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Philip Yetton, Kim Johnston and Anne Forster
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6: Managing IT-based Strategic Change:
Integration and Conclusions Philip Yetton, Kim Johnston and Anne Forster |
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At the end of a study, it is helpful to go back to the beginning and ask why this study? As the well known saying goes: 'When you are up to your neck in mud and alligators, it is hard to remember that you came to lay optical fibre cable through the swamp'. Certainly, given the wide range of important issues raised in each chapter by our interviewees, it is easy to lose sight of the initial task we faced:
To identify how higher education institutions are managing the introduction of technology to deliver and administer higher education, and what approaches at the institutional level have been most effective in ensuring that technology is applied effectively to educational delivery and administration.
We structured our analysis around the MIT90s framework in Chapter 1 (reproduced here in Figure 7). This assumes that for an organisation to be successful it must achieve a tight internal fit among its strategy, structure, roles and skills, management processes and technology, and an external fit between this configuration and its environment. We investigated how tight an internal and external fit our case study universities had achieved, and the dynamic paths they were following as they managed IT-based strategic change. We examined the four steps linking technology changes to each of strategy, roles and skills, management processes and structure. In Chapters 2, 3, 4, & 5, we reported our research findings.
In Chapter 2, we outlined the bases of competitive strategy in the emerging deregulated environment of higher education. The emphasis is on competition leading to greater differentiation, and thus an increased strategic focus by universities. The nature of this strategic focus will vary depending upon the particular capabilities or core competencies of the university. There will therefore be different measures of success underpinning different strategies. The strategic issues identified in Chapter 2, all of which have important IT drivers, include quality of teaching, cost efficiencies, serving multiple campuses, competition for different types of students, and inter-university collaboration.
Three general strategies are described. These were observed to be emerging as universities compete using IT. First, a value-added strategy for the traditional, established university of high reputation. This strategy seeks to use IT to enrich the educational experience in an elite, high service, high variety institutional setting. Second, a cost-based strategy for a 'new' university, which focuses on using IT to develop and deliver highly reliable, standardised programs to large numbers of students, independent of location. Third, a hybrid mass customisation strategy for a large devolved university would seek to use IT to obtain the benefits of a low cost central IT infrastructure, while also using IT to add value by empowering innovation and client focus in strong academic faculties (divisions). Different universities are more suited to one strategic model than another, depending upon their history, age, size, reputation, etc. Impediments to making these strategic changes, such as university culture and ownership of IT-based change, were also discussed.
Adapted from Scott Morton 1991
Where Chapter 2 begins to outline the different goals of various universities, Chapter 3 identifies the key issues and challenges facing universities with regard to the changing skills and roles required to successfully manage IT-based change. As technology becomes more pervasive in all aspects of teaching and learning, the nature of both academic teaching and general staff IT support roles is being transformed. New positions are being created, and re-skilling and selection of people with new skills are required across multiple areas. This has significant implications for individuals as well as for the institutional arrangements which support them. Chapter 3 explores these issues in some detail, and provides examples of the different staff development strategies and activities that universities are adopting to deal with them.
Three approaches to staff development are described in Chapter 3. The integrated approach links support for the development of skills to educational and information technology and to university goals, reinforced by the creation of a central unit to manage the integration of teaching and learning with IT. The parallel approach, in contrast, creates an IT-based teaching and learning unit which operates separately and in parallel with existing staff development units. The distributed approach is more bottom up and primarily devolves responsibility for IT-based teaching and learning developments to local innovators across a range of faculties and units. The chapter discusses the strengths and weaknesses of these three approaches. In addition, it identifies the major issues to be managed, such as industrial relations implications, and the challenge of managing resistance and rewards in the change process.
In an era of shrinking budgets, there is considerable pressure to obtain increased efficiency and effectiveness from universities' IT budgets. In Chapter 4, the apparent lack of formal evaluation of IT investments in the universities studied is described, and its implications discussed. A general overview of the issues in IT evaluation is provided, and the benefits of more rigorous approaches to managing IT investments are outlined. Chargeback is one such approach which has advantages for linking IT expenditure to organisational priorities. In a number of universities, we observed the strategic use of budgets to influence the direction of IT investments, particularly regarding the development and use of educational technology.
