DISAPPEARANCE OF AN ALLEGORY: THE ROLES OF ACCOUNTING INTHE ENTERPRISE BARGAINING PROCESS OF A UNIVERSITY

Monir Z. MirDepartment of Accounting and Finance

University of WollongongNorthfields Avenue

NSW 2522 Australia

Phone: +61 2 4221 4007Facsimile: +61 2 4221 4297Email: mmir@uow.edu.au

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DISAPPEARANCE OF AN ALLEGORY: THE ROLES OF ACCOUNTING INTHE ENTERPRISE BARGAINING PROCESS OF A UNIVERSITY

Abstract:Accounting’s role in the enterprise bargaining process is largely seen as facilitating.A large number of studies have provided evidence on accounting’s facilitating rolesespecially on the distributive aspects of the enterprise bargaining process. While thefacilitating roles of accounting has been well argued in various contexts, itsallegorical status in facilitating the enterprise bargaining process disappears if theorganisation is not a profit maximiser and if steered by the political masters in thename of socio-economic reforms. This study explored the roles of accounting in theacademic staff enterprise bargaining process of an Australian university. Themanagement of this university is directly and indirectly steered from the top throughthe Commonwealth Government’s various higher education reform agendas. On theother hand, the union representing the academic staff has ideological obligations topromote its members’ interests leading to a combating relationship with the politicalreformists. Drawing on the political economy aspect of accounting, Burchell et al.’s(1980) framework on the roles of accounting in organisations and society, and theunion heterogeneity and employer equivocality model of Amernic and Craig (1992),this study argues that in such an enterprise bargaining environment the facilitatingroles of accounting not only disappear but also become obstructive to reach asettlement.

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INTRODUCTIONThe focus of this study is the disappearance of an allegory with respect to the roles ofaccounting discourse in the enterprise bargaining process of a university in Australia.The study therefore, also focuses on the poverty of accounting discourse (Chambers1999) in facilitating enterprise bargaining process of a university. Most studies on theroles of accounting information in the enterprise bargaining process have accepteduncritically the role of accounting information as an objective and neutral input in theprocess (Cullinan et al., 1994). This study is essentially concerned with accounting’sfailure to perform its perceived facilitating roles in an enterprise bargaining situation.In addition, this study also has explored the fact that the problems in accounting arepotentially reflections of problems in and of society (Cooper and Sherer, 1984).Accordingly, this study also has explored the socio-political and bureaucraticinfluences leading to such poverty and failure of accounting discourse in facilitatingan enterprise bargaining situation of a regional university in Australia. The case studyis based on a regional Australian university. But the arguments and criticisms raisedapply wherever a university tries to settle its enterprise bargaining negotiation usingaccounting data in an environment where there is an existence of conflict of interestsamong various actors in the higher eduction sector.

In most enterprise bargaining situation the central concern is salary and wagedetermination and increase. As payments of salary or wage significantly affectfinancial position of an enterprise, intervention of accounting discourse becomes verymuch receptive and the role of accounting discourse becomes central in assessing theability to pay in an enterprise bargaining situation (Clark and Craig, 1992; Craig andClarke, 1993). But where the reliability and serviceability of accounting informationis debatable its role in facilitating enterprise bargaining may be problematic as well asdebatable (c.f. Clarke and Craig, 1991, 1992; Craig and Amernic, 1997). For example,concerning the reliability of accounting output, Chambers (1999, p. 242) argues that ifthe inputs are false, or imaginary, or hypothetical, the outputs cannot be factual anduseful. Chambers (1999, p. 244) further argues that there is a discrepancy betweenwhat balance sheet says and what business property is worth. This study argues thatin a doubtful situation on the reliability of accounting outputs the facilitating role ofaccounting information in the enterprise bargaining process becomes problematic aswell as useless. This study also argues that accounting’s facilitating roles disappearand rather become obstructive where there is a presence of debatable enterprisebargaining condition and the presence of conflict of interests due to socio-politicaland bureaucratic influences. The study also argues that the use of accountinginformation in the enterprise bargaining process is also constrained by anorganisation’s nature, position and market condition within the broad sector. Overall,this study argues that accounting information may constrain enterprise bargainingprocess rather than facilitating the process.

It has already been mentioned that most of the studies in the area of accounting’s rolein the enterprise bargaining process were conducted under mainstream positivisticperspectives considering accounting discourses purely as technical and neutralphenomena. As a result these studies are prone to accept uncritically the objectiveand neutral roles of accounting information in the enterprise bargaining process. Todate, a small number of studies in this area adopted non-mainstream perspectives toexplore critically the potential facilitating roles of accounting[1]. Therefore, there is aneed for further research to explore critically the roles of accounting information in

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the enterprise bargaining process through adopting a non-mainstream accountingresearch perspective.

Again, not all the studies among the non-mainstream literature attempted to explorethe roles of accounting information in the enterprise bargaining process in a particularcontext. All actions normally have meaning/s but those meanings can only beunderstood in a context. Hopwood (1983) argues that one may not understand theimpacts and implication of accounting systems without grounding the research in aspecific context. This study is grounded in the context of higher eduction sectorreforms in Australia. Moreover, there is also a dire paucity of studies on the role ofaccounting information in the enterprise bargaining process of not-for-profitorganisations especially of the processes of universities. Therefore, one of thepotential contributions of this study is that it has explored critically and contextuallythe role of accounting in the enterprise bargaining process of a university.

The remainder of the paper is organised into eight sections. Section two and three ofthis paper explains the methodological issues and analytical framework which havebeen adopted in this study. Section four introduces the field of investigation anddescribes the data collection procedures. Section five describes in brief the context ofthe study ie various reform initiatives of the Australian higher education sector.Section six analyses the enterprise bargaining situation at the selected field ofinvestigation. Section seven and eight analyses the roles of accounting in theenterprise bargaining process. The study concludes in section nine which alsoincludes discussion on future research possibilities in this area.

