Corporate Admin (MAICSA PAPER September 2017)

September Examination 2017 Past Year Question

Q1. When he was a child, Robert was stricken with polio that left him walking with a limp. Robert has always felt that he was a able and normal as the next guy. Despite his disability, he managed to move around with much ease with his other strong leg and he did well in his studies. His mother, a single parent, bought him a small (a Myvi), which was specially modified with hand-held gear when he obtained his driving licence (Disabled Person's driving licence-'OKU' licence). Robert has recently graduated from university with a first class honors accounting degree. With much enthusiasm, he applied to a reputable audit firm for an audit assistant position.

The audit firm's Human Resource manager, Mrs. Wong called Robert to an interview and requested him to fill up a job application form and write an essay on the topic: "Current Audit Practices in Malaysia". At the interview, there were two other candidates besides Robert. The other two candidates were able bodied but with second lower and third class honors accounting degrees respectively from the same university as Robert. The Head of the Audit Section of the firm, Mr. Chan and Mrs. Wong, conducted the interview with Robert. The interview started with Mrs. Wong asking Robert on his background and accounting qualification. During the interview, Mr. Chan explained that the job requires Robert to travel around to audit clients. Robert clarified that he has no problem in moving around as he posses his own car and has a driving licence albeit an 'OKU' licence. Robert also said that his mother who was not well and currently unemployed and therefore, he had a family financial commitment.

Two weeks after the interview, Robert received a letter from Mrs. Wong stating that his application has been rejected. Robert could not but felt that he has been discriminated against since he was a disabled person.

Required:
(i) Identify and evaluate the selection tools used by the audit firm   (12 marks)
(ii) Has discrimination taken place as alleged by Robert in this case? Justify your answer.  (6 marks)


Suggested Answer:

(i) The selection tools use:
       1. The normal selection procedure is for candidate to fill up an application form.

• The job application form has a standard format which requires the same information from all the job applicants. 
• In the job application form, the basic information such as personal details, health conditions including any disablilty, are requested. 
• The advantage of using such a form is to provide a basis for comparison of the applicants. 
• The disadvantage of using such application forms in that the information collected is insufficient to make a definitive selection decision, hence the interview and other selection tools.

       2. In the above case, in addition to the application form, an essay question was given.

• Robert and the other candidates were requested to write an essay. The topic given could differ but around the same topic area of Auditing practices.
• Tests are conducted as part of the selection process so as to increase the interviewer's objectivity. 
• The advantage of using test like essay writing is to enable a more efficient test for the interviewers to obtain information, not available in the other selection tools. 
• The essay topic is on the related areas of auditing practices and thus, to a certain extent, gives some indications on the job-related skills of the applicants. 
• However, the problem of using test alone is not enough to make a sufficient evaluation of an applicant. The Audit firm needs to use tests in addition to other selection tools. 

       3. Mr. Chan and Mrs. Wong formed an interview panel.

• Employment interview is a goal-oriented conversation in which the interviewers and the interviewee (the applicant) interact and exchange information. 
• The advantage of using an interview is that additional information can be gathered at the interview to make the selection decision. 
• The additional information may include the applicant's character, attitude, communications skills etc. 
• The disadvantage of using an interview may be the asking of an inappropriate question which may offend the applicant. 
• Premature judgment of the applicant may also occur due to personality clashes, differing personal opinions etc. 

(ii) Has discrimination taken place against Robert?

• The interview started with Mrs. Wong, the Human Resource manger, asking questions relation to Robert's background and qualification. 
• If the interviewers (Mr. Chan and Mrs. Wong) has asked Robert question based on certain characteristics such as sex, race, ethnic origins and those not related to the job applied for, then discrimination may have taken place in the interview. 
• Form the above case, it  may be said that the question posed was relevant and related to the job requirement to move around to the client's place, which Robert explained that he does not have any difficulty (he has his own car with valid driving licence).
• The other two applicants also went through the same process and were subjected to the essay tests. 
• The other two applicants were also fresh graduates like Robert. 
• The above selection tools used application forms, interviews and essay tests are appropriate for the job type (Audit assistant) applied for.
• It can be seen that from the above, the Audit firm rejected Robert's job application on the basis that he was not considered to be the most suitable candidate for the position applied for. 
• A possible reason why Robert's application was rejected could be due to his need to take of care of his mother who was not well
• Base on the above, there was no discrimination against Robert for the audit assistant position applied for. 

