the duty. The duty operates to limit the employee’s ability to comment upon the business of the employer.

I was flabbergasted to find though that in the Cockatoo Docks Case (1946) it was found that an employer was justified in summarily dismissing an employee who wrote an article in a Labor Party newspaper that was critical of his employer. Try that one on today! Although it is not likely that this decision would be followed today, there are clear parallels to be drawn with online social networking activities.

The biggest issue for bloggers and Facebookers everywhere? Tarnishing corporate image.

For this duty to be beached there generally needs to be a relevant link with the employer such as a uniform. In Rose v Telstra Corporation 1998 it was acknowledged that employers ‘do not have an unfettered right to sit in judgment on the out of work behaviour of their employees. An employee is entitled to a private life.’

In the context of online social networking, presumably this connection would exist where the employee discloses the name of their current employer, or where the individual is in a senior client-facing role so as to be likely to be identified from their profile by a customer or prospective customer.

Some employers use things such as AWA’s etc to prevent, for example, a mining company employer stopping an employee joining a group that is protesting the mining company’s actions.

As a general principle, employers seeking to rely upon this power of control must set out their expectations very clearly, and ensure that the employee has consented to such contractual terms and that the expectations have been brought to the employee’s notice. In particular, the duty that an employee owes to act in good faith and with fidelity operates so that the employee should not ‘tarnish the business’s image’. The business’s expectations of its employees however must be very clear if the employer seeks to control their employees’ actions in private.

Personally I’m coming to the view that if it’s your private blog or Facebook, keep your employer’s name out of it – it’ll be sweeter for all that way.

Image from Flickr User Akbar Simonse.  Some Rights Reserved.

Friendly business

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The business of accounting is business. Nobody said that, but it’s true nonetheless. Accounting is a profession that is definitely not about counting beans and wearing cardigans these days. CPA Australia members are core parts of every aspect of Australian business life, and so it is unsurprising that they are often among the first to identify new business issues as they arise and they are the ones given to advises for business improvement. For example, an issue noted recently is the potential impact that online social networking has upon business, and if you work from home in your business, you will need to learn how to take home pay for this. These websites allow friends to chat, share photographs, videos, and to discuss their work, lives, loves, wins and losses. At last count, there were more than six million Australians with profiles on Facebook and MySpace.

It is hardly a business issue that Australians have friends. Mateship is an Australian tradition, whether on the Kokoda track or on Facebook. The issue is that, as our world becomes more connected, it is increasingly difficult to separate personal lives from the world of ‘work’. Private actions now take place in very public places, with search engines voyeuristically distributing these activities for the entire world to see. Consider the recent YouTube ‘star’ who made negative comments about his employer. Once, those excruciating videos would have tormented only his unfortunate immediate family. YouTube provides the conduit to a whole new audience. Questionable tastes in humour cross organisational hierarchies though. There may be regrets for the partner of a consulting firm whose photo was posted online by a member of his staff, complete with Hitler moustache, swastika, and a Nazi salute. Not perhaps the look his professional profile is looking for.

Business owners must cross the generational and digital divide to become digital citizens so as not to be caught unawares, like the new owner of a motor dealership who was unaware of a web comment telling prospective customers to ‘avoid [the dealership] like the plague’. Three years on, that advice is still there and is prominently displayed when new customers Google the dealership. Twitter, a relatively new social networking service, allows users to post ‘microblogs’ from their mobile phone. Comments damaging a business’s online reputation are regularly made there – at one store, while still in the store, a customer ‘tweeted’ to her 789 ‘followers’ about the bad service received.

It is not all negative. Delight the digital citizens and your business will benefit. Robert Scoble, a particularly notorious blogger, mentioned a new book he was reading in a single tweet. With over 34,000 followers, it seems people took note, and the book quickly scaled the heights of the Amazon best seller list.

