Facilitator Agencies in Higher Education: Present Status and Prospects
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1 Facilitator Agencies in Higher Education: Present Status and Prospects Motohisa KANEKO Center for National University Finance and Management Helping Universities to be Effective and Viable: Missions of Facilitator Agencies in Higher Education An International Forum Organized by The Center for National University Finance and Management, Japan (CNUFM) 2-3 November 2010, Tokyo
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3 Many countries have developed various agencies, both public and independent, to facilitate the functioning of higher education institutions. These entities, which I call facilitator agencies include independent funding agencies, accrediting bodies, various types of institutional associations, university evaluation agencies, and professional associations. They have been developed to achieve particular roles that are essential to enhance the efficiency and effectiveness of the higher education system. And yet, there has not been systematic effort to understand their roles and problems. What are the roles of these agencies, why are they becoming important now? What are the challenges and future? What are the theoretical issues that development of these agencies need? These are the questions that this paper tries to address. In the following I will first review the present status of higher education reforms to identify the need which the facilitator agency should respond to (Section 1), examine the mapping of existing agencies (Section 2), and discuss a few issues and challenges that these agencies have to meet (Section 3). 1. Higher Education Reforms at the Turn of Century From the end of the 20th century to the beginning of the 21st century, higher education in the world experienced significant changes. Most salient among them is the move to introduce the elements of market mechanisms. Public institutions were given a greater degree of autonomy. In a number of countries national universities were transformed from the status of an arm of government organization into an independent entity. Japanese national universities were incorporated in 2004 to become national universities corporations. The increased independence was accompanied by the changes in government subsidies to the university. In many countries, public universities were one of the government facilities to provide public service, which implies that the government was held responsible to provide sufficient resources for maintaining its function. With the increased degrees of independence, the principle was altered. The government pays contribution for the services that the universities make. In some cases, the government measures the performance of the university in various scales, and subsidizes according to the measured performance. In other cases government and each university strike a contract over what the university should accomplish, and the government contributes the amount necessary to accomplish the specified target. The degrees of achievement are evaluated in a fixed period, and the result would be reflected on the following contract. Behind these constructs is the influences of the so-called New Public 3
4 Management theory, that asserts that public services can be achieved more efficiently by distinguishing the principal (government) and agent (specific agency, or university in this particular case). The relation between the principal is regulated by the explicit contract and the rewards or penalty based on the evaluation of achievement. Looking back into the past three decades, one cannot but notice that practically every OECD countries undertook some reforms to this direction. One would also notice, however, that the premise of those reforms have been half-fulfilled at best. In many countries, it was revealed that simple introduction of market mechanisms would not induce efficiency or long-term viability of higher education system. In the United States, performance-based funding has been advocated since its introduction in the State of Tennessee in the early 1980 s, but its influence turned out to be limited compared to that once expected. Moreover, the proportion of state outlay effectively influenced by performance evaluation rarely exceeds one-tenth of the total. The British introduction of Research Assessment Exercise in the 1980s as a device to allocate government funds exerted considerable influences on theother OECD countries. And yet, it seems to have evolved straight along the original design. Moreover, it remains to be focused only on research, but not on education. Why did these reforms have yielded less dramatic results than theoretically expected? The recent Japanese experience of incorporation of national universities is illustrative. The underlying logic of incorporation of national universities can be summarized in a diagram presented as Figure 1, where incorporation induces changes at each institution to produce desired effects. The core of incorporation lies in three factors. First, the relations between the government and the national universities are regulated by the mid-term goals and plans that are agreed upon by both parties. The government acts as the principal, and each university as agent, to produce services in education and research. Provided with those goals and plans, the government give subsidies to the institutions. In this sense, the relation is regulated by an implicit contract. The level of achievement of the goals are evaluated at the end of the mid-term period, and the results are used to set the next mid-term goals and corresponding government subsidies. Meanwhile, institutions are given basic autonomy both in governance and finances. Each institution is presided by the president as the chief executive officer, and the council appointed by the president makes basic decisions on management. These reforms at the system level are expected to induce significant changes in each national university. Particularly, the changes in the following three aspects are important. First, each institution is given specific goals to achieve. Rewards 4