Q2.  Train firms urged to invest in safety campaigns. 

PETALING JAYA: Educating passengers about railway safety and maintaining facilities at surrounding areas should be given top priority to prevent accidents near railway tracks, said Public Transport Users Association president Ajit Johl.

He said train operators and the authorities should be responsible in maintaining and upgrading operational safety facilities at stations.

“Train operators should invest in safety campaigns and promote safety measures (among passengers) as well as constant monitoring of accessibility in railway areas,” he said.

Ajit was asked to comment on the death of an Indonesian woman after she was hit by a commuter train at the 42.1km mark near the UKM Bangi station in Selangor on Sunday.

He said she was apparently crossing the tracks.

“We need to check why the victims chose to cross the railway tracks instead of using the overhead bridge. Was it damaged or not accessible by passengers or were the fences exposed?

“These are some of the issues that we need to look at,” he said.

The authorities, Ajit said, should also examine why risky areas such as the railway tracks were easily exposed to the public.

National Institute of Occupational Safety and Health chairman Tan Sri Lee Lam Thye called on train users not to take the easy way out and use illegal crossings.

“Never take shortcuts or your safety for granted. Railway authorities should enforce the regulations to ensure users do not use illegal crossings,” he said.

The Railway Company (KTMB) could not be reached for comments at press time.

[Source: Adapted from The Star Online dated 19 May 2016. Train firms urged to invest in safety campaigns by Ramimy Rahim. 
Read more at https://www.thestar.com.my/news/nation/2016/05/19/train-firms-urged-to-invest-in-safety-campaigns/#BcrKJIH1T2ey0x40.99. Accesse on 22nd June 2017.]

Required:
(i) As the Corporate Administrator for the Railway Company, advise the board of directors on the risk management process that would be appropriate in the above case.
(ii) Identify and describe any Three (3) appropriate risk management strategies to be applied for handling the risk in the above case.

Suggested Answer:

(i) Risk Management Process

Step 1: Risk identification

• The first step in risk management is to identify the existence on the risk. In this process, the Railway Company management has to look into the specific events and conditions that could result in the risks materializing. 
• The Railway Company management should make a list of all the known and familiar risks and the hazard(s) that they may bring upon the railway company or the people around the railway tracks. 
• The Railway Company management must continuously monitor the risks involved and also identify any new risk that may arise over time. 
• In the above case, there were two separate incidents involving people being hit by trains while apparently trying to cross the railway tracks. 
• In the first incident, an Indonesian woman died after being hit by a commuter train at the 42.1 km near the UKM Bangi Station in Selangor. She was apparently crossing the tracks. 
• In another mishap, a teenager was killed after he was hit by an Electric Train Service train heading from Padang Besar in Perlis to KL Sentral at the 114.25 km mark near Jitra. He was trying to cross the railway tracks to go to a shop. 
• In both incidents, the Railway Company is responsible for maintaining and upgrading operational safety facilities at the stations and along the railway tracks and therefore, the railway company should identify the risk involved. 