One of the major IT investments in universities is in administrative systems. In Chapter 4 we also describe and analyse the CASMAC initiative to collaboratively design and develop such administrative systems through the use of several consortia of universities. Management issues associated with CASMAC are discussed, drawing on research findings concerning collaborative IT projects between organisations, project ownership, and managing risk in large IT projects. We highlight the potential problems which can arise due to organisational differences, separation of design from implementation, and technical and business risk. Finally, selective outsourcing is identified as one option for improving the management of IT in universities.
The above issues arising from the rapid change in both IT and in higher education have stimulated changes in IT management structures. Chapter 5 describes those emerging structural changes in the context of perennial IT management dilemmas such as who owns IT, where should IT sit in the university structure, and how do we get the cost benefits of centralisation as well as the value-added benefits of devolution and user-control? After reviewing the IT structures in the universities studied, we discuss different structural models for IT management.
Importantly, in Chapter 5 we locate the discussion and analysis in the context of the prevailing structural models for universities. We find an increasing tension between elements of the professional and the machine bureaucracy, both of which create competing priorities for IT management. After reviewing the option of the federal IT structure and pointing out its limitations, we describe two other organisational models for the management of IT which are emerging in universities-the divisional infrastructure model and the subsidiary model of IT management. Each of these models has a quite different focus, different management processes, and a different mode of allocating responsibility for IT. As such, they reinforce the increasing differentiation occurring in the higher education sector.
The issues raised above are only a selection of those discussed in detail in the preceding chapters. We now turn to their integration and the conclusions emerging from that analysis. There are two tasks. First, the integration of these different areas of analysis raises the question of how we deal with their complexity. Second, we need to adopt a focus for exploring the implications. We tackle the first problem by developing and applying theory to obtain a degree of parsimony and thus simplify the management task. For the second, we use the guidelines set for the report by the advisory committee to DEETYA as the basis for organising discussion of the implications (see Case Study 10).
Case Study 10: DEETYA Advisory Committee Guidelines Why This Study?
Information and communication technologies have an important role to play in achieving national education objectives. They can facilitate the delivery of education to regional Australia, into the workplace, to people with a disability, and to other groups unable readily to reach a university campus. They can also provide an enhanced platform for the achievement of systematic efficiencies through reduced duplication of effort in areas such as library services, courseware development, course delivery, learner support and administrative services.
The new technologies are also creating competitive global markets in higher education services. To respond effectively to this challenge, Australian universities will need to be world-competitive.
Over 90 percent of Commonwealth funding to universities is delivered in the form of one line operating grants. This means that universities themselves bear the prime responsibility for effectively applying technology to their activities. The sheer pervasiveness of the impacts of the new technologies pose difficult management challenges for established, large and diverse organisations such a universities. Staff and students need to be trained, capital and equipment requirements need to be revisited, and organisational structures and industrial agreements may need to be modified. To be effective, the changes need to be made in a way which is both cognisant and respectful of the organisations' cultural norms and the hopes and fears of its staff.
There are no magic formulae. Different solutions will be appropriate in different contexts. Everyone is on a steep learning curve. We hope that this study will provide an indication of how effectively universities are coming to grips with this challenge at the present time. We hope also that it will highlight successful approaches that might serve as useful models for other universities.
(Source: DEETYA Advisory Committee)
It is easy to be overwhelmed by the sheer complexity of the management task facing universities. Organisations have always attempted to manage complexity by various structural mechanisms-creating a division of labour, specialisation and standardisation, departmental structures, and by utilising technology, skilled people and management control systems. These mechanisms become more elaborate as the internal and external environments become more complex.
Universities face a very complex and rapidly changing environment with multiple powerful stakeholders, some of whom have conflicting agendas. They also carry a history of certain value systems and traditions which often clash with stakeholder expectations. In a sense they are expected currently to be everything to everyone-provide high quality teaching and research, provide a better education to more students with fewer resources, meet government regulatory requirements, as well as develop innovative solutions to community problems.
The scale of the challenge is daunting. In the current study, consider what is required to effectively manage only the staff development needs, to ensure that all staff are adequately skilled to meet the demands of IT-based teaching and learning. The discussion in Chapter 3, with its analysis of the strengths and weaknesses of integrated, parallel and distributed approaches to staff development, shows the complexity of this issue. When combined with the scale of the numbers involved and the rate of change of technical knowledge, it would seem to be somewhat like painting the Sydney Harbour Bridge. Before you complete the task, you need to start again at the beginning.
