The Canadian Journal of Higher Education. Vol. XIV-1, 1984 La revue canadienne d'enseignement supérieur, Vol. XIV-1, 1984 SPECIAL FEATURES / CONTRIBUTIONS SPÉCIALES The Management of University Cutbacks: Politics, Planning and Participation CYNTHIA HARDY* INTRODUCTION Universities in a number of countries are having to come to terms with the issue of decline. Reduced enrolments and lower levels of government funding have brought them face to face with the prospect of cutbacks. The management of retrenchment is rarely an easy process: the additional pressures of increased competition for scarcer resources, coupled with the decentralized nature of universities makes contemporary university administration a great challenge. By integrating research on retrenchment in public and private sectors, as well as in universities, this paper explores some of the issues associated with the management of university cutbacks. It first discusses the nature and significance of decline in the Canadian university system. Then some of the problems are examined: both those provoked by decline generally and those that are exacerbated by the unique nature of universities. Finally, some of the ways in which cuts have been made are presented and critically evaluated. DECLINE IN CANADIAN UNIVERSITIES This section deals with the recent history of the Canadian university system. It contrasts the growth experienced in the 1960s with the beginnings of decline in the 1970s, and discusses the prospects of increased stagnation for the 1980s. The 1960s were a period of rapid growth in Canadian universities. Undergraduate enrolment increased five-fold between 1955 and 1975,doublingbetween 1962/3 and 1969/70 alone. Operating expenditures and graduate enrolments grew by a factor of twelve during this period, while capital expenditure increased 23 times between 1955 and 1966 (Leslie, 1980). The number of university teachers grew from around 5,000 in 1959 to more than 30,000 in 1977/8 (Statistics Canada, 1978). Government spending expanded in line with these trends: from $270 million in 1960/1 to $1.8 billion in 1971/2. The percentage * Faculty of Management, McGill University The author acknowledges the support of the Faculty of Graduate Studies and Research, McGill University 60 C y n t h i a Hardy of total government expenditure that went to education increased from 17.5% in 1964 to 22.2% in 1970, and the universities benefited proportionately more as their share of the education budget rose from 16% in 1960/1 to 24.7% in 1967/8. In 1973, Canada was spending 7.1% of G.N .P. on education, more than most other western countries, and a per capita amount of $397, which was bettered only by Sweden and America (Statistics Canada, 1978). The 1970s, however, saw the beginning of a period of decline. The first fall in student enrolment in twenty years was recorded in 1971 (Leslie, 1980), and although enrolments recovered, they started to level off again in 1975. A significant decrease is expected in 1983 when the dramatic fall in live births that commenced around 1960 starts to affect the university sector (Statistics Canada, 1978). The size of the 18-24 age group, from which 80% of students are drawn, is expected to decline from 3.3 million in 1982 to 2.6 million in 1992, causing a 22% fall in student numbers, from which it may take until the year 2000 to recover (Fleming, 1980). There is some debate about whether declining enrolments will be a significant factor, but some writers argue that most, and conceivably all, provinces will be affected, with Quebec and Saskatchewan suffering the most (Leslie, 1980). Even more important has been the change in governments' attitudes towards education (Langlois, 1980): political and economic factors have transformed a desire for growth into a preoccupation with economy and efficiency (Fleming, 1980; Leslie, 1980; Syndicat Général des Professeurs de l'Université de Montréal, 1980). The result has been: a relative drop in the priority accorded to university education by provincial governments and to university research by the federal government. Indeed the attitude of governments towards expenditures on university education is one of the major differences between the 1960s and the 1970s. Governments which previously encouraged the growth of universities and accepted the consequences in terms of capital and operating expenditures are now preoccupied with the control of costs in this and other service sectors (Evans, 1977: 41). This is illustrated by government expenditure figures that show the percentage going to education falling from 22.2% in 1970 to 16.7% in 1975, and the proportion of that being spent on universities dropping from 24.7% in 1967/8 to 19.5% in 1977/8. The consequence of these factors is that: the outlook almost everywhere is for a contraction in enrolments, a long period of shrivelling financial resources and external pressure to eliminate . . . . 