Australasian Universities Risk and

Insurance Management Society

The Client/Customer Relationship;Some Risks for the University

As Service Provider

Dr John Toohey

Why this paper?

Education (knowledge) is a valuable commodity - individually and corporately

Universities are increasingly “service providers”

“Customer”/“Client” relationships are being tested

Universities are not prepared for clients Risks / exposures (opportunities) are real

What is happing out there? Globalisation

- companies / universities (U21, Global Allia.) Technologically-mediated Delivery

- flexibility and capability (time and place) Knowledge Management / Commodity

- from “muscle” to “brain” - protection of IP Socio-political Issues

- education - rights? duties? who pays?

Customer or Client?

Customer Relationship -

essentially an economic exchange/transaction, in which goods or service are exchanged for money e.g. buying a car

the relationship is by its nature ephemeral and usually a singular event

Customer or Client?

Client Relationship - a more open ended quest for service that

meets a less specified need e.g. education, health

relies on high levels of expert qualification e.g. doctor, teacher

more indeterminate relationship e.g. may go on for some time

outcome usually relies on high levels of trust and reciprocity between the parties

Universities have Student/Clients teaching - learning relationship(s) reciprocal roles and responsibilities high order expertise certification process trust relationship time independent (alumnus)

Universities have Other ClientsIn areas of ... research and development commercialisation of knowledge business incubation joint ventures “global” associations adjunct appointments

The University now

public or private responsibility (social policy)

growth of fee-paying programs (mainly graduate level)

partnering with like tertiary institutions community service standards conservative student body greater competition for resources necessity to partner with “industry”

What risks arise?

INTERNAL inability to understand the service provider role and incapacity to develop internal expertise to deliver within a changing environment

EXTERNALinability to develop and deliver educational services commensurate with marketing assertions

Risks and Consequences

- poor student management- inadequate teaching- inferior support (counselling etc.)- limited resources (library, computer labs. counselling)- poor quality learning materials

Risks and Consequences

RESULTING IN …- loss of market share- weakening of brand- loss of industry / business support- poor public image- political vulnerability- possible litigation

New Education Models

Interaction

ContentSystemSupport

Drives the teaching and learning process

Study guides, text books,CD ROM’s, online materials,library support

Admin and communication systems, content preparation and delivery,assignment management,etc etc

“Educational Negligence”

“Educational negligence occurs when a student suffers harm as a result of incompetent or negligent teaching”.

Ian RamsayUNSW Law Journal, Vol. 11, p.184.

“Educational Negligence” - CasesOpen University, UK“.. complained about the quality of his course

and received damages to cover the majority of his tuition fee..” Guardian, 15 Sep 98, Higher Ed.

J.Gill (Lawyer specialising in education), UK “Students are increasingly taking legal action when the teaching or other facilities offered by universities … fails to meet expectations”

“Educational Negligence” - CasesUS - “Due Process”“.. issues litigated include research

integrity, civil rights, student behaviours...” The National Law Journal, v14, n40,1992.

UK - Student Under-performance“ .. pursuit of damages for a pupil’s

academic under-performance…” Liverpool Law Review, v20, n1, 1998.

“Educational Negligence” - CasesAustralia - “university activities as

products”“.. perception that activities of a university

should be seen as products .. legal protection should be afforded to consumers..” Queensland

University of Technology Law Journal (12), 1996.

NZ - Accountability for teaching standards“ .. statutes, duties and powers of school

boards” New Zealand Law Journal, September 1997.

“Educational Negligence” - CasesAustralia / Canada -Liability for pure economic loss

“.. category of claims for negligent misrepresentation .. negligent supply of goods, negligent performance of a service …”University of Western Australia Law Review, 28, (1),

1999.

External Scrutiny

SENATE INQUIRY - “… the operations and effect of universities’ commercialised research and development structures ...- public liability consequences of private, commercial activities of universities...”

Senate Employment, Workplace Relations, Small Business and Education Reference Committee, October 2000

External Scrutiny

“.. stiff competition also creates incentives for unethical traders to cut corners to beat their rivals … the incentive to cheat will always be too much for some businesses ..”

Professor Allan Fels, The Impact on competition policy an

law on higher education in Australia, 24 November 1998.

Solutions?

“Quality Strategy”(centralised but across whole institution)

- marketing (offerings match hype?)- appropriate offer (e;g. language, capacity for

non-graduates)- student servicing (right people & right job)- “pastoral care”

Solutions? (continued)

“Quality Strategy”

- internal coordination (central vs.faculty) - systems support (systems & finance)- pricing policy - brand leverage responsibilities- staff roles and development (academic and “general”)

Solutions? (continued)

RISK MANAGEMENT

- identification- assessment- control