If at the same time, the university needs to change structures and management processes to meet the requirements of new technologies in delivering and administering higher education, then the complexity appears to increase quickly and probably exponentially. In addition, universities are operating currently in a context in which funding is declining significantly and so resources to fund a strategic change program are hard to find. What universities need is a way to simplify this complex set of management challenges, in order to enable action.
Chapters 2, 3, 4, and 5 in this report examined the management of technology issues facing universities with regard to strategy, roles and skills, management processes and structure. Each chapter took one of the pairings of technology with another element of the MIT90s framework, and described and analysed the management issues associated with each. They are briefly reviewed above. It would normally be assumed that proceeding to undertake a combined analysis of all five elements together would increase the complexity in a more than additive fashion, in which case their management would be intractable.
Certainly, treating the issues as if they were independent, so that managerial action on each could be decoupled from the others, leaves the universities managing a very complex strategic change program. And this implicitly assumes that they can solve, for example, the conflict between the professional and machine bureaucracy within a university, which is currently an unresolved theoretical problem. Furthermore, there is no methodology for prioritising and ordering the multiple components of the resultant change program.
But what if the expected increase in complexity when we examine all five elements together does not occur? What if the reverse is true? Here we utilise the concept of fit introduced in Chapter 1 to show that when these five elements form congruent and reinforcing patterns of relationships, they represent organisational gestalts which have the capacity to simplify management problems and provide a tight focus for action. The counter-intuitive insight is that when the issue is analysed at a sufficiently high level of complexity, and the interdependencies among elements are considered, then under certain circumstances, the problem becomes tractable.
The question is what are the circumstances? The answer is the achievement of tight fit. The argument is as follows. When tight fit has been achieved, the management problems of running a university, including managing the strategic aspects of IT, are simplified. Recall, in Chapter 1 we presented the four steps by which simplicity is reinforced in a virtuous circle. This empowers the university to act. In contrast, in the absence of tight fit, it is as if the gestalt has been decomposed into its sub-parts, and each may 'pull' the university in a different direction. Then the management issues are experienced as very complex and intractable.
One more key theoretical assumption is needed to complete the analysis. This is that there are a limited number of effective organisational gestalts or configurations, which are labelled ideal types. These ideal types could be visualised as constellations in space, with considerable gaps between them. The fit of an organisation can be assessed in terms of its 'distance' from the appropriate ideal type configuration. The appropriate configuration will depend on the contingencies facing the organisation such as environment, age, size, capabilities, and strategic intent (Doty & Glick 1994; Van de Ven & Drazin 1985). As environments change, new configurations emerge which begin to replace the old organisational forms which fitted earlier environments. It is important to recognise that new successful configurations often emerge rather than being specified and known ex ante. Indeed, the creation of a new ideal type, the articulation of a new pattern of strategy, structure, management processes, roles and skills, and technology, can result in performance which in sporting circles merits 'Hall of Fame' status (Miles & Snow 1994).
As we saw in Chapter 1, with very different histories and therefore different characteristics, such as age, size, reputation and location, universities compete differently. While it would be theoretically possible that, with the increasing importance of technology, there could be a convergence across the universities, the likely outcome is the reverse. This would certainly be the case if the government continues to deregulate the higher education sector.
Recall the combined effects of technological change and deregulation in the banking sector since the early 1980s. The four major banks are less like each other, particularly in terms of their international business, than they were before. Furthermore, other new banks such as Advance Bank and Bank of Melbourne are now successful. There have also been a number of mergers with more predicted to follow the Wallis Inquiry. The key characteristic has been an increase in diversity and differentiation, to be accompanied by rationalisation. That is also likely to be the case for universities.
For universities, the environment is also shifting, which has placed the traditional professional bureaucratic form under considerable strain. There are increasing requirements for innovation and improved quality, shifting demand for tertiary study and qualifications, government pressures for efficiency, as well as increasing competition in an environment of rapid technological change. In the face of these pressures, the old organisational form which fitted a stable, regulated environment, is barely coping. For example, an inspection of the group of eight reveals that many have restructured or are restructuring in response to these pressures. Those universities who are first to find and adopt a new effective form, have the potential to gain considerable advantage. They will not try to do everything. They will build on their strengths and existing capabilities to compete in new and focused ways.