A generation has matured with the internet at their fingertips. This is a different world than the old world of football, kangaroos, meat pies and Holden cars. Your customers use the internet to inform their opinions. A business can take some steps to present itself in the best light possible, but actively manipulating information is unwise. The punishment for chicanery and ‘bad behaviour’ online is unpleasant, caustic and swift. Transparency and honesty are necessary in the digital world. The actions of an over-zealous employee can quickly ensure that a business is condemned to the scrapheap of irrelevance – consider the very public example of the software developer 2Clix who brought legal action against Whirlpool to have negative comments taken down from its forums.

Increasingly, ‘personal’ and ‘work’ lives collide. People need to be a little more circumspect when posting material online. Activities are often publicly available and can be seen by anyone – an audience perhaps not originally considered. Recruiters increasingly Google a candidate’s name to see what can be discovered. Personal information can be used for identity theft, and likewise corporate information on personal profiles can be used for ‘social engineering’ scams to defraud the business.

Is this an accounting issue? Probably not. Is it a business issue? Definitely, and accountants fundamentally are about business. The CPA Congress in Melbourne this year includes a workshop to help people understand how they can use online social networking tools without causing great grief, and how a business can respond to the business challenge of online social networking in a positive way. This workshop will be particularly beneficial for businesses seeking guidance in navigating the digital landscape effectively. Experienced accountants, like those at the Professional Corporate Services In Australia, can offer valuable insights and strategies to optimize online presence and mitigate risks. For those few people that are natural digital denizens, the workshop will discuss tactics they already know. For others, there will be hints and tips that will save them time, money, and a poor online reputation.

The social networking phenomenon is here to stay and will continue to grow. Businesses must understand the impact of social networking upon the business, and monitor their ‘internet footprint’. Individuals must understand acceptable behaviour when living out their digital life. Simply ‘banning’ or ‘ignoring’ online social networking is rarely helpful. A sensible and informed approach is important, with an awareness of the potential risks and problems. For tailored guidance on managing financial challenges, consulting with an Insolvency Practitioner Bedfordshire can provide valuable insights and support.

Social networking: sometimes, it’s about business.

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Answering assignments at a University Undergraduate level

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Anyone who has been following my twitter lately will have come to the realisation that one of the things I have been doing for fun and profit lately is lecturing in IT Governance at Queensland University of Technology.

I have to say, as for the fun and profit side of things, I don’t think I can recommend it as a hobby for anyone J. Although you probably already knew that.

I have just finished marking the assignments, and what has struck me is the apparent difficulty that exists for students answering an assignment, so I thought I’d do a bit of a pointer overview for anyone who ever intends to submit an assignment to me in the future. With any luck, I’ll expand this blog post into something more by the time I get to lecture again in the subject next year.

Honestly, I think I will spend an hour in one lecture just going through this overview so that assignments (and by extension, exams) are answered well.

The following pointers are relevant as far as I am concerned if you are ever intending to provide an assignment that gets an above-average to good grade. If you follow these pointers you should at least pass the subject.

Listen to the lecturer

The lecturer wants you to do well. Certainly, I at least know that I’d rather mark good assignments than bad ones. So, attend lectures and listen when subtle (and not so subtle) hints are made regarding the assignment.

Phrases like ‘be sure to read the question’, and ‘only answer the question’ come to mind. Other magic phrases come to mind like ‘This would make a good assignment question’, and ‘Be sure to know what a <insert special word here> is’.

And turn up to lectures and asking questions is a sure way to get an insight into what the lecturer is on about. Not everything can be in the Powerpoint.

Know the marking scheme

Understand the marking scheme, and write so that you address it. For instance, with this most recent assignment, 40% of the total marks were for knowledge, 40% were for analysis, and 20% were for research and communication.

So every answer you give has to address this marking criteria.

Just so you know, Googling and copy-and-paste don’t count much as knowledge unless you’re taking a cut-and-paste class. To me, to demonstrate knowledge you have to provide some facts that answer the question, certainly, but it needs to be your own words (and back it up with research where you need to).