METHODOLOGICAL ISSUESIt is argued that the selection of research methodology in any area of social science isdependent on the researcher’s value based assumptions about ‘ontology’ and‘methodology’. Research in accounting is not an exception. There are researchers inaccounting who viewed accounting and accountants in pure technical terms andpromoted functionalist or positivist paradigms of accounting research. Again thereare researchers in accounting who viewed accounting in an alternative way andpromoted naturalistic and interpretive paradigms of accounting research. Within thislater group of researchers, for example, Hopwood (1983) viewed accountants as notjust technicians practising a technical craft but rather as are subjective constructors ofreality, producing partial and one-sided views of reality. Hopwood (1983) alsoviewed accountants as not simply measuring or reporting reality, but as alsoconstituting reality.There are accounting literature which have emphasised that accounting is not a staticreflection of economic reality, but rather is a highly partisan activity. These literaturedemonstrated that accounting is socially constructed and a subjective reality. Theseliterature also have emphasised that accounting’s essence can be best understoodthrough its impact on individuals, organisations and societies (see for example,Burchell et al., 1980, 1985; Hopwood, 1984; Morgan, 1988; Morgan and Willmott,1993; Miller, 1994; Tomkins and Groves, 1983; Hopper et al., 1987; Bougen, 1989;Neimark and Tinker, 1986; Meyer, 1986 and Richardson, 1987). These alternativebeliefs on accounting led to further calls for naturalistic and interpretive research inaccounting and calls for understanding how the accounting techniques andtechnologies are used in particular contexts. Therefore, the mainstream perspective orthe scientific method - wherein the relationships among naturally occurringphenomena are assumed to be enduring, quantifiable, and objectively determinable -

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is an incorrect paradigm that limits the perspectives for undertaking accountingresearch.

Considering all these, in this study it is decided to gather and analyse data throughqualitative research strategies in order to obtain an interpretive and experientialunderstanding of the role of accounting information in the enterprise bargainingprocess in an Australian university. Therefore, this study used a single case withstrong naturalistic and interpretive interests and adopted a framework that hasaddressed the social and political aspects of accounting craft to interpret and analysedata. The analytical framework is discussed in the following section.

ANALYTICAL FRAMEWORKIn this study, the conceptual framework on the roles of accounting in organisationsand society put forwarded by Burchell et al. (1980) is adopted to analyse the rolesaccounting information in the enterprise bargaining process. The framework, amongother things, emphasised the roles of accounting information in the political processeswhich characterise organisational and social life. In order to obtain specific insightson the role of accounting in collective bargaining in this study, Burchell et al.’sframework is supplemented by the “employer equivocality and union heterogeneity”model put forwarded by Amernic and Craig (1992).

Based on the understandings of the decision making in organisations formulated byThompson and Tuden (1959), Burchell et al. explored how does accounting relate tothe computational, the judgemental, the political and the inspirational decisionsituations. Accordingly, on the basis of low or high uncertainty over theconsequences of organisational action and objectives, Burchell et al. pointed out fourroles of accounting, which are, answer machines, learning machine, ammunitionmachine and rationalisation machine (see Figure 1).

[Take in Figure 1]Burchell et al. argued that when there is low uncertainty over both the consequencesof organisational action and the objectives for action, accounting system can serve as‘answer machines’ providing the simple investment appraisal methods, stock controlsystems and credit control routines. In a situation where objectives are clear butcausation is uncertain accounting systems can serve as ‘learning machine’ providingassistance in an organisational decision support system which includes what-if modelsand sensitivity analyses. Burchell et al. further argued that in a situation where thereis uncertainty or disagreement over objectives but there is relative certainty overcausation then the values, principles, perspectives and interests of the organisationalactors will conflict. In such a situation the standards for appraisal and criteria forguiding the organisational task become problematic. They went on to argue that insuch a situation political processes are important in the decision making process andmodes of accounting can arise as ‘ammunition machines’ by which and throughwhich interested parties seek to promote their own particular positions. When there ishigh uncertainty over both the consequences of organisational action and theobjectives for action accounting systems can serve as organisational ‘rationalisationmachines’ through which attempts are made to legitimise and justify organisationalactions that already have been decided upon.

The strength of the Burchell et al.’s framework is that they identified and illustratedthe non-instrumental roles of accounting. That is, they felt that in addition toproviding information for the organisational decision making accounting information

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is also both a means and product of internal organisational conflicts over resources.Burchell et al. in their paper also have emphasised the political economy aspect ofaccounting by suggesting that accounting information have an ideological function inthat it is used to legitimise particular activities or rationalise past behaviour. One ofthe features of the political economy approach of studying of the roles of accountingis that it should focus on the effects of accounting reports on the distribution ofincome, wealth and power in society (Cooper and Sherer, 1984, p. 218). Cooper andSherer (1984, p. 223) argue that research into accounting’s ideological role may takethe form of investigating which interests in the economy are bolstered and whichinterests are undermined. The distributive aspect of the income and wealth in thesociety has got linkages with the distributive aspect of the enterprise bargainingnegotiation.

As mentioned earlier, Burchell et al.’s framework is supplemented by anotheranalytical model on “employer equivocality and union heterogeneity” put forwardedby Amernic and Craig (1992) (see Figure 2). The reason is that, although Burchell etal.’s framework is a powerful lens to explore the non-instrumental roles of accounting,it does not say directly anything about the roles of accounting in a collectivebargaining situation.