Assuming this to be the case, each university should attempt to find and adopt a form in which their strategy, structure, management processes, roles and skills and technology support each other and are tightly interdependent. Such tight fit would simplify the complex managerial environment. Once the characteristics of any three elements are set, this effectively determines the status of the remaining two elements. They are defined by the dominant logic underlying the fit. But because universities have different histories and competencies, and face different environments, their 'solutions' will be different. The competitive forces for differentiation will therefore be strong.
Perhaps fortunately for the universities, as we note above, there is not an infinite range of options or ideal types from which to choose. In this report we have identified three models that are emerging and which universities could adopt as they move to develop new ways of managing and competing into the next century. Other forms, such as a highly focused niche player with product development outsourced, are likely to appear.
Traditional studies of 'the impact of IT' examine technology in relationship to a particular organisational dimension. In a sense, the preceding chapters have done that for different aspects of the university. Here, we adopt a different perspective. In seeking to integrate our findings, reduce complexity and thus enable management action, we focus on the organisational configuration as a whole. Technology is integral to this configuration, but does not necessarily drive it.
It is the form of fit or the dominant logic underlying the configuration that provides the focus and simplicity which enables management action. It also determines the appropriate use and management of technology. Thus IT enables the university to reach its goals, and these are different depending upon the configuration adopted. For example, IT will be integral to the success of the 'new' university model-it will be central to and critically underpin their strategic agenda. In the 'divisional' form, IT will be important in enabling the success of the autonomous faculties. In the 'old' university form, IT will enrich the learning community. To help the reader understand these three models, and the paths that universities are following as they implement them, we redraw the MIT90s framework to show technology (IT) at the centre of the five elements. This not only reflects this report's focus on the relationship of IT to the other elements, but more importantly, allows us to conceptualise IT's role in both top down and bottom up management of change. Figure 8 shows the redrawn MIT90s framework, with two triangles illustrating the top down and bottom up dimensions.
Figure 8: Top Down and Bottom Up Management of IT Change
Source: adapted from Craig & Yetton, forthcoming 1997
The strategic change and business process reengineering (BPR) literature typically focus on the top triangle, comprising strategy, technology and structure, as the source of major strategic gains, taking an essentially top-down approach. This conventional model is described in Chapter 1 and presented there in Figure 2.
At the same time, the issues about managing change that authors identify as needing resolution lie in the bottom triangle - technology, management processes and individuals' skills and roles. However, because most of the practitioners come to the table with a mind-set of 'step one, design the top triangle; step two, implement the bottom triangle,' the difficulties that arise in relation to the bottom triangle are seen as implementation problems which occur after the event, and therefore as a nuisance factor rather than being central to the process.
Much IT-based strategic change, however, involves altering the competencies of the organisation-and these are found in the bottom triangle. So as well as considering the organisation's strategic position (the top triangle), change requires careful attention to reconfiguring the bottom triangle. In fact an integrated top down and bottom up management of IT-based change is required (Craig & Yetton 1997). Below we use this schema to discuss and elaborate the three different models identified in Chapter 2 as strategic options for universities undertaking IT-based strategic change.
The 'new' university with subsidiary model essentially creates a new 'bottom triangle' by undertaking its innovative IT-based development in a separate, centrally resourced unit, and building new core competencies in that unit. Its two growth options are either to grow the new unit until it gradually becomes the dominant activity on the campus, or to retain it as the source of innovation and skill development, while spreading the new modes of working into the faculties of the main campus. IT-enabled teaching and learning, designed to deliver quality and reliability to a large number of students, is the key driver in this model. In such a 'greenfield' site, highly skilled experts can be selected as required, with a focus on the ability to work in multi-functional teams. Management processes can be designed which reinforce team performance in defined areas, and utilise project management methodologies. Top management positions and reinforces the unique characteristics of the subsidiary, while 'protecting' it from the control systems and processes of the parent.
The 'old' university model, based on maintaining the established base while funding independent new ventures, creates a number of small 'bottom triangles' constituted by unique and different competencies (technologies, skills/roles and management processes). Successful ventures can continue to grow, while also where appropriate 'feeding' the established university campus with their innovations in teaching, learning and research. As is the nature of risky new ventures, a number are likely to fail and will be removed from the portfolio. In this environment, the ownership of a strategic initiative by the university could vary from 100 per cent to as low as 20 per cent. The 'ventures' would have the ability to select the appropriate expertise with few constraints, including terms and conditions of employment, and high status risk takers and innovators would self-select into this domain. Management control systems would tend to focus on outcomes rather than processes, and could draw from venture capital firms for ways to evaluate and manage the risk and return of their portfolio of investments in 'intellectual capital'.