Step 2: Risk Assessment or Evaluation

• In the event of a risk occurring, the financial impact of the risk should be quantified. 
• It is not easy to forecast the financial impact as they may only be known after the disaster (in this case, the two railway tracks crossing incidents) has occurred. 
• Upon the occurrence of the disaster (in this case, the two railway tracks crossing incidents), compensations to the families involved, inconvenience and loss of time to railway passengers, cost of repairs to the train and any additional costs involved in fencing up the tracks can only be estimated. 
• In addition, the image and reputation of the Railway Company may in dented or damaged, in particular, the Public Transport Users Association President and the National Institute of Occupational Safety and Health Chairman had spoken up on these two incident and called upon the Railway company to examine why risky areas such as railway tracks were easily exposed to the public. 
• Thus, the Railway Company has to estimate the cost of fencing up the exposed areas along the railway tracks, building more overhead bridges and the time involved in putting up a survey on the railway tracks exposure. 
• More importantly, the Railway Company has to find out why people do not use the overhead bridges and instead crossing the tracks which is very dangerous. 
• To do this survey, the Railway Company has to engage the residents living along the tracks to report the adequacy of and the condition of the fencing along the railway tracks. 
• The train drivers should also be made to make a report on potential exposure along the routes that their train ran. 
• A special team of railway inspectors should be drawn up to conduct a physical inspection of the tracks to ensure proper maintenance of the railway tracks and the fencing. 
• Any other relevant answer. 

Step 3: Risk Quantification (Analysis)

• This process involves the detailed analysis of the risk involved whereby the results and probabilities are calculated. The calculations can identify the following information, which the Railway Company may be exposed by this specific type of risk:

                  - Average or expected loss or results

                  - Frequency of losses

                  - Probability of losses

                  - Largest predicted losses

• Many of the risks facing the Railway Company are significant. Quantification may be useful by looking at past events such as exposure in the railway tracks caused by people attempting to cross the tracks or even wild animals damaging the fencing. 
• Other factors could include the weather pattern such as flooding of the adjacent roads that could lead to people crossing the tracks instead. 
• Sometimes, these incidents may appear to be one-off but in the above case, there were two such incidents happening within a short span of time. 
• Thus, the Railway Company needs to quantify the cost of surveying and strengthening the railway track fencing and minimizing the tracks exposure for crossing. 
• In addition, the Railway Company can consider insurance converge to such incidents. 
• Any other relevant answer. 

Step 4: Risk Monitoring and Control

• The nature of the above risks from people crossing the tracks is dynamic and to a certain extent, difficult to control. 
• It is therefore, necessary for the Railway Company management to institute a special team of railway inspectors to constantly monitor the railway fencing, overhead bridges, railway traffic lights, barriers and even the proposed Education campaign to reduce, minimize or avoid any losses arising therefrom. 
• In the above case, it is important for the Chairman of the Railway Company to request from the management a report on the above incidents for the attention of the Board. 
• The Management Report should outline the preventive measures that include an Educational campaign and the monthly activities planned for the next three years in monitoring the risks.

(ii) Risk management strategies. 

The Railway Company can respond to the various risks in its business operations by undertaking the following risk management strategies:

1. Risk Transfer: Risk transfer means limiting the impact of a risk by taking steps to ensure that other will bear the impact if it materializes. The risk is transferred to a third party (insurance company). To do so, there is the need to negotiate on the risk exposure pertaining to the probability of railway track crossing and occurrence of accidents and the amount of insurance premium involved. In the event that the risk exposure be too great, the insurers are not prepared to accept the risk involved. As the Railway Company (KTMB) is a Government-Linked Company (GLC), there is the possibility of asking the Government to provide for some form of insurance. 
2. Risk Avoidance: Risk avoidance means taking steps to avoid a risk impacting an organisation. The Railway Company can consider whether it can avoid the risk. Good maintenance and continuous upgrading of the physical facilities such as fencing, overhead bridges, railway traffic lights and barriers can reduce the risk of people crossing the tracks. 
3. Loss Control: Loss control means taking measures to reduce the chance of a risk materializing or reduce its consequences. The Railway Company can take some appropriate measures to reduce the risks. The Railway Company management can provide and promote safety campaigns among the residents and train passengers and use the overhead bridges. The safety campaigns are to be held on a repeated basis and thereby enhance safety awareness on the danger of track crossing. 
4. Risk Acceptance: Risk acceptance means taking a conscious decision to suffer the consequences of risk, should it materialize. The Railway Company can take responsibility for the full risk in the event an  insurance coverage is not available. In view of the uncertainties pertaining to risk involved, the insurance companies may not be willing to cover the risk and provide such insurance. In the future when another accident occurs with people crossing the railway tracks, the Railway Company is willing to take the full loss. 

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