To demonstrate your powers of analysis, you have to answer the question ‘why’? It isn’t good enough to say, ‘do X’, or ‘this applies’ – answer the question why do it, or why does it apply? If your answer doesn’t demonstrate at least some reasoning, you’re going to be missing out on the question. This applies unless the question explicitly states you don’t need to follow the marking scheme for that question.

To demonstrate research and communication, you would firstly be expected to show that you have done some independent research. At an undergraduate level, this probably doesn’t need to be a lot, and in fact it is probably going to be ‘bad’ research. But with things like Proquest around these days there’s really no excuse not to find an article somewhere that demonstrates your point of view. Secondly, you need to write your answer in language that is grammatically acceptable. I know this is tough if English isn’t your first language, but it seems to be tough for non-native speakers as well. To me, to get the answer right, your answers need to be grammatically correct (at an undergraduate level, by grammatically correct I mean tense that is consistent, sentences that are full sentences with a subject, verb, noun, clauses, full stops – that sort of thing).

To me, given the state of the world today you don’t really need to worry too much about using active or passive voice, or even writing great prose (and to be honest, great prose is probably a communication hindrance). Good spelling is a must, but I personally wouldn’t start to ping you until I’d seen a couple of spelling errors every two or three hundred words. Beyond two it’s getting far too sloppy. Think about it – a 5-page report will be about 1,250 words – one typo every 100 words is 13 or so typos in that single assignment. I can live with that, but I can’t give you top marks.

Recall too that paragraphs are your friends, as are dot point lists. If it’s a full assignment, I suspect most lecturers won’t accept dot point answers, but if a dot point list answers the question clearly and easily, use a dot point list after an an introductory paragraph to get the facts out, and then put your analysis in paragraphs.

Format and technical issues

If you have a word limit, stick to it (at least within coo-ee of the word limit, please – more than 10% over the limit is probably going to be a problem for you, not me). To make your case about how you stuck to the word limit, I’d put the word count at the beginning of the assignment, smack dab on the front page.

Have a cover page, headers and footers, and, if your assignment has an appendix, a table of contents is appropriate as well. It will depend on the marking scheme as to whether this affects your mark, but in professional life as well as academic life the ‘duck theory’ applies: if it looks like a duck, walks like a duck, and sounds like a duck, it’s a duck. Make sure the assignment looks the part.

Be sure to give the assignment a good re-read prior to submission to check for spelling errors, word usage, and complete sentences. This means finishing the assignment 48 hours beforehand, letting it sit, and then re-reading it so you’re not so close to the assignment.

Oh, and make sure that little things like page order are done properly, and don’t forget to add your appendices in!

Read the Question

You need to be sure that your answer is actually answering the question that has been asked. This is particularly important when you have a restrictive word limit. Don’t spend a great deal of time defining a term when the question did not ask you to. This can demonstrate knowledge, but will never address analysis and evaluation capabilities, particularly when the definition is virtually copied and pasted.

Be careful that you don’t give the right answer for the wrong question. You can give a good answer, but if it does not answer the question actually asked you will do poorly.

Be certain that your answer addresses the requirements of the question. In answering a question, focus on the verbs that request you, as the student, to do something. Consider the following question:

1. Outline the importance of IT governance to Australian business organisations by accessing current IT governance research. Assess the overall IT governance of Mudflat Plains City Council and provide recommendations regarding steps the organisation could take to improve its IT governance processes.

To do well, the answer had to use words like ‘IT Governance is important because <insert reason>’. Research should be cited too in making this answer (given that the question asked you to do this by ‘accessing current IT Governance research’).

An assessment needed to be provided of IT Governance (e.g. ‘In my assessment IT Governance at MPCC is level 2 in accordance with the maturity model because <list some reasons why>’. Finally the answer needed to provide reasonable steps that could be taken to improve MPCC’s IT Governance processes.

Defining IT Governance is vaguely useful to the answer, but not much, and is not worth spending a great deal of time on as it is not requested in the answer.

I really hope that this helps some students with preparing an assignment at a University level.  I can see that next year I am going to devote a chunk of time to preparing an assignment.