The 'divisional' model, with its devolved powerful faculties supported and enabled by a central infrastructure, has several large 'bottom triangles', each with a slightly different strategic focus. These are linked into the 'top triangle' through the infrastructure. This form is more complex to manage given its scale, but relies on the focused innovation and particular competencies of its academic divisions to manage and limit that complexity. Each division would have its own IT support, and to some extent develop its own appropriate set of technologies, management processes and skills and roles, which focus on the division's core competencies in particular areas of applied research and teaching. So the IT support unit experts would develop a similar focus within the faculties, but with significant variation in these units occurring between faculties.
We speculate that another aspect of differentiation among these three models is that the first would seek to access global platforms to improve its performance, the second would seek to leverage the expertise of its high performing individuals, while the third would seek to leverage the expertise of its high performing faculties (divisions).
The above discussion explains how universities can use IT both efficiently and effectively to create value for the community in different ways. If the models outlined above do create a very focused organisational gestalt which simplifies formerly complex organisational and management demands, then they should also help to resolve the complexity of the issues raised in Case Study 10, which formed the context for this study. We therefore briefly examine these issues in the context of the configurations underlying these models.
Six issues are presented in Case Study 10. Two of these - namely, duplication of effort and access and equity - concern how the higher education sector as a whole has responded to government policy and other initiatives in these areas. The other four issues belong more to the domain of the individual university and how it competes and differentiates itself. These are the training of staff and students in IT, the need for new organisation structures to manage and coordinate IT, the integration of capital investment in IT with initiatives in these previous two areas, and the general requirement that strategic IT-based change should both take cognisance of, and be respectful of, the organisation's culture and the hopes and fears of its staff.
Higher Education Sector Outcomes
Given the theme presented here that universities are differentiating themselves as they compete, we would expect that they will respond both in different ways and to differing degrees to government policies. In general, old universities are likely to be in high fit with government policies of long standing, and therefore be oriented to delivering on these at a high level. New universities, on the other hand, are more likely to be in high fit with more recent government initiatives, which shaped the environment in which their own strategies were formed. While all universities need to satisfy the government's policy agenda, their different competitive advantages will result in differential contributions.
IT...can facilitate the delivery of education to regional Australia, into the workplace, to people with a disability, and to other groups unable readily to reach a university campus.
(DEETYA Advisory Committee, Case Study 10)
There have been long term shifts in government policy concerning access and equity issues, to which all universities have to respond. Some will be in a position to be more responsive than others, however. That is, for some it is a central agenda, while for others it will be more marginal. The 'new' university, as expected, best meets the policy goals of increased access and equity. This is a central goal of the 'new' university's strategy, and one powerfully leveraged by IT. Such universities are geared to maximise access and equity, with their focus on developing platforms providing education 'anywhere, anytime' to a large and broad group of clients.
In contrast, for the 'old' university, this is an agenda on which it seeks to satisfy rather than maximise its performance. For example, scholarships are offered to ensure that wealth is not a dominant factor in determining access for the best and brightest. The 'divisional' university sits in between these two groups, and implements a number of initiatives to ensure access and equity criteria are met. It will maximise access and equity but only for those sectors which are its key stakeholders. In this way, differentiation among universities leads to some of them specifically using IT to meet the requirements for access and equity.
[IT] can also provide an enhanced platform for the achievement of systematic efficiencies through reduced duplication of effort in areas such as library services, courseware development, course delivery, learner support and administrative services.
(DEETYA Advisory Committee, Case Study 10)
One of the ways in which tight fit creates the experience of simplicity rather than complexity is that it identifies what is strategically important. Or, in addressing the issue of duplication, what is not strategically important. As such, it is possible for a university in tight fit to identify what is core and what is non-core to how it competes. Recall, a university needs only to do a few things best and the rest very well to succeed. In contrast, a university in weak fit finds it difficult to agree on the core/non-core distinction, although some activities may be identified as non-core by all.
It is therefore likely that successful universities will be able to identify a number of non-core activities where the scale and scope effects obtained by outsourcing would raise performance (and/or lower costs). Such outsourcing may initially be to another university. Even if no benefit is obtained in terms of cost reduction, outsourcing reduces complexity and enables senior management time to be re-allocated from non-core to core areas of focus. The benefit, then, is that effort is not spent on areas in which the university does not have a specific competence - enabling specialisation in the areas where the university adds value. This is an example of how a tight fit can be self-reinforcing.