'the redundant, the obsolete and the unnecessary' (Leslie, 1980: 5). Canadian universities are, then, faced with a period of decline.to which they may be forced to respond by making cutbacks, if they have not already done so (Hardy, 1983). In this they are not alone: other countries have similar problems. America, for example, is suffering from similar pressures of reductions in enrol- 61 The Management of University Cutbacks: Politics, Planning and Participation ments and government funding (see Carnegie Foundation for the Advancement of Teaching, 1970, 1973;Mayhew, 1973; Cheit, 1973). British universities have had reductions in student numbers — and subsequent funding cuts — imposed on them (see, for example, the Times Higher Educational Supplement, July 1981, July, 1982). Nor are these problems confined to developed countries — much of South America has had to contend with reductions in government funding (Rebolledo, 1983). THE PROBLEMS OF DECLINE This section examines some of the problems associated with the management of university cutbacks, in terms of both the pressures provoked by decline generally, and the specific difficulties faced in universities. Some writers have argued that the current problems have been exacerbated by the rapid growth that preceded the decline. The very fact that such extensive growth, funded by massive government expenditure, occurred may have made it inevitable that public concern and questions concerning the value of higher education would follow (Bernhard, 1983). The ready availability of funds during that period did not provoke the systematic or efficient allocation of resources that are necessary with declining budgets (Glenny, 1983; Rebolledo, 1983). It was not a period for thinking much about where the money was coming from or the conditions which in later years might be imposed upon the universities in return for continued public support (Leslie, 1980: 5). The result is that expectations, which have been formed during a period of growth, have to be revised and behaviour changed. It is this that makes the transition so difficult: our previously growth-dominated society still tends to define success in terms of expansion;'decline, on the other hand, is often either associated with failure or is perceived as a temporary aberration (Levine, 1978;Whetten, 1980, 1981). The result may be managers and employees who are unprepared for cutbacks, or who believe them to be unnecessary (Levine, 1978; Divoky, 1979; Behn, 1980; Cameron, 1982). Those administrators trying to implement cuts may be faced with inadequate tools and guidance because researchers have also failed to satisfactorily address the problem (Aim et al, 1977; Divoky, 1979; Boyd, 1979; Jick & Murray, 1982; Rubin, 1982). Another problem is that decline tends to result in anxiety, low morale, conflict and stress (Levine, 1979; Biller, 1980; Whetten, 1980, 1981; Cameron, 1982; Rubin, 1982). This in itself can cause conservatism and crisis (see, for example, Hall & Mansfield, 1971; Holsti, 1971; Benveniste, 1977; Dunbar & Goldberg, 1978; Bozeman & Slusher, 1980; Walker & Chaiken, 1982), at a time when innovation and creativity are needed to guide organizations through a difficult period (Bennis & Slater, 1968; Landau, 1973; Hedberg et al, 1976; Starbuck, 1977; Weick, 1977). In fact, the most competent people may be the 62 C y n t h i a Hardy first to leave because they are the most mobile, and resources are too scarce to reward them (Levine, 1979; Rubin, 1982; Whetten, 1980). These problems are compounded by the fact that retrenchment tends to release political activity as interest groups try to protect themselves from cuts. Cutbacks represent a change in the distribution of resources, which in itself can lead to political behaviour as interest groups try to take advantage of opportunities to secure new resources (Pettigrew, 1973; Mumford & Pettigrew, 1975; Mintzberg, 1983). In the case of declining resources the impetus for individuals to fight to protect their share of them is even stronger (Levine, 1978; Hardy, 1982, 1983; Morgan, 1982). In case of a serious resource reduction influencers who have hitherto been able to reach a stable equilibrium . . . who were more or less satisfied with the distribution of pay-offs suddenly find themselves in conflict with each other as each tries to maintain his or her share of a diminished pie (Mintzberg, 1983(a): 435-6). As a result, the probability of political conflict increases (Bardach, 1976; Levine, 1979; Biller, 1980; Levine et al, 1981) as sub-units use their available sources of power (see, for example, Mechanic, 1962; Hickson et al, 1971; Pettigrew, 1973) to block or shape cutbacks (Levine et al, 1981). Political