Higher Education Review Process

Meeting the Challenges: the Governance and Management of Universities

4. university management issues

• a. efficiency and effectiveness in general

• b. development of management capacity

• c. cost saving/revenue raising

• d. inter-institutional cooperation

The university is no longer a quiet place to teach and do scholarly work at a measured pace and contemplate the universe as in centuries past. It is a big, complex, demanding, competitive business requiring large scale ongoing investment.
(Skillbeck 2001, p6)

130  There is no doubt that the academic enterprise is changing at a rapid pace. Sources of university funding have greatly diversified. While Commonwealth funding has increased every year for 20 years, it represents 50 per cent of total revenue today – 20 years ago it represented 90 per cent. This expanding revenue base has important implications for the way in which universities are managed. 

131  There is a strong interest in the efficiency and effectiveness of universities not just because of the significant amount of Commonwealth funding made available to universities, but also because of the fundamental role universities play in shaping the nation. This interest needs to be sensitive not only to the autonomy of universities, but also to their expanding revenue base.

132  In Higher Education at the Crossroads a range of management issues associated with the efficiency and effectiveness of universities and workplace relations were canvassed. Submissions to this Review indicate that there are divergent views in relation to the current state of efficiency and effectiveness of universities. The major areas for efficiency improvement identified in submissions require greater flexibility in workplace relations or more cooperation across institutions, especially across the higher education and vocational education and training (VET) sectors.

133  Issues associated with teaching and learning outcomes were covered in the first issues paper prepared for this Review Striving for Quality: Learning, Teaching and Scholarship. The interface between higher education and VET will be the subject of the final issues paper. A detailed examination of efficiency and effectiveness issues will be included in an international comparative study on the resourcing of universities and their management which is currently being undertaken by the Productivity Commission. A draft report from the study is expected in September 2002.

134  This chapter briefly canvasses several important points relating to efficiency and effectiveness as raised in submissions.

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a. efficiency and effectiveness in general

135 Both the public and governments expect that higher education institutions will make cost effective use of the resources provided to them. It is not easy, however, to determine the efficiency of university operations in any absolute sense, relative to other institutions or even to measure changes in efficiency over time. There are major difficulties in measuring university outputs and outcomes.

136 More students can graduate from a university within a given level of resources but this does not necessarily mean that the university has become more productive. It is conceivable that the quality of the education these graduates received may have declined. Decreases in cost per student and increases in indicators such as completion rates and student/staff ratios are frequently interpreted as meaning either that quality must be declining or that productivity must be increasing.

The suggestion is… that a decrease in cost (ie. expenditure) per student and an increase in student pass and completion rates would signify greater efficiency. Unfortunately this could equally indicate declining quality and lower standards ...
(University of Western Australia, Submission 175, p10)

137 The reality is that crude quantitative indicators such as these cannot be interpreted as meaning either of these things without considerably more information.

138  Research productivity is probably even more difficult to measure. The number of research publications and the number of citations for these publications are often used as indicators of research performance. More articles and more citations for a given level of resources cannot be used uncritically as an efficiency measure because issues of quality need to be considered.

139  These considerations lead to the conclusion that there is no magic measure of productivity or efficiency in the higher education sector. Any overall assessment or set of performance measures must be attuned to the circumstances of individual institutions. Notwithstanding the challenges, universities need to monitor their efficiency and effectiveness. It is clearly fundamental to any continuous management improvement approach.

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b. development of management capacity

140  Universities and the Australian Vice-Chancellors’ Committee (AVCC) run staff development programs that include a focus on university management. The growing corporate nature of universities requires a greater focus on strengthening the management skills of senior staff. This point was made by the Australian Maritime College which notes: 

It will be increasingly necessary for the managers of the organization to have good management skills. This will mean either recruiting senior managers from outside or putting in place staff development programs that will provide management skills to academic leaders.
(Australian Maritime College, Submission 237, p6)

141  Some submissions suggest that a national focus on this matter may be warranted:

Special resourcing to help strengthen top level and director/manager level management skills is strongly encouraged. Staff coming up through traditional academic pathways particularly need appropriate management training to enable them to effectively handle the increased requirements of more senior positions.
(Edith Cowan University, Submission 225, p6)

Commonwealth assistance in the form of programs providing opportunities for university top managers to work inside or outside the sector for focused periods, such as in other universities, industry or government placements would be of possible benefit. These secondments could be supplemented with executive development programs targeting specific desired capabilities. Opportunities for university top managers to ‘rub shoulders’ with other industry and government managers in the development context would also breed significant networking and project-related benefits.
(Queensland University of Technology, Submission 96, p24)

142  The Association for Tertiary Education Management (ATEM) argued for greater recognition of university managers. It notes that academic staff are less than 50 per cent of university staff. It argues for a single, targeted professional development programme that addresses the management needs of institutions and is open to all university managers.

Academics and administrators exist as two professional groups in universities, and they operate in parallel and in isolation from one another. This is a state of affairs sustained by separate industrial awards … The present environment where rewards and recognition depend on classification … exacerbates the tension and lack of trust that now exists between the two groups.
(ATEM, Submission 106, p3)

143 Is there a role for the Commonwealth and States/Territories, in partnership with the AVCC and other stakeholders, in developing strategies to promote university management capacity?

