Kontent Review

Dennis Tourish
18 January 2006

I CAME to Australia in 1999 to work at a sandstone university. But within three months of my arrival I started applying for jobs back in Britain and left within a year. My recent visits tell me that many of the problems that existed then have intensified. At the bottom, these can be summed up in one word: managerialism. This is the wholly unreasonable conviction that those at the top always know better than those they manage, who must bow in all matters to the wisdom of their betters.

Thus, university management in Australia increasingly seeks to casualise labour by reducing the proportion of tenured faculty; undermine collegiality and involvement in decision-making by centralising power; reduce real academic salaries; and preside over a widening status gap between managers and the managed.
These approaches contradict research into what the most effective organisations actually do. Studies looking for what distinguishes the best performers from the worst suggest the following lessons for Australian higher education today.
First, improve employment security. Higher education increasingly relies on vast numbers of people who have no permanent relationship with universities. However, research evidence suggests that productivity improvements, staff loyalty, high quality and innovations in work practices are hard to sustain when people become terrified of losing their jobs, or feel semi-detached from a business.
A more positive example is that of the US retail chain Men's Wearhouse. It recently achieved a five-year compounded annual growth rate of 26 per cent in revenues and 29 per cent in net income, in a market where men have been spending less on tailored clothing. A leading reason for its success has been reliance on a permanent, full-time work force. Only 12 per cent of its staff are part time, a much lower figure than the industry norm.
A contingent work force is less loyal (as its employer is less loyal to it), understands less about the core business, has little incentive to deliver superior customer satisfaction, is more preoccupied by its own unmet needs and has a lower skills base than its more secure counterpart.
Yet university managers increasingly talk of having a much larger periphery of semi-experts who can be hired or fired at will. This supposedly new and "virtual" approach is more like a method known in the late 1700s as "putting out", where workers owned their own looms and spinning wheels and provided finished product to a merchant putter outer. The system failed because of poor quality.
Second, decentralise decision-making. Workers with greater autonomy and discretion have higher job satisfaction and therefore outperform those in tightly supervised groups. For example, a manufacturing plant that introduced self-managing teams found defect rates were reduced by 38 per cent and productivity rose by 20 per cent.
In contrast, the Queensland University of Technology's vice-chancellor Peter Coaldrake has publicly endorsed the view that academics "had better get used to new impositions of accountability and performance as quickly as possible". The suggestion is that it is the job of managers to think and that of others to do, and do what they are told.
Compare his tone with that of Lawrence Bossidy, former chief executive of the multibillion-dollar company Allied Signal: "The day when you could yell and scream and beat people into good performance is over." Many businesses are embracing forms of collegiality found in traditional universities, while universities in Australia are emulating a managerialism now largely disdained in the corporate world where it originated.
Third, improve pay and encourage trade union organisation. Higher pay attracts the brightest and the best, and is a characteristic of businesses that manage to sustain top performance over an extended period. Individual contracts tend to reduce the median level of pay while undermining the team spirit central to organisational success. Research has also found that higher rates of unionisation are connected to higher productivity and profits.
One study looked at 600 manufacturing companies in the US. It found that unionised firms had productivity levels 16 per cent above the norm. There are exceptions, but I am drawing attention to general trends. Productivity in non-unionised firms was 11 per cent lower. Southwest Airlines has been dubbed the best company to work for in the US by Fortune magazine, is the safest of the world's 85 major airlines and is the only US airline to have been profitable for more than 26 years. It is also the country's most highly unionised, with membership levels of 84 per cent.
The two are connected. Unions tend to want higher pay, which means the better qualified candidates are more likely to seek jobs with the organisation concerned. In turn, higher productivity from a motivated and loyal work force more than compensates for above-average pay levels.
By any reasonable standard, academic productivity and performance have soared. Pay has not (vice-chancellors aside). Trade unions have also been demonised as an enemy within, rather than viewed as potential partners. Of late the Howard Government has made extra money available for universities but it is contingent on staff being offered individual contracts.
The hope is that trade unions, a lingering remnant of the staff voice, will be further marginalised. Clearly, this is more likely to generate internal conflict than world-beating performance. An organisation at war with itself rather than the competition rarely sustains a pre-eminent position.
What next? I have highlighted only some of what effective organisations in the real world do. The Australian Government champions none of them. Its approach embodies the folk wisdom of an untrained supervisor in a mid-19th-century textile factory. Given that none of its policies are remotely original, the most that can be said in the Government's favour is that it at least has the courage of other people's destructive convictions.
It is time for higher education to start afresh. The prospect of a career in Australian academe grows steadily less alluring. Can demoralisation and disempowerment really produce a clever country? The Howard Government seems to think so.
My novel suggestion is that, for a change, management in universities should be modelled on best practice and the theory that summarises it, instead of the worst.
Dennis Tourish is professor of management and leadership at Aberdeen Business School in Scotland.