Academic journal article Academy of Educational Leadership Journal

Application of Ipa on Business Risk Management for Preschools: Risk Identification and Ranking

Academic journal article Academy of Educational Leadership Journal

Application of Ipa on Business Risk Management for Preschools: Risk Identification and Ranking

Article excerpt


Starting from 2000, the fertility rate among young couples in Taiwan has declined drastically from 13.76% to 11.65%, and the number of neonates is 292724 in 2000 and 196873 in 2016 (Department of Statistics, Ministry of Education, 2017). As a result of the rapid decrease in the number of young children, preschools have been forced into operational difficulties (Chen, 2016; Cheng & Chen, 2013). Thus, many preschools want to increase their competitiveness by changing their business strategies (Duan & Ma, 2013; Huang, 2008; Tsai, 2007), but worry such changes might lead instead to business risks. What kind of risks might arise if new strategies are implemented, how these risks might affect the business of the preschool and what might preschools do to manage these risks are important issues for preschool operators. It is therefore intended that the results of this study could provide knowledge of the business risks faced by early childhood education institutions to educational researchers in other countries, together with methods to manage these risks. Given that such studies in the educational field were relatively few in the past although Chen (2016) has developed some index to measure the managerial risks for preschools by Delphi Technique, it is hoped that this study could generate some results concerning this issue. The research findings could make it possible for researchers around the world to understand the business risks of preschools in Taiwan, and lead to appropriate suggestions on how these risks could be managed. They could also serve as reference for preschool operators from other countries, and help those early childhood education institutions facing the same problems enhance their operational benefits.

This study conducted quantitative data analysis on the basis of a questionnaire, which was developed by combining studies regarding business risks in the business world (Barki et al., 2001; Lai, Lau, 2012; Longstaff et al., 2000; Rice, 2010; Ting et al., 2009. & Yiannaki, 2012) and those concerning the operational practices of preschools (Chen, 2016; Duan & Ma, 2013; Huang, 2008; Tsai, 2007 & Zhu, 2013), with the aim to measure the risk items of preschools. Moreover, by referring to the positioning and ranking method (Lai & Lau, 2012), as specified in the risk management model RFRM (risk filtering, ranking, and management model), the risk values were calculated by multiplying the likelihood of a hazard being realized by the severity of its consequences in order to gain an understanding of the extent of the organizational risks faced in the current operational strategies (Lai & Lau, 2012). Finally, in combination with the IPA method (Importance-performance Analysis), the risks were analyzed and differentiated as "a risk to be mitigated", "a risk to be shifted", "a risk to be avoided", and "a risk to be accepted", which are intended to be references for preschool operators in terms of risk management. Given the above, the specific research purposes of this study could be described, as follows:

(1) Investigate the possible business risks faced by preschool operators in Taiwan during the implementation of new strategies, including the risk items, likelihood of a hazard being realized, and the severity of the consequences of the hazard being realized.

(2) Analyze the management directions of the business risks for preschools in Taiwan, including investigation of the characteristics of different risks (high risk, significant risk, and acceptable risk), and the management of these different risks (to be mitigated, to be shifted, to be avoided, or to be accepted), thus, constructing referable paths for the management of business risks in preschools.


The researcher collects the studies of business risk management and finds that three theoretical models are applied to be the basis of model construction in many studies. …

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