[Take in Figure 2]By referring Daft and Lengel (1986) Amernic and Craig argue that the degree towhich a particular collective bargaining environment is characterised by diffusion,unclear, ill-defined, muddled and confused lines of responsibility and authority iscaptured by the label “equivocality”[2]. Amernic and Craig argue that in equivocalenvironments characterised by an adversarial relationship between competing groups(such as union and management) the enactment of a shared interpretation is notachieved easily. Again, concerning on the ‘union’ side of the bargaining, Amernicand Craig argue that not all unions are homogeneous monoliths, but ratherorganisations on their own right, with their own organisational interests internalconflicts and coalitions. Amernic and Craig argue that in a highly heterogenous unionenvironment union leadership has strong incentives to attempt to achieve equilibriumamong its constituents, particularly by choosing appropriate bargaining agenda andtactics.

Amernic and Craig argue that within these differential degrees of employerequivocality and union heterogeneity, accounting finds interesting roles. Accountingdata may not be relied upon exclusively for decision-making purposes. Ratheraccounting data may be created, hidden and argued about for the purpose of creating aframework within which to legitimise the social dialogue between union andmanagement. Therefore, based on the degree of employer equivocality and unionheterogeneity, Amernic and Craig propose that in an environment of high employerequivocality and high union heterogeneity, accounting concepts, measures andmethods are likely to become the focus of debate and no single accounting measurebecomes indisputably correct (see cell 1, Figure 2). In an environment of lowemployer equivocality and high union heterogeneity, both side use a commonaccounting as means of dialogue (cell 2, Figure 2). In an environment of lowemployer equivocality and low union heterogeneity, the union will ignore accountingdata but the employer will not (cell 3, Figure 2). In an environment of high employerequivocality and union heterogeneity, each side has an incentive to select the mode of

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accounting which is in their best interests and arguments about what constitutes thebest mode of accounting will be very intense (cell 4, Figure 2).

The strength of the model of Amernic and Craig is that their hypotheses are directedtowards not-for-profit organisations. Therefore, this model is an appropriate model toexplore the role of accounting in the enterprise bargaining process of a university.The connection between the frameworks of Burchell et al. and Amernic and Craig isthat high uncertainty over the consequence of organisational action and objectives foraction lead to a high degree of employer equivocality in an organisation. Therefore,the model of Amernic and Craig could be complementary to the framework ofBurchell et al. to explore the non-instrumental roles of accounting in collectivebargaining.

THE FIELD OF INVESTIGATION AND DATA COLLECTIONThe field of investigation for this study is the University of New England (hereafter,UNE), Australia and the case is the academic staff enterprise bargaining process ofthe UNE. The UNE is one of the 38 Australian universities and was originally formedin 1938 as the New England University College, a College of the University ofSydney (UNE Handbook, 2000). It became fully independent in 1954. The UNE hasfour faculties incorporating 18 teaching schools with about 495 academic members ofstaff. In 1999 enrolments in undergraduate and postgraduate courses of study at theUNE numbered 13,112 external students and 3,639 internal students (UNE Handbook,2000).

Marginson (1999) categorised Australian universities into five groups, namely, theSandstones, the Redbricks, the Unitechs, the Gumtrees and the New Universities (seeTable 1). The Sandstones are the oldest universities in each state founded beforeworld war one. The ‘Sandstones’ claimed leadership in research, the academicdisciplines and professional training. The Redbricks were created in the ‘secondwave’ after world war two and grew quickly to become as strong or nearly as strongas Sandstones. The Gumtrees began between 1960 and 1975. The ‘Gumtrees’ drewback from a distinctive pitch of their own, either individually or as a group(Marginson, 1997a[3]). The Unitechs grew out of the large institutes of technology.The new universities were founded in the last decade.

[Take in Table I]Marginson (1999) has placed the UNE under the category of ‘Gumtrees’ andmentioned that the UNE has always been confined by its regional role. Although theUNE is categorised under the classification of ‘Gumtree’, perhaps it is the onlyUniversity which shares characteristics of other classifications. For example, it is oneof the oldest universities in Australia and was created in the “second wave’ afterworld war two. This characteristic takes the UNE close to the category of ‘Redbricks’.Again the UNE shares characteristics of some of the ‘New Universities’ in terms of itsspeciality in distance education and regional status (Marginson, 1999).

Although the UNE is regarded as one of the regional universities, it actually is uniquecompared to other regional universities of Australia at least on one aspect. That is, allother regional universities in Australia (eg. Newcastle, Wollongong, Deakin, LaTrobe) have got close proximity to a metropolitan city which has given them theadvantage of metropolitan-wide and state-wide catchments like ‘Sandstone’ or‘Redbrick’ universities. Whereas, the two big metropolitan cities of Australia ie.Sydney and Brisbane are on average 500 km away from the main campus of the UNE.

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Because of this regional problem the UNE is in a disadvantageous position to attractschool leavers for enrolment. As a result it is in a disadvantageous position withrespect to attracting private income which has made the UNE highly dependent ongovernment assistance. The NSW division of the National Tertiary Education Union(NTEU) has already addressed this problem relating to the UNE’s regional statussaying that:

The “Costello Doctrine[4]” has been adopted by the Vice-Chancellor (ofthe UNE), Professor Ingrid Moses, and her senior management team. Ifthe “Costello Doctrine” reflected a deep-seated contempt for regionalAustralia, the “Costello-Moses Doctrine” reveals the same for the NewEngland Region. As government and other services abandon regionalAustralia, the New England region is to suffer additionally from its largestemployer a loss of purchasing power, and the inevitable deterioration ofan internationally recognised university. (NTEU NSW Division,Occasional Address, 2000, p.1)

This low base of private sources of income combined low non-current asset base haveimpacted on the negotiation process of the current third round of academic staffenterprise bargaining process of the UNE.