5 and penalty contingent upon achievement of the goals create strong financial incentives for the entire institution. Second, the president and his council are provided with considerable power in the governance structure. They reallocate resources both in terms of faculty and administrative staff to achieve the goals. Third, the administrative processes are liberated from minute bureaucratic control by the government. It will free administrators and faculty members from procedural works to invest greater portion of their times for the works directly related with education, research and social services. These would affect not only the behaviors of faculty members and administrators, but also the behavior and culture of the organization. In the end, these factors would result in enhanced productivity in research, education, and other areas. Moreover, these changes will be achieved towards the direction that the society expects from the national universities. In this way, incorporation would bring about better national universities. To what extent, was it realized in the subsequent years? Figure/Table 1 Design and Expected Consequences of Incorporation Incorporation Process Expected Outcome Contract Goalsand Rewards Incentive to Achieve Goals Response to Social Needs Evaluation of Performances Institutional Autonomy Managerial Effectiveness Reallocation of Resources Administrative Efficiency Organizat ional/ Behaviro al Change Productivity in Education/ Researchl This year the Japanese government released the results of evaluation excercise, but its effect on government outlay was minimal. Even at the extreme case, it did not exceed plus or minus 0.5 percent of the previous level, and for most institutions it was minimal. I would argue that it was not from the resistance from the universities, but it reflects some of the fundamental problems intrinsic to evaluation of higher education institutions. In the first place, evaluation still lacks reliability to affect a large proportion of budget. Especially, it still lacks consistent measures and methods to evaluate the performances in education. 5
6 Moreover, direct linkage between evaluation and financial allocation causes some fundamental problems. A poor level of performance may be the result of poor resources and other negative conditions; if it is punished by lower level of subsidy, it will inevitably result in even poorer performances. On the other hand, the marginal product of additional resources may be less in the better-performing institutions. One could argue then that by evaluating the genuine efforts or improvement to raise the performance. But its evaluation can not escape from being subjective. Moreover, many institutions would set artificially low levels of original targets in order to exaggerate their efforts. In responding to those problems, one may design a scheme of evaluation that encompasses every field of activity including not only research but also education, and various perspectives including the absolute level of achievement, the degree of achievement of set goals, the extent of improvement and the judgment of the institutions itself. One would derive from those a comprehensive performance indicator. The problem is that nobody can tell what it implies. It also does not help individual institutions for effective reform. The evaluation exercise held this Spring showed a perfect example of this case. The second viewpoint is the improvement in effectiveness of institutional management. It was stated above that by introducing the Incorporation Law, the governance structure was drastically changed to enhance the power given to the top administrators, particularly the President and the Board members In 2006, two years after incorporation, an opinion survey was undertaken to ask the opinions among the presidents of national university corporations as to the consequences of incorporation. The results showed that, so far, the presidents regarded incorporation had on the whole positive effects. Especially, they thought the reform improved the management easier and the activities efficient. It is in a way, a reflection of the frustration that they harbored under the old system of national universities. In fact, as much as 95 percent of the top officials think that incorporation had positive effects in enhancing efficiency in management. Also, they found it as positive effects on enhancing uniqueness of each institution, organizational vitality. It should be noted, however, they are less sanguine as to the effects on the level of research or education. In fact, the actual effect of increased power given to the top administrators are not clear. A survey by the Center for National University Finance and Management showed that in general, the amount of budget reserved by the central administration increased substantially. It is not clear that how much they were spent for redistributing the money to shift the pattern of internal allocation of resources. The lack of radical change in resource allocation is closely related to 6
7 the making of power in the universities. The Incorporation Law stipulates that the President to be elected by the election committee composed by representatives of faculty members and lay members. The third point of consideration is administrative efficiency. It was expected that by removing minute government regulations, administration will become efficient in various ways. From this point of view, incorporation seems not only to have failed to produce the expected effects, but also resulted in rather negative consequences. A survey on administrators in the Spring of 2001 (Figure/Table 6) found that administrators are at best neutral in evaluation of the consequences on efficiency of administration and resource uses. More than half of the respondents disagreed with the statement that incorporation made administration more efficient. About half of the respondents did not consider that the scheme with specified goals and evaluation of achievement is functioning. Figure/Table 6. Consequences of Incorporation on Administration - Administrators Assessment Work has increased More talented employees have been recruited Expenditure became efficient Administration became efficient Midterm Goal/Evaluation Scheme is functioning % 20% 40% 60% 80% 100% Agree Agree to an extent Disagree to an extent Disagree Source: 2010 Survey on University Administrators Center for Research in University Management, The University of Tokyo On the other hand, they felt that incorporation actually increased their workloads significantly. An overwhelming majority of the administrators agreed with the statement that workloads have increased after incorporation. It is true that the process of organizational transformation accompanying incorporation was considerable. But, considering that this survey was conducted after six years since incorporation, the response cannot be considered to reflect temporary problems. One could suspect that the results show that, while new schemes for managerial control was 7