It is possible that what for one university is non-core, is a core activity for another. Libraries may be an example. The 'new' university cannot compete with the libraries of the 'old' universities which have been built over many decades. Rather than making the required heavy investment in bricks and mortar and books and journals, they could find alternative outside suppliers of library services, including the 'old' universities. This innovative solution is increasingly possible in an age of networked digital information. Already we see some collaboration across libraries. Outsourcing is only one more step.
The above discussion shows how the universities, and in particular those implicitly or explicitly implementing the three models, are responding to requirements of government policy (access and equity) and industry efficiency (duplication). Now we turn to explain how implementing each model simplifies the management of IT-based change as it affects the remaining four issues from Case Study 10:
(DEETYA Advisory Committee, Case Study 10)
These have already been discussed individually, in terms of their interdependence with IT, in Chapter 3 (training), Chapter 4 (capital requirements), Chapter 5 (structures), and, implicitly across all three chapters, but explicitly in Chapter 2 (culture). In line with the argument that it is the gestalt which 'simplifies' the complexity around managing such factors, here the following integrated analysis of these four issues is presented under each ideal type.
The old university has always run an entrepreneurial model based around individual research. The new 'venture capital' culture will build on this, while changing the terms and conditions of employment, and funding separate risks around small groups of high performers who are responsible for their own training needs. These academic entrepreneurs carry some of the risk and share some of the benefits. For the university as a whole, the risk is diversified across a number of initiatives and the portfolio risk is reduced. This scenario assumes that sources of funds for new ventures will not be scarce.
The old university structure always placed a high value on the autonomy of the professional. This will be extended and strengthened, but in an environment where the professionals are held accountable for outcomes, and thus bear more of the risk. Options will be funded on a limited scale, with self-funding success required within a given time frame. This assumes that the investment will be written off in the case of failure. Capital investment costs and risks will be shared with outside organisations. Successful ventures would be expected to grow and attract funds.
The key dimension which simplifies IT-based change for the new university is its small initial scale. When combined with the capacity to select people with the required skills and a motivation to work in an innovative multi-functional team, the resultant management complexity is low. Top management support insulates this unit from the parent organisation's culture which would otherwise complicate its operations. Its structure as a quasi-autonomous unit allows it to create its own internal management processes and utilise a project management style of operation. The latter brings with it capital evaluation processes such as net present value for specific investments. It would operate within its own budget, set and overseen by the centre.
This gestalt partitions what is managed centrally from what is managed at the faculty or divisional level. The general training requirements for the IT infrastructure can be outsourced. The initial set up of IT support in the divisional units is likely to require centrally supported expertise. Issues such as ongoing training and culture would then become the responsibility of the faculties and do not add further management complexity. In this sense, the emergence of IT-based change does not increase the management problem. The overall structure is that of the professional bureaucracy. While the central infrastructure is more important than in that theory, the decoupling of central IT from the divisional IT means that structural conflict is minimised. Finally, the capital requirements are also partitioned. The infrastructure platform is run by utilising falling hardware, software and maintenance costs to continuously upgrade the infrastructure within a reducing budget. At the divisional level, project costing techniques would be used to evaluate investments.
In two of the cases above, the divisional and the old university, the development extends existing elements of their cultures, training programs, structures and investment decision making processes. They are extensions to a known world, and therefore are managerially tractable. The outcomes are increasingly differentiated universities who could not easily change and copy the other. For the new university, it is a new world. But by constraining the scale of the initial operation and maximising the relevant expertise by selection rather than training, the complexity of the problem is also kept tractable. In contrast, for universities in poor fit, the management problems with respect to these four activities will appear intractable.
Competition as it is described in this report takes place at two different levels-between populations or types of organisational forms, and between organisations within a particular population or type. First, ecology theory tells us that organisations adopting a preferred form will tend to dominate that market, as the environment selects the best adapted organisational form (Hannan & Freeman 1990). Second, within the set of organisations adopting a particular form, the firm managing that form well will grow relative to those which manage it less well (Barney 1996). As the three forms identified above focus on different market segments, they would not be in direct competition for each others' core markets. Competition between the universities within these market segments, however, is likely to intensify.