Data collection for this study began immediately after the UNE branch of the NationalTertiary Eduction Union (hereafter, NTEU) placed its Log of Claims to the UNEmanagement on August 1999 to start negotiation and the enterprise bargainingprocess. Data collection continued till October 2000. Data for this research weregathered from various sources. These are as follows:

i. the minutes of the all the enterprise bargaining meetings; ii. e-mail correspondences through which the NTEU enterprise bargaining team

and the UNE management enterprise bargaining team communicated with theacademic staff;

iii. various handouts and bulletins distributed by both the enterprise bargainingteams;

iv. official documents relevant to enterprise bargaining supplied by the managementof the UNE to the NTEU enterprise bargaining team and vice versa.

v. enterprise bargaining related financial calculations, exercises and documents ofthe UNE branch of the NTEU;

vi. interviews with most of the members of both the enterprise bargaining teams anda number of NTEU academic staff members selected on the basis of their openparticipation in the enterprise bargaining settlement debates on variousoccasions; and

vii. observation through attendance in the NTEU sponsored and UNE managementsponsored enterprise bargaining related meetings for the staff and NTEUmembers.

Minutes of the enterprise bargaining meetings were collected from the respective webpages of the enterprise bargaining teams. All the e-mails (since the submission ofNTEU log of claims) from both the NTEU enterprise bargaining team andmanagement enterprise bargaining team to the staff concerning various issues onenterprise bargaining were collected.Observation data came from variety of ways including attendances in the NTEUgeneral meetings, NTEU special meetings on enterprise bargaining issues andmeetings of the Vice-Chancellor with the academic staff. The use of accountinginformation in the discussion processes of these meetings were carefully observed and

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recorded. All notes were recorded with appropriate references to date, time, place andthe participants.

The primary interview method used was unstructured and open-ended. Interviewswere focused on various issues including the impact of higher education reforms inAustralia and overall role of accounting technologies in the enterprise bargainingprocesses of the universities. Interviews were conducted as a free rangingconversation and issues raised by subjects were pursued. The collection of theinterview data varied from interviewee to interviewee depending on his/her role in theenterprise bargaining process of the UNE. Wherever allowed, the interviews weretape recorded and transcribed word for word. Those who wanted a draft of thetranscripts were sent them for their comment and review. Multiple interviews wereconducted with some research subjects depending on their discussions in the firstinterview. Profiles of the interviewees are provided in Appendix 3.

AUSTRALIAN HIGHER EDUCATION SECTOR REFORMS AND THEINTRODUCTION OF ENTERPRISE BARGAININGThis section highlights the context of this study i.e. the various policy reviewsconcerning the higher education sector reforms in Australia. Policy reviews in theAustralian higher education have varied history. There have been a great number ofreviews of Australian higher education conducted since the second world war[5].Some reviews are genuine rethinking in which the outcomes are not known inadvance or otherwise determined by the government. On the other hand, somereviews are pressured heavily behind the scenes, or pre-empted by premature policyannouncements (Nicholls and Marginson, 1996, p.2). However, it was during the lastten to fifteen years in which the Australian higher education has undergone majorchanges to its structures, funding and student participation. Universities acrossAustralia are now busily re-positioning themselves in a new environment of fees forstudents, decreased public funding and increased commercialisation (Gale, 1997, p.106).

This new era began with the 1988 White Paper distributed under the aegis of thenEducation Minister John Dawkins. Minister Dawkins abolished the ‘binary system’which was introduced in Australia during 1960s as recommended by the MartinCommittee in 1965. Minister Dawkins encouraged through a blend of pressure andcoercion, the amalgamation and merger of colleges and universities. The result wasthat, by 1994 the 19 universities and 69 college of higher educations existed under thebinary system merged into a single system of 36 universities. In addition to theamalgamation and upgrading of universities, several other features of the post-WhitePaper university system have particularly influenced the success of the Australianhigher education enterprise bargaining (Evatt Foundation, 1994). These are, the rapidgrowth in student numbers; the rise of entrepreneurial university; the widening gapbetween institutions; and decreased government funding.

These changes and reform initiatives are not beyond criticisms (Coaldrake, 2000;Williams, 2000; Brett, 1997; Marginson, 1997a; Marginson, 1997b; and McCalman,1997). It has not been easy time for universities or their leaders to face changes.Several Vice Chancellors found themselves receiving votes of no-confidence fromconcerned and angry staff as steps were taken to restructure and cut programs(Sharpham, 1997). However, it is clear that these reform initiatives especially, theUnified National System required a commitment to more managerial modes ofoperation in the universities leading to increased accountability and reporting.

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As a consequence from the demand of more managerial modes of operation most ofthe universities have developed ‘results-oriented’ management control system.Commercial accounting technologies were also introduced as a tool of result-orientedmanagement control system (cf. Guthrie 1993; Broadbent and Guthrie, 1992)[6].Universities are now relying more on accounting-based information for their variousplanning and policy issues including their managerial modes of operation andenterprise bargaining processes (Coy and Pratt, 1998). Since accounting had becomecentral in creating representations of the Australian universities’ business affairs, it isnow closely allied with a commercially oriented emergent university managementclaimed to be acting in the name of economic efficiency. Again, accountants in theuniversities have emerged as major figures in the task of ‘capacity to pay’ – thefundamental point of the enterprise bargaining process of the Australian universities.

As an impact of various higher education reform recommendations and initiatives,enterprise bargaining has been fairly widely adopted in higher education since the1990s. Prior to enterprise bargaining, the Industrial Relations Commission anduniversities had responsibility for setting wage levels with the outcomessupplemented by Commonwealth funding. Since the introduction of enterprisebargaining, universities have had to source additional salary increases from internalrestructuring. Universities have been encouraged to find their own sources ofrecurrent funding and have become one of the many public enterprises competing forscarce public money.

