Ananish Chaudhuri: 'Universities' woes caused by bureaucratic bloat'

Opinion: University strikes across the country in 2022 highlight the need for leaders to look outside the box and ask more questions, writes Professor Ananish Chaudhuri.

I have been following the continuing strikes by staff at New Zealand universities with dismay.

I am not a member of a union and not privy to the details. The basic sticking point seems to be that pay should, at the least, keep parity with inflation. Because otherwise you are effectively asking people to take a pay cut. After nearly three years of pandemic-related disruption and increased workload, taking a pay cut seems grossly unfair.

Clearly, we need increased government funding for our universities. New Zealand's decline on the OECD ladder is due, among other things, to successive governments' being unwilling to invest in higher education, research, and development.

But even with the meagre support, the question remains: where is the bulk of tax-payer money and tuition revenue going?

The answer is that a large part is going towards 'bureaucratic bloat'. Over the past decade or so, there has been an explosion in layers of management. Universities are now rife with Deputy, Associate and Assistant Deans, Provosts and Vice-Chancellors. This is not unique to New Zealand, but is increasingly a global phenomenon.

A recent article in the Harvard Crimson says:

'Harvard is one of the world's pre-eminent universities; surely it has used its billions of dollars of accumulated wealth to primarily invest in its educational program, building an unparalleled roster of top professors, expanding offerings to students, and reducing class sizes. Right? Wrong. Harvard has instead filled its halls with administrators. Across the university, there are approximately 1.45 administrators for every academic employee. When only considering faculty, this ratio jumps to 3.09. Harvard employs 7,024 total full-time administrators, only slightly fewer than the undergraduate population. What do they all do?'

The story is similar in New Zealand, except here, the problem is exacerbated by the abysmal level of our public funding, with New Zealand ranking far below the OECD average.

Ananish Chaudhuri
Ananish Chaudhuri is a Professor of Experimental Economics at the University of Auckland's Business School.

Part of the growing bureaucratic bloat is understandable. Where public funding is concerned, there is increased scrutiny with the introduction of a range of performance metrics and accreditation requirements. This creates an enormous amount of paperwork that someone needs to handle. Academic staff are often unwilling and/or incapable of dealing with this. And even when they are, such performance management implies that they are no longer actively involved in teaching and research.

But equally, universities have fallen prey to this type of bean-counting all on their own.

One expects that universities should be able to implement the high trust model marked by a large degree of trust and reciprocity between management and workers. This is particularly because those who aspire to careers in the education sector are typically more intrinsically motivated than those who gravitate towards corporate jobs.

Yet universities around the world are increasingly adopting the corporate view that workers are motivated purely by extrinsic carrots and sticks. This requires the need for continuous monitoring of workers, including micromanaging all aspects of work and an expansion of managerialism.

More importantly, such micromanagement is costly and there is always the problem of quis custodiet ipsos custodes – who will guard the guards themselves? Now we not only need managers to monitor the workers but more managers to manage the managers and so on.

This level of micromanagement adds little to the institution's bottom line, and employees have responded with vicious compliance, work to rule and 'quiet resignations'.

It is difficult to do things differently from everyone else. But all it takes is for a few leaders to start asking questions.

Professor Ananish Chaudhuri Faculty of Business and Economics

For a long time, vice-chancellors were considered primus inter pares, first among equals, the lead scholar among a community of scholars. But today's vice-chancellors are more like CEOs, with very little connection to the day-to-day research and teaching at universities.

In setting wages for lower-ranked workers, we routinely refer to marginal productivity theory; a worker should be paid approximately what that worker is worth to the institution. However, this argument no longer seems to apply when it comes to the salaries of increasingly higher-paid CEOs.

Universities in New Zealand are expected to maintain a 3 percent operating surplus. During the Covid-19 pandemic, faced with unprecedented loss in revenue from the disappearance of international students, universities surprisingly kept insisting on maintaining this surplus even though the then Minister of Education, Chris Hipkins, is on record saying that the government was not going to hold universities to account over this.

The result was redundancies and/or voluntary retirements among academic and professional staff, implying further reductions in student-facing services.

It is difficult to do things differently from everyone else. But all it takes is for a few leaders to start asking questions. For example, do all course outlines have to look identical? Do all instructors need to follow the same template regardless of their pedagogical methods? Does the grade distribution of all courses have to look the same? And, if not, then maybe the person tasked with ensuring such uniformity can go back to research and teaching. This would lead to smaller class sizes and better pastoral care for students.

This article reflects the opinion of the author and is not necessarily the views of Waipapa Taumata Rau, University of Auckland.

It was first published in the National Business Review on 11 December 2022.

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