8 introduced, various practices and regulations from the pre-incorporation period are still alive. Under these circumstances, administrators have to work under two principles at the same time. 2. Facilitating Universities to Change The discussion above indicates that neither the incorporation model nor the performance based funding model can not be effective without the internal changes in the university with respect actual management procedure and the behavior of academic and administrative staff. The governmental schemes lacked systematic measures to advance changes in this respect. It should be noted that the organizational and behavioral changes should be initiated and nurtured within the individual institutions themselves. The mission and the resources of the universities are markedly different from each other, and the efficiency and relevance can not be obtained without considering the uniqueness of the contexts. Moreover, the effectiveness of organizational reforms is critically dependent on the participatory process of the members themselves. In this sense, the government should not be directly involved in the internal process of designing and implementing the changes. It is also true, however, the initiative to change is usually weak and frequently fail to gain momentum within an institution. That is because the members are unaware the potential extent, and the needs, of the change. Such an insight can be obtained only through comparisons with other institutions. Also, such information should be laid on a context to lead to an concrete action. In that sense, networks of higher education institutions should play significant roles in widening the perspective and providing necessary information. But such networks do not emerge naturally, and it is not without reasons. Being a part of academic world, universities can be friendly to each other and willing to share information. But, at the same time they are competitors, and under the current policies they are driven to be competing with each other. Thus voluntary formation of networks should face significant limits. It is this void that various types of facilitator agencies should fill. In fact, there are many institutions already existing to play significant roles between the government and individual institutions of higher education. One notices that in the United States, where the role of the Federal government is legally limited, there are many organizations taking such roles with the history of more than 100years. Regional accreditation bodies were created at the end of the 19th century. It was 1906 that Carnegie Foundation for the Advancement of Teaching was established. In 1915, American Association of University Professors was organized. The 8
9 Predecessors of National Association of College & University Business Officers (NACUBO), American Association of Collegiate Registrars and Admissions Officers (AACRAO) National Association of Student Personnel Administrators (NASPA) were created in this period. In the UK, where the government s legal relation with the universities was ambiguous, University Grants Committee was created in 1919 to distributes government funds, but it gradually gained its mission in planning and monitoring universities until it was transformed into UFC, and then to the present HEFCs. Other countries ha similar organizations, but their history tend to be shorter and the scope of the mission are narrower. In those countries, the government has pervasive powers, even on private institutions, and the relation between the government and universities were close and tight. As stated above, however, the relation have been changing. The existing facilitator agencies fall into three categories: 1) Evaluation and Accreditation Agencies: Historically, American accreditation agencies are the oldest. They are unique in combining peer evaluation and accreditation. Recent years, many counties established evaluation agencies that are not necessarily combined with accreditation function. In some countries, some agencies are established for construction of database. 2) Funding Agencies. UGC in the UK is the classical example of funding agencies. Similar institutions are now found in many other countries. To a varying extent, they have evaluation function as the basis for determining the level of subsidy. 3) Institutional Associations and other Voluntary Associations. This category includes divers groups. One is the association of universities. The definition of membership can be diverse. These associations are primarily organized to convey their demands to the government. There are also associations of professional serving higher education institutions. National Association of College & University Business Officers (NACUBO) of the United States, as mentioned above, has a long history and a very large membership. There are many foundations, non-profit organizations and voluntary associations playing significant roles. In recent years, for-profit institutions and consultants are playing significant roles in the field. The classification above is made by their main mission. But, in order to achieve the main mission fully, many organizations have realized that some facilitating functions are important. Monitoring and research, and training are but one examples. In fact. From the viewpoint of the void in recent reforms, these functions can be equally important. Thus, the function of those agencies can be summarized as below. 9