Universities in Australia individually began negotiating salary increases for their staffat the end of 1996. The increases are based on the capacity of the university to pay.What is clear is that staff at different universities across Australia will be remunerateddifferently. On the other hand, the government has made its position clear that it willnot supplement university funding for these increases. Universities will have to lookto their current resource base for funding any increases. The across-the-sector,government supported, same-salary increase is gone and market forces will more andmore determine the level of staff rewards. The first round of enterprise bargainingtook place during the year 1994-95 which marked the transition from the system levelof wage determination to an institution-based system. More recent agreementscontain detailed provisions regarding training, redundancy, allowances, disputesettling mechanisms, hours of work and performance indicators and measures(Pickersgill et al., 1998).

The formation of the National Tertiary Education Union (NTEU) in 1993 also tookplace at the time when the university sector was undergoing considerable change(O’Brien, 1999). The NTEU now has coverage for both the academic and generalstaff of the universities. The formation of the NTEU brought together severaldiffering cultures and experiences of its members (O’Brien, 1999). Amongacademics there was a research culture of the traditional universities, as well as theteaching and professional orientation of the former colleges of advanced education.Academics were more likely to be ‘metropolitans’ with some sense of a connection tothe international contexts of various fields of knowledge, although this is more likelyto be stronger in the ‘traditional’ universities. On the other hand, general staff andmany academic staff from the former colleges, were more likely to be ‘locals’ with agreater concern for the particularities of the employment relationship in specificinstitutions (O’Brien, 1999). The next section provides historical anecdotes of theprevious enterprise bargaining agreements of the University of New England anddescribes the current enterprise bargaining situation.

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ENTERPRISE BARGAINING IN THE UNIVERSITY OF NEW ENGLANDThe first round of academic staff enterprise agreement and the general staff enterprisebargaining and agreement of the UNE took place in 1996. That was not a‘professional’ type enterprise bargaining and regarded as quasi-enterprise bargaining.The second round of enterprise bargaining took place in 1997 and the agreement wassettled smoothly and salary levels were increased in accordance with national average.The second round agreement expired on 1 October 1999. The expiry of theseAgreements initiated the commencement of negotiations between UNE managementand the relevant unions for a new enterprise agreement. As a result the third round ofenterprise bargaining negotiation of the UNE with its academic and general staffstarted in August 1999. The Community and Public Sector Union (CPSU)represented on behalf of the general staff (mainly white-collar) in the bargainingprocess. The CPSU were able to reach a settlement with the UNE management. Asthe ‘case’ for the study is the academic staff enterprise bargaining process, the issuesconcerning general staff enterprise bargaining are not discussed in this study.As the starting point of the third round of academic staff enterprise bargaining processthe UNE branch of the NTEU submitted its Log of Claims to the UNE management inApril 1999. The first meeting of the enterprise bargaining between the representativesof the NTEU branch of the UNE and the representatives of the UNE management washeld on 11 August 1999. In that meeting the procedures and protocol for theenterprise bargaining process was discussed and established. One of the importantdecisions that were taken in that meeting was that both the parties would use theirweb pages to communicate to their relevant interest groups. Two teams were formedto represent the NTEU and the UNE management to participate in the enterprisebargaining process. The management enterprise bargaining team (hereafter, MGMT-EBT) is composed of five members with a team leader. The NTEU enterprisebargaining team (hereafter, NTEU-EBT) is also composed of five members with ateam leader. One of the team members of the NTEU-EBT is an Adviser provided bythe NSW division of the NTEU.

The NTEU’s August 1999 Log of Claim includes a number of demands on variousissues including salary increase; employment security; workloads and researchfunding. Although negotiations on the non-salary component of the enterprisebargaining progressed well, the question of the quantum for salary increases remainsunresolved at the time of writing this study report (October 2000). So, the issue of‘salary increase’ has become the major academic staff enterprise bargaining conflictissue at the UNE. Concerning the salary increase issue the Log of Claim demands:

That the salary rates for all NTEU members employed by the Universitybe increased by 7% per annum on the date of expiry of the currentcertified agreement, a further 6% twelve months from the date of expiryof the current certified agreement and a further 6% twenty four monthsfrom the date of expiry of the current certified agreement. (NTEU Logof Claims, http://www.une.edu.au/nteu/)

The UNE management also responded through its Log of Claim by offering salaryincrease of 7% over four years.

That was the starting point of the enterprise bargaining negotiation process.Afterwards, a series of meetings were held between the NTEU-EBT and the MGMT-EBT to negotiate the claims. Both the parties tried to justify their respective claims.Both the parties to the negotiation were heavily involved in creating their images inthe small community of Armidale through public relation spending. In order to gain

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upper hand in this public relation aspect, the NTEU-EBT and the MGMT-EBT eveninvolved themselves in throwing mud to each other. Situation became such worsethat these parties later denied some statements concerning enterprise bargaining madepublicly. A series of industrial actions which included boycotting of lectures andwithdrawal of goodwill were called by NTEU during April and May 2000. On theother hand the management of the UNE tried to defend their position blaming theNTEU for their ‘pressure cooking’ tactics (E-mail by the Vice-Chancellor to the UNEOfficial, 5/5/00).

Revisions of the original Log of Claims of the management were made several timesby the UNE management showing as if new and improved offers were made to NTEU.The NTEU responded to these offers saying that these were unacceptable on theground that the new offers were not significantly different from the original offer ofthe management. During this past one year the academic staff of the UNE have startedto view their Vice-Chancellor as autocratic and have developed the feeling that theMGMT-EBT with the support from the Vice-Chancellor is misusing its power. Whilethe Chancellor of the UNE showed solidarity with the Vice-Chancellor and stronglymentioned her confidence over the performance of the Vice-Chancellor (e-mailmessage from the Chancellor, UNE-Official, 30/6/2000), the NTEU of the UNEbranch has brought a ‘Motion of No Confidence’ in UNE’s Vice-Chancellor. Thegeneral meeting of the NTEU branch of the UNE held on 14 August 2000 expressedunanimously no confidence in the Vice-Chancellor and the senior management of theUNE[7].