The task for a university, then, at least as argued here, is to discover how they are going to compete, and which form will be most appropriate for them, as they adapt to their changing environment. We have found and described three such emergent forms. Those who adopt one and run with it in a focused way, which builds on their existing competencies, will succeed. Those who try to do everything are likely to fail. Other, different forms are also likely to emerge to serve various niche markets in higher education.
Whatever form they adopt, however, our analysis has two important implications for the higher education sector. One concerns management of human resources, the other concerns the rationalisation of the higher education sector. With respect to the former, the forms of strategic change discussed above all have significant implications for the management of career paths and terms and conditions of employment in universities. Moving to new organisational forms will require a capacity and competence in universities to negotiate new, more flexible staffing arrangements. Enterprise bargaining takes on strategic importance in this emerging context. It would involve a shift in perspective away from the current focus on marginal changes to existing conditions, towards enabling new ways of working. Old barriers between academics and general staff, and demarcations between general staff groups, will lose their relevance in the new team-based, multi-skilled, IT-enabled worlds of higher education.
The second implication is if, as we suggest at least for the 'new' university, higher education becomes a volume-driven game, and given that the market itself will not expand significantly, then this will lead to a rationalisation of the higher education sector. The number of universities competing in this market will decline. For the 'new' universities, and to some extent for divisional universities, success will depend upon their capacity to utilise IT to deliver reliably a quality education to large numbers of students. The problem here is that there is no established 'market for corporate control' for universities. That is, it is not clear how the rationalisation will occur and how the 'merging' and 'buying and selling' will be facilitated. The question is not whether rationalisation will occur, but whether it will be guided and facilitated by government policy to maximise the benefit to the community.
Finally, while the issue of global competition is included in Case Study 10, it was agreed to exclude it from this study. It is appropriate, however, to make a comment on it here. The old university will seek to tap into the global market for research funds. It will also seek to cultivate and develop an international reputation as the Oxbridge or Sorbonne 'Down Under', where students come to work with internationally renowned teachers and researchers. While the terms and conditions of employment will be important, Australia has many lifestyle advantages, and information and communications technologies make other researchers in the virtual network no further away than those in Paris are from London or San Francisco. The global tyranny of distance is now no longer the issue it once was for Australia.
The divisional university will focus on its key stakeholders in the Australian community. These will include areas such as primary industries, mining, medical research and other fields in which Australia is a world leader. By driving to satisfy their most demanding 'customers' or stakeholders, the divisional university will learn to become world class. Globally, it is likely to forge strategic partnerships with leading faculties in similar areas across the world. They will share resources and competencies to dominate their home markets.
Of course, the new university has potentially a good fit with the emerging global market for higher education. It is designed to deliver standardised volume-based education anywhere, anytime, across a broad platform. Here, Australia has the potential basis of a strategic advantage. To operate across Australia the new university must learn to manage tight and loose between its small head office with low overheads, and its geographically spread delivery units. Developing core competencies around this form can enable it to be taken international. It would appear that best practice in these universities has the potential to make Australia globally competitive.
At the commencement of this project, our advisory committee wrote:
There are no magic formulae. Different solutions will be appropriate in different contexts. Everyone is on a steep learning curve. We hope that this study will provide an indication of how effectively universities are coming to grips with this challenge at the present time. We hope also that it will highlight successful approaches that might serve as useful models for other universities.
DEETYA Advisory Committee, Case Study 10
They were right. There is no magic formula. Different solutions are appropriate to different contexts. But the number of viable solutions is limited. Indeed, our case studies identify only three such solutions and how they fit with their different contexts. We assume other 'solutions' will be created.
As universities compete increasingly with each other and with other Australian and international suppliers of higher education, they are all on steep learning curves. As they go up their learning curves, they learn to manage their 'business' more effectively and raise quality. As they go down their experience curves, they learn to manage their 'business' more efficiently and lower their costs.
They do not manage in a static equilibrium world where there is a tradeoff between efficiency or cost, and effectiveness or quality. Rather, they manage in a dynamic world in which they will compete by using IT to increase the quality of their educational services at the same time as they reduce its costs. Those universities in tight fit develop a strategic focus in which goal-directed behaviour is linked to performance, thus creating a virtuous circle of organisational learning.
We are impressed by the efforts of the universities we studied and by the progress they have made. We thank them for their time and for their contribution to this report. Finally, we hope that this report provides some insights about how some Australian universities are achieving their successes so that others may model on them and chase them down their experience curves, and up their learning curves. Or, just maybe, to see differently and change the strategic game yet again.