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c. cost saving/revenue raising

144  Many universities argue that in recent years they have made substantial gains in cost saving and revenue raising which were not adequately recognised in Higher Education at the Crossroads:

The use of UTS buildings for teaching, research and community use at night and on weekends, and across two semesters and a summer teaching session, is already very high. Teaching spaces for evening classes are used to capacity on all except Friday evenings…
(University of Technology, Sydney, Submission 96, p19)

Universities such as QUT have been incorporating ‘e-business’ approaches and strategies to the provision of their administrative systems, with a goal of providing more efficient, “do-it-yourself” enquiry mechanisms for staff and students across the wide suite of administrative systems currently in place. The implementation of collaborative systems such as the Callista student system is a major step towards streamlining these processes.
(Queensland University of Technology, Submission 96, p19)

145  Universities point to some of the structural barriers to further improvement which are discussed later in the chapter on workplace relations. They also put positions similar to that of the University of Western Australia which argues:

the potential efficiency gain of collaborative ‘back office’ administration and shared service agreements … is quite varied … but is worth exploring on a case by case basis.
(Submission 175, p11)

146  Universities argue that cost savings from outsourcing and collaboration with other institutions need to be weighed against matters of institutional control and quality. They support continued efforts to increase efficiency and effectiveness but tend not to support blanket prescriptions. 

147  Queensland University of Technology included the following list of possible measures to improve the efficient use of capital assets:

• Increased opening hours for libraries, as these buildings often form the core of a campus and provide a centralized point of access for students;

• The promotion of 24/7 computer laboratories, as an acknowledgement that today’s students need total access to computer systems. Not all students have the personal computers or the ability to dial in remotely;

• The introduction of a third semester, which maximizes the physical assets of universities and provides opportunities for students to accelerate their program of study;

• The continued support of part time study, which again maximizes the use of the physical assets of universities and provides flexibility for students with work or family commitments to attend lectures during evenings or weekends;

• The creation of links with local schools or businesses, who can participate in collaborative or shared usage of facilities. Initiatives such as the Caboolture Community Campus and the Kelvin Grove Urban Village are pioneering such initiatives;

• The creation of spaces within universities that have value as community resources as well as university resources, such as the QUT Cultural Precinct;

• The introduction of internal charges for space utilization, which both rations demand and encourages fuller capacity utilization;

• The encouragement of private sector/community use of university assets and facilities for commercial returns.
  (Submission 96, p18)

148  Some submissions argue for the Commonwealth to consider the provision of incentives for, or assistance with, major cost saving/revenue raising initiatives. 

reform efforts in themselves consume significant time and resources, with a time lag before savings and service improvements are achieved. In particular, consolidating campuses or restructuring academic programs gives rise to significant short- to medium-term costs. There is a strong argument for the re-instatement of special funding to assist universities undertaking rationalisation and reform.
(Edith Cowan University, Submission 225, p5)

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d. inter-institutional cooperation

149  There is a significant level of institutional cooperation occurring between Australian universities, notwithstanding growing competitive forces. Examples of possible areas of cooperation raised during consultations and in submissions to this Review range from the rationalisation of courses through to the sharing of infrastructure, such as university printing facilities and the development of common Occupational Health and Safety Units for groups of universities.

Universities do collaborate where this is beneficial, especially in areas of low enrolment. Examples include the allocation of responsibilities for teaching of certain languages between the Victorian Universities, and the joint MBA provided by the Australian Graduate School of Management, a collaborative School of the University of Sydney and the University of New South Wales.
(Swinburne University of Technology, Submission 194, p17) 

AMC already collaborates in a range of areas with the University of Tasmania. From service teaching of engineering students in Launceston to providing accommodation for university students in AMC’s Halls of Residence, the efficiency that derives from this approach is quite high.
(Australian Maritime College, Submission 237, p5)

The most significant area of potential cross-sectoral collaboration is in physical facilities, through Multi-partner Campuses. This is of particular benefit in regional areas. Examples include the Library at Murdoch’s Rockingham campus which holds the joint collections of the university, TAFE and Local Council; and the Peel Education and TAFE campus which houses a Senior College, TAFE and Murdoch facilities.
(Murdoch University, Submission 166, p6)

150  The Queensland Government’s submission supports measures to improve the efficient use of capital assets belonging to the vocational education and training (VET) and higher education sectors.

The Queensland Government advocates joint planning across the sectors to ensure the best use of capital infrastructure, both new and existing.
(Submission 298, p19)

151  This issue will be taken further in the final issues paper to be released for the Review looking at the relationship between higher education and VET.

152  The Queensland University of Technology’s submission expresses the view that there is considerable scope for greater collaboration between higher education institutions and that Government support could be valuable to establish such collaborations. However, it cautions that:

The success of such initiatives depends very much on the goodwill of all parties, the identification of a defined project or group of projects that have realistic and valuable outcomes, and the agreement to a defined set of criteria upon which these collaborations can be based. Such collaborative agreements usually have a long term goal of saving money by streamlining resources, however initially most projects are costly and may require significant upfront investment in order to produce the desired returns.
(Submission 96, p19)

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some possible responses

153  A number of possible options have been raised in relation to the issues covered in this chapter. While not an exhaustive list, these questions have been included for consideration and discussion:

• What is the best approach for the Commonwealth to support continuous management improvement within the higher education sector?

• Should the Commonwealth be involved in developing and supporting strategies to promote university management capacity?

• Should the Commonwealth look at options to facilitate greater sharing and rationalisation of infrastructure between universities?

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