On the other hand, the Chancellor of the UNE announced an extended three yearscontract for the Vice-Chancellor with full confidence (E-mail by H. Arthurson onbehalf of the UNE Council, 18/8/2000). Concurrently with the Motion of NoConfidence in Vice-Chancellor, the NTEU branch of the UNE declared some drasticindustrial actions which included the boycotting of UNE’s Open Day and GraduationDay in September and in October. The NTEU also rejected the UNE’s offer of 2%interim payment to all academic staff in return for a moratorium on industrial action to31 December 2000. Afterward, there was an absolute stalemate to any form ofnegotiation between these two parties.

Although the negotiation teams sat together several times after this, there were no newdevelopments in negotiation at the time writing this study report (October 2000).Both the parties to the negotiation are claiming that they are willing to intensifyenterprise bargaining negotiations to reach an agreement. In reality, both the partiesto negotiation are still busy in shifting blames to each other and still trying toconvince the academic staff on the issue of the UNE’s capacity (or no capacity) tofund the salary increase. It is the accounting information which always came into theforefront to prove or disprove the UNE’s capacity to pay situation. Followingsections analyses the roles of accounting information in the enterprise bargainingprocess of the UNE.

THE FACILITATING ROLES OF ACCOUNTING CRAFT IN THEENTERPRISE BARGAINING PROCESS OF THE UNEAll of the actors who were interviewed had the opinions that the enterprise bargainingnegotiation process started with a co-operative manner to reach an agreed solution andthe objective of the negotiation was to allocate scarce resources of the UNE and tomaintain economic viability of the UNE. So, at the beginning there was lowuncertainty over both the consequences of the action and the objectives for action.

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Burchell et al. (1980) argue that in such situation accounting system can serve as a‘learning machine’. In other words, in such a situation accounting systems playfacilitating roles for any settlement of negotiations and activities. Clark and Craig(1992) observed similar phenomenon while investigating the role of accounting indetermining capacity to pay in the context of Australian enterprise negotiation. Theyargue that Australian industrial relations practitioners generally regard enterpriserelated accounting data is critical determinants of enterprise capacity to pay. As canbe seen in the analyses of the following paragraphs, accounting information initiallyprovided answers to the ‘scarce resource’ or ‘capacity to pay’ debate of the enterprisebargaining process of the UNE.

Like any other enterprise bargaining process demands under both the Logs of Claimswere supported using accounting information (see for example, Clarke and Craig,1991; Cullinan et al. 1994). For example, in support of the UNE management’s offerand in response to the claim of the NTEU an e-mail to the UNE-official from the ProVice-Chancellor’s (Research & External) office states that:

It is imperative that the UNE community appreciates fully a keycondition the present financial position makes it impossible to meet fullyeven legitimate expectations, let alone unrealistic claim. Over the twoyears, numerous financial presentations throughout the University havedemonstrated the situation in which UNE finds itself. Liquidity is low,reserves are low, costs are high, and expenditure matches income.(Introductory EB letter to all staff, e-mail to UNE Official from theOffice of the Pro Vice-Chancellor, 10/08/99)

This accounting information-based argument against the claims of the NTEU wereimmediately rejected by the NTEU-EBT by putting forward another accountinginformation-based argument. For example, in response to the Log of Claim of theUNE management the NTEU branch of the UNE claimed that:

The NTEU regards the management salary offer as insulting to the highquality staff who have put enormous effort into assisting the Universityto address its financial situation, a situation that we note is the result ofpast poor management. (NTEU response to UNE Log of Claims, e-mailto UNE Community from the NTEU, 26/10/99)

The root to these arguments and counter arguments to support and validate the log ofclaims has been a phrase titled ‘capacity to pay’. Accordingly, accountinginformation were used significantly in conjunction with the ‘capacity to pay’argument.

During the process of the investigation of the facilitating role of accounting, it hasbeen observed that various accounting and accounting-based information and rhetoricwere used repeatedly in the negotiation process since the inception of the process.These include, ‘annual report’, ‘budget report’, ‘financial situation’, ‘tighter budget’,‘income increase’, ‘expenditure decrease’, ‘financial position’, ‘low liquidity’, ‘lowreserves’, ‘high cost’, ‘matching income with expenditure’, ‘funding for increasedsalary’, ‘retirements of debts’, ‘accountability’, ‘financial health’, ‘budgetary process’,‘budget variance’, ‘payroll costing’, ‘cash flows’, financial gearing and ‘financialtightness’. Table 2 provides a descriptive statistics of the uses and appearances ofaccounting and accounting-based information and rhetoric the current academicenterprise bargaining negotiation process of the UNE.

[Take in Table II]

14

The content of the table indicates the facilitating role of accounting information in theacademic enterprise bargaining process of the UNE. The content of the table not onlyshows accounting’s facilitating roles, but also indicates that accounting informationhas been used as a tool for propagating and reinforcing managerialism introduced inthe higher education sector in Australia. This can be visualised from the commentsmade by one of the negotiating members (MGMT 1) of the enterprise bargainingteams of the UNE:

I think the role of accounting information in our enterprise bargainingprocess is essential and crucial. Twenty or thirty years ago ourUniversity’s EB was centrally administered from the top. EveryUniversity had the same condition. Now we follow decentralised modelwhere we are responsible for our own EB. Like any other Universities inAustralia, the UNE is also working in a competitive environment tomobilise funding. Accordingly, we have changed our whole accountingand budgeting system to be more useful information provider in such anenvironment.

