Risk Management of Universities in the Age of Digital Disruption
Keywords:
Risks of Universities in the Age of Digital Disruption, Situational Risk Management, Universities of the FutureAbstract
The initial stages of risk management in universities focus on policy/strategic risk, operational risk, financial risk, and compliance risk. Subsequently, additional focus was put on external risks namely competitive risk, supplier risk, economic/political risk, and regulatory risk. These risks can be managed through 4 basic techniques or 4Ts which are accepting risks (take), reducing or controlling risks (treat), transferring risks (transfer), and avoiding risks (terminate) according to the direction and capacity of each organization. Nevertheless, when universities move into the age of disruption, they will face new risks. These include risks of uncertainty, risks that are hazards, or risks that can turn into opportunities. Hence, universities must respond to risks evolving from situations of volatility, uncertainty, complexity, and ambiguity, or VUCA, to equip themselves to become universities of the future. Management of these new risks requires universities to eliminate uncertainties by creating clarity and employing CLEAR (C: communication, L: limit of detection, E: effective operational, A: awareness, R: readiness), and create opportunities for themselves with SELF (S: skill gap management, E: empathy learning, L: lifelong learning, F: failure learning), and to gain competitive advantages by ACT (A: adherence to rules & academic staff, C: confidence & collaboration, T: target market & time management). Therefore, universities will adapt and manage the current unseen and future risks. As well as navigate away from risks as disruptors, rather than as victims of change and disruption, to grow sustainably amidst the trend of digital disruption.
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