conflict may be all the more likely in universities because of their decentralized structure. The traditions of peer judgement and academic freedom have led to a great deal of power resting at the bottom of the hierarchy (Coleman, 1973; Cohen & March, 1974; Evans, 1977;Cyert, 1978; Mintzberg, 1979; Leslie, 1980), at least in the prestigious research institutions (Blau, 1973). The result has been unwieldy complex structures in which administrators have relatively little power, and where politics is an important ingredient of decision-making (Bucher, 1970; Baldridge, 1971; Baldridge et al, 1978; Manns & March, 1978). METHODS OF CUTBACK IN UNIVERSITIES Given this background of the problems provoked by declining resources, it is easy to appreciate the challenges facing university administrators. Cuts have been made in universities in a number of ways. None of these, however, seems to be completely free of its own problems. The following discussion identifies and examines these methods. a) Across-the-Board Cuts The most common way of dealing with cuts appears to be by cutting all units by the same (or similar) percentage (Evan, 1977; Leslie, 1980; Cameron, 1982), and by institution-wide hiring and pay freezes. Such cuts, which aim to 'share the pain' are often acceptable to the university community because there is a perception of fairness and equity (Levine, 1978; Biller, 1980; Levine et al, 1981). While such a strategy may be politically expedient, and suitable for 'trimming the fat', it can be detrimental to the viability of the institution as a whole because retrench- The Management of University Cutbacks: 6 3 Politics, Planning and Participation ment proceeds by default rather than direction, and 'good' and 'bad' departments are penalized alike (Levine, 1978; Cameron, 1982; Zammuto, 1982). In fact, across-the-board cuts often reward those inefficient departments which have managed to maintain a buffer; lean efficient units are more immediately hit. Furthermore, this method of cutback is particularly inappropriate for large scale budget decreases. b) Arbitrary Centralized Decisions There is a tendency in crises to push decisions upwards (Hermann, 1963; Smart & Vertinsky, 1977); budget cuts may be perceived as crises and, in some cases, this has led to centralized decisions concerning areas and amounts to cut. Overly centralized decision processes in universities have been criticized. Cuts should not be arbitrary and should, instead, be linked to goals and priorities (Green, 1974; Mclntyre, 1977; Farquhar, 1978). Choosing between the different and diverse units that exist in a modern university is a difficult task. The relevant academics are usually judged to be the best qualified to evaluate their area and decide on priorities, and many would question the ability of the administrator in this aspect of academic judgement (Leslie, 1980). Administrators, as ex-academics, will be largely the product of their own specialized discipline and even in that, they may be out of touch with the most recent developments. As a result of their years in administrative position they may have developed value systems very different to those in the academic milieu. Nor have they had, in most cases, the benefits of a professionalized training in administration. Consequently they are often forced to make 'fine decisions about programs in ignorance and at a distance' (Trow, 1975: 8). c) Planned Cuts In an effort to avoid arbitrary decisions, and to help administrators make an efficient allocation of resources, many writers have called for a planned approach to cutbacks (Mayhew, 1979; Porter eta/, 1979; Dube et al, 1983; Richardson & Gardner, 1983). This resembles the image many people have of the private sector in which objective criteria are used to determine which areas should be maintained and developed, and which should be reduced or eradicated. Thus, by virtue of effective planning procedures, accompanied by the increased centralization of authority, resources are supposedly efficiently allocated and the necessary cuts made (Mayhew, 1979; Lutz, 1982). This is not the simple solution it sounds universities are not business organizations characterized by centralized power, formal authority and highly developed planning systems, and there are problems in trying to make them conform to this sterotype. The planning procedures that have been developed are often of little help. (Mclntyre, 1977; Divoky, 1979). Planning-Program-Budgeting (PPB) and ZeroBase-Budgeting (ZBB) have been used with some success, but remain costly timeconsuming exercises (MacFarlane, 1976; Glenny, 1983). Furthermore, there are 64 C y n t h i a Hardy no universally accepted criteria with which to measure the o u t p u t , productivity and importance of the various university departments. Administrators who base their cuts on a particular model will rarely find it legitimizes their choice in the eyes of the professoriate (Rubin, 1980). Educational institutions do not have performance measures that could facilitate judgement of their effectiveness. As of now, there is little agreement about the value judgements which would be implicit in such measures (Cheit, 1973'. 