10 A) Core Operation, Each body are given their primary function such as evaluation and distribution of funds. B) Monitoring and Analysis In order to achieve the main function, the reality of the functioning of individual institutions should be monitored. It is often the case that the top management of universities do not have sufficient knowledge, or the means to acquire information, about the internal functions. The monitoring, and extraction of meaning information, requires consistent effort of research. While the growing academic research in higher education serves a significant basis for this purpose, the academic research can be sometimes remote to the actual needs. Accumulation of relevant knowledge is critical. C) Consultation, Training and Advocacy Consultation related with the core operation can be included as an element of core operation, but consultation can be required covering wider spectrum. Critically important is professional training of administrators at various levels. It is important that with higher education institutions, the needs for training may not be identified by the institution itself. It is also important, that academic administrators faculty members need to be given a chance to be exposed to views from outside. It is particularly critical in inducing changes in undergraduate and graduate education. This list illustrates that the scope of the functions of these agencies ought to be are deepening in order to achieve their core operation fully in the present status of higher education reform. 3.Issues and Prospects The discussion above indicates that the role of facilitator agencies are indeed important. There are, however, various issues for them to fulfill their mission. There are three sets of issues. First is the definition and range of mission. It was discussed above that the facilitator agencies fall into three broad categories: evaluation/accreditation agencies; funding agencies; and associations and voluntary organizations. Because individual institutions were created in the particular context of the issues that higher education faced, the definition and scope of its mission differ greatly. While in some countries, evaluation agencies serve accreditation agencies, in some other countries evaluation agencies only rate performance for funding. Moreover, besides the core operational function as evaluation or funding, many agencies monitor the organization, finance and other aspects of organization, and provide necessary information based on them. Those 10
11 organizations also consult with universities in various aspects. Another important function is the training of specialized personnel in the field. In fact, these functions are becoming equally, if not more, important in their activities. The wide range of possible missions may possibly create problems. On one hand, there are many functions that have not been undertaken in any organizations. It is particularly true with the countries where the facilitator agencies are still in their infancy. On the other hand, there are cases that the missions are overlapping, creating redundant services. While one may possibly argue that the competition among agencies are in fact healthy, resources should not be stretched too thin. Type of Agency 1) Evaluation/ Accreditatio n A) Core Operation Evaluation Accreditation 2) Funding Funding Core and Underlying Function B) Monitoring Analysis C) Consultation Training 3)Association,Consortium, Voluntary Organizatio ns Representation of Interests The second issue is the governance and finance of these agencies. In some countries, some of these agencies are established by the government by law. Some other type of agencies are established by higher education institutions and supported by their contribution of member institutions. Still other agencies are voluntary, being supported by membership fees. Moreover, there are an increasing number of for-profit corporation playing significant roles in this field. The government in the present political climate tend to encourage the introduction of private initiatives. It is possible that for-profit organizations can provide better services at a lower cost. University can then pay for the services in the form of fees. In fact, this model is suitable if the university knows exactly what information or training is lacking. On the other hand, individual higher education institutions may not be aware of various problems. It may be also the case that individual institutions pay attention to short-term problems, but may not consider long-term problems sufficiently. In these cases, the private provider may not be sufficient. Organizations with public mission should play a role. 11
12 These issues boils down to the form of funding and governance of facilitator agencies. The third issue is accumulation of expertise and knowledge, which serve as the basis to support these activities. To the extent that the agencies try to enhance the core operation through monitoring and analysis, or consultation and training, it becomes more critical that these agencies have its own expertise and relevant knowledge. Many agencies have veteran administrators very knowledgeable in the practices of core operation, but the kind of knowledge does not necessarily translate into a systematic body of knowledge that supports the activities facilitating institutional changes. On the other hand, academic research in higher education have developed rapidly in recent years. They tend to be increasingly specialized and dependent on more sophisticated methodology which are remote to the practical questions. It should be also emphasized that the knowledge and expertise in this area can not be integrated around certain theory. It may be better to regard it as a loose body of knowledge shared among the experts in the facilitator agencies and those in universities. That concept is attractive in abstract, but it makes it even more difficult to conceive the way to accumulate and transmit it. Conclusions These are but some of the questions arising in the mind of the present author. It is in a way strange that the role of facilitator agencies have not been discussed systematically in the literature of higher education studies, except for historical treatment of individual organizations as UGC (Buttock 1997) or NACUBO (Hines 1995). It is mainly because each institution was created to deal with particular issues of the time. As a result, there has not been strong interest to set them as an important element in the system of higher education. Moreover, there are various organizations in a single country, and the patterns of division vary significantly from a country to another. There has not been systematic effort to map their roles, and compare it across countries. I would argue that it is high time that we set these agencies as one of the integral element of higher education system. Analyzing and comparing them across countries is a good starting point for this endeavor. 12
13 References Neal O. Hines; Abbott Wainwright A History of Nacubo Business Officers in Higher Education, 2 Sub edition, National Association of College & University Business Officers Shattock, Michael (1994). The UGC and the management of the British universities. Society for Research into Higher Education. 13
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