The minutes of the first meeting of the enterprise bargaining of the UNE includedamong other businesses a request from the NTEU to the UNE management to supplythem copies the University annual report from 1996 to 1999, budget and financialreports and other relevant financial information. The management of the UNEimmediately complied with the request. Afterwards, both the parties to thenegotiation used the same accounting database to validate their respective Log ofClaims. Simultaneously, the roles of accounting information in the enterprisebargaining process of the UNE also shifted. For example, as the uncertainty over theeffect of the settlement of the enterprise bargaining negotiation increased, accountinginformation started playing the ‘learning machine’ roles (Burchell et al., 1980) as boththe parties to the negotiation introduced their respective consultants’ analyses in theUNE’s ‘capacity to pay’ debate.

BEYOND THE FACILITATING ROLES – THE POVERTY OFACCOUNTING DISCOURSE[8]From the discussion in the previous section it can be visualised that accountinginformation initially has been playing a facilitating role in the enterprise bargainingprocess of the UNE. But as the uncertainties over both the consequences of theenterprise bargaining settlement and the objectives for action increased (c.f. Burchellet al. 1980) leading to increased employer equivocality (c.f. Amernic and Craig, 1992),accounting information started to make the negotiation process complicated ratherthan to facilitate the process. Following subsections analyse the non-instrumentalroles of accounting in the enterprise bargaining process of the UNE.

Same Bases but Different InterpretationIt has been mentioned earlier that the central argument to this enterprise bargainingprocess of the UNE is the ‘capacity to pay’ argument. The management of the UNEfrom the very beginning of the negotiation process claimed that the UNE does nothave the capacity to pay for salary increase. In order to prove and convince the UNEcommunity, the management of the UNE presented information on low reserves, lowliquidity and high cost of the UNE based on accounting calculations. An open letterby the Vice Chancellor to the UNE community (e-mail to UNE Official 27/3/00)further claimed that upon examination of all the financial reports, documents,statements the NTEU-EBT were not able to say where the additional funds for thesalary increase are meant to come from. NTEU-EBT being an ‘accounting-literate’

15

trade union team quickly responded to these accounting-based claims of the UNEmanagement by circulating a cash flow analysis of the UNE prepared by Head of theUNE’s School of Accounting[9]. The analysis investigated UNE’s cash flows fromoperating, investigating and financing activities and pointed out that the UNE hasgenerated a positive cash flow from operating, investing and financial activitiesduring the period 1996–1999. The cash position of the UNE has increased from$3,566,000 in 1996 to $27,579,000 as at the end of 1999, an increase of $24,013,000.The analysis also demonstrated that during the period of the current EnterpriseBargaining Agreement the UNE had the capacity to meet its operating cash outflowsincluding salary and related costs. The analysis concluded by supporting thepropositions of the NTEU-EBT by saying that:

There is no evidence that the UNE is a financially distressed entity. Theevidence does not support the proposition that UNE does not have thecapacity to pay salary increases in the log of claims lodged by the NTEU.The evidence supports the proposition that management does not have aplan to invest in competitive salaries for UNE staff (EB Bulletin, NTEUBranch of the UNE, May 2000)

This liquidity position analysis by the NTEU-EBT strongly contributed in formingfavourable attitudes of the UNE’s academics towards the salary increase claim of theNTEU. The MGMT-EBT had no alternative other than to refute NTEU-EBT’s claimthrough some accounting numbers. In response to the NTEU-EBT’s claim that thereis no evidence that UNE is a financially distressed entity, one of the members of theMGMT-EBT claimed that:

This is an inaccurate and misleading statement. The correct position withrespect to the University’s financial health is that over the past few yearsthe University has moved from a financially unstable position to one ofstability, however, the University is still heavily constrained due to thehigh level of debt, low liquidity, unfunded provisions OH&S,environmental obligations and the lack of government salarysupplementation. (E-mail by the Vice Chancellor to the UNE Official,8/5/00)

The same MGMT-EBT team member also claimed that:The judgement of the University’s financial health has been made byanalysis of only one financial performance measure ie the cash flowmanagement. It is simplistic to suggest that the financial health of anentity can be judged on cash flow alone. The NTEU-EBT analysis makesno reference to the substantial evidence forwarded relating to theunsatisfactory situation associated with other financial and other financialrelated performance indicators. The analysis also makes no reference tothe evidence provided by the University of the serious concerns expressedby the DETYA’s financial consultant, Arthur Andersen and DeloitteTouche and Tohmatsu about the University’s financial position if thepresent situation changes ie via salary increases. (E-mail by the ViceChancellor to the UNE Official, 8/5/00)

Prior to the cash flow analysis by the NTEU-EBT the management of the UNE soughtan analysis from Arthur Andersen, a consulting firm, concerning UNE’s liquidityposition to meet the salary increase claim. Arthur Andersen expressed its concernover the UNE’s low liquidity position in its report (claimed as independent report bythe UNE’s management) to the Finance Committee of UNE’s Council on 23September 1999. In addition, another consulting firm Deloitte Touche and Tohmatsu

16

was commissioned by the Commonwealth Department of Education, Training andYouth Affairs (DETYA) to provide report on the financial status of Australianuniversities. The UNE management claimed that the report of Deloitte Touche andTohmatsu also raised concerns with the UNE’s financial and liquidity position(although the Annual Report (1998, p. 9) of the UNE contradicts with themanagement claim concerning Deloitte Touche and Tohmatsu’s analysis).