7). Academics may also object to academic choices being made by administrators, and the infringement of their traditional areas of autonomy. Given the power at their disposal, professors may be in a strong position to block or influence cuts. The result could be a political battlefield between the various coalitions of academics and administrators. Another possible consequence is increasing unionization, particularly of the more vulnerable young, untenured staff. Unionization tends to further polarize academics and administrators, and may increase the power of the latter at the expense of Senate (Baldridge et al, 1978; Kemerer, 1983; Mintzberg, 1983(b)). Unions also restrict the flexibility of the university in dealing with cuts by emphasizing the economic improvement of their members, focussing on seniority rather than merit, and restricting the size of the part-time staff (Mayhew, 1979). d) The Participative Approach Some universities have tried to involve the academic community in decisions about where cuts should be made to produce more informed decisions (Godfrey, 1983; Hage, 1983), and create commitment (Eisenberger, 1974; Sargent & Handy, 1974; Berger, 1982). The problem is that given the threatening nature of declining resources, attitudes may be parochial and defensive: a political arena is far more likely to develop than the consensus necessary to formulate effective retrenchment plans (Levine, 1979). En période d'austérité, it faut que certaines choses régressent ou disparaissent. It faut couper. La présente consultation politique demande aux divers groupes concernés d'établir leurs priorités. C'est-à-dire 'dites-nous ce que vous voulez couper'. Il est évidemment peu probable que tout le monde tombe d'accord (Syndicat Général des Professeurs de l'Université de Montréal 1980: 4). COMBINING POLITICS, PLANNING AND PARTICIPATION In summary, it seems that university administrators seeking to formulate and implement cutbacks are beset with difficulties. 'Easy' across-the-board cuts may avoid political opposition but are unlikely to protect the viability and quality of the university in the long run. Centralized decisions may provoke a political backlash from the academic community, and administrators may find themselves The Management of University Cutbacks: 65 Politics, Planning and Participation hampered by inadequate information systems and planning procedures in their attempts to make -informed judgements. Participation seems more likely to produce the 'decisional paraplegics' of which Sibley (1976) talks, rather than priorities and selective cuts based on consensus decision-making. Retrenchment is, then, difficult to carry out: there is not enough budget flexibility to reallocate resources and reward innovations, nor is there enough formal authority to impose cuts (Rubin, 1980). As Cheit predicted in 1973: For colleges and universities, facing the reality of change without growth is doubly difficult. They are complex organizations of professionals. Peer judgement is an essential ingredient for their most important decisions. Administrators are appointed under a corporate theory, but their academic success depends in large part on their ability to lead by a parliamentary model. By comparison the organization problems of business seem simple. Many of the achievements we prize most in our academic institutions can be traced to their decentralized structure. But that form of planning and spending is not well suited to the problem of adjusting programs to more restricted circumstances (p. 7). More empirical research is needed to solve these problems. We need to assess the true costs and advantages of the different methods outlined above, and to evaluate whether different models are appropriate in different circumstances. For example, different causes of decline (e.g. government funding cuts vs declining enrolments) may necessitate different responses (Levine, 1979; Morgan, 1982). Different magnitudes of decline may dictate different strategies - an initial 10% budget decrease may be best dealt with by across-the-board cuts, while a 30% decrease may necessitate selective cuts. Different types of universities may react differently; participation may be imperative in decentralized institutions if a political backlash is to be avoided; other universities may be structured in such a way that a more centralized form of planning is appropriate. 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