The analyses in the previous paragraphs indicate that based on the same accountinginformation both the parties to the negotiation tried to justify their respective log ofclaims. Accounting figures are constructed and deconstructed by the conflictinginterests in the UNE’s enterprise bargaining process (cf. McBarnet et al. 1993).Amernic and Craig (1992) also observed similar outcome in their study on a Canadianuniversity’s enterprise bargaining case where each side to the bargaining partypursued its own ends partly by selective employment of the array of accountinginformation available. Like UNE, the said university studied by Amernic and Craig(1992) was facing the environment of high employer equivocality and low level ofunion heterogeneity. The UNE management dismissed NTEU-EBT’s analysis andlabelled it as ‘misleading’ and ‘simplistic’ (Campus Review, 2000, May 17-23, p. 2).On the other hand the NTEU-EBT stood by their analysis which was based on thefinancial statements of the UNE, adding that if their analysis was incorrect, so werethe details of the UNE’s financial statements. The NTEU-EBT also proposed aninvestigation of the several areas of the financial statements of the UNE to beconducted by the NSW Auditor General.

As mentioned earlier, the cash flow analysis conducted by the NTEU was in fact, inresponse to the reports of these two consulting firms. In addition, The NTEU-EBTraised doubts about the independence of these two consultants reports especially thereports by Arthur Andersen and claimed that the Arthur Andersen report was a‘custom made’ report. The outcome was that both the negotiating parties were furtherinvolved in throwing mud to each other leading to further stalemate situation of thenegotiation process. While the NTEU labelled the MGMT-EBT as inexperienced andincompetent negotiators the management especially the Vice Chancellor alleged thatthe NTEU is somehow in breach of the University’s Code of Conduct (e-mail fromthe NTEU-UNE branch President to the UNE Community, 21/08/00). This scenarioof the enterprise bargaining negotiation at the UNE exposes the role of accounting asan ‘ammunition machine’ (Burchell et al. 1980) and a ‘propaganda weapon’ (Amernic,1985) through which both the parties seek to promote their own particular positions.This scenario also reminds us that the bargaining parties’ respective views ofaccounting information may do more to shape the nature of the relation between theparties than any other aspect of the bargaining environment (Gotlob and Dilts, 1996)

Poor Input Bad OutputConcerning the reliability of accounting outputs, Chambers (1999, p. 242)) argues thatif the inputs are false, or imaginary, or hypothetical, the output cannot be factual, anduseful, as fact, in making judgements about the past or decisions about the future.The NTEU-EBT from the very beginning raised doubts about the reliability of inputsof the accounting reports of the UNE. For example, and e-mail from the UNE’sNTEU office to the UNE community mentioned that:

We have spent hours, in fact days, going over voluminous budgetarydocuments and being told repeatedly that UNE needs to put itsdiscretionary funds into the physical resources of the University ratherthan its human resources. Holes have been found in the University’s

17

budgetary processes which they (management) have so far been unable tosatisfactorily explain. (E-mail from the UNE’s NTEU office to the UNECommunity, 21/2/00)

In addition to complaining on the holes in the UNE’s budgeting process, the NTEU-EBT also pointed out the inefficiency of the UNE management in managing UNE’sbudget allocations. An e-mail from the NTEU office states that:

Management first treated a salary increase as having the lowest financialpriority in the University and then shaped the budget in terms of thispriority. What management should have done is to work out what areasonable salary rise would be, and then shape the budget in such a waythat there was a capacity to pay for it. (E-mail from the NTEU office tothe UNE Community, 6/4/00)

Concerning the same issue one academic staff (GEN 2) also commented that:The reason for the lack of funds for a pay rise is due to financial factorsthat do not actually appear in the financial records of the UNE. Either(a) these aspects were kept buried deliberately, or (b) they were omitteddue to such faulty accounting that there is no reason to believe the rest ofthe claims being made, or projections being put forth.

Although the above mentioned doubts concerning accounting inputs of the UNE wereraised recently in relation to its enterprise bargaining negotiation process, aneconomist from the UNE named Forsyth raised similar doubts five years ago andcommented that:

The University (UNE) has a weak financial culture. The culture ismanifest in poor accounting, in limited communication of the situation tothe University’s stakeholders, especially the University community,inadequate evaluation of large expenditures, a chaotic budgetary system,and weak incentives for cost centres to save rather than spend. (Forsyth,1996, p. 3)

Again, the UNE’s ‘capacity to pay’ or ‘no capacity to pay’ calculations were alsobased on the liquidity position of the UNE. Accordingly, the accounting calculativedevice the ‘current ratio’ got importance in the negotiation process. As there are nohard and fast rules or standards for a good practice of current ratio, both the parties tothe negotiation put forwarded their own interpretation and standards for the currentratio leading to a stalemate in explaining the UNE’s ‘capacity to pay’ or ‘no capacityto pay’ situation. Similarly, there were confusion concerning the interpretation of thedebt-to-equity ratio of the UNE. The UNE’s debt-to-equity ratio in 1998 is calculatedas 8.8% (EB Bulletin, NTEU Branch of the UNE, 27/4/2000). While the managementof the UNE claimed the ratio as excessive, the NTEU-EBT, by referring an analysis ofthe Commonwealth DETYA, commented that the ratio is by no means excessive (EBBulletin, NTEU Branch of the UNE, 27/4/2000). As a result by using the same set ofaccounting information both the parties to the negotiation were able to support theirrespective arguments concerning UNE’s capacity to pay for salary increase. Generalmembers of the NTEU also have realised the fact that accounting numbers areactually creating problems in reaching a settlement. For example, one of theinterviewees (GEN 3) suggested that:

The main issue is that all parties in the EB committee must come to anunderstanding and agreement about the apparent discrepancy betweenthe numbers being used by the two sides in the argument. Alternative

18

interpretations of the accounting documents needed to be assessed in thelight of the different understandings of the capacity to pay.

Similar concern was raised by another NTEU member (GEN 4) and suggested for anopen debate on the accounting-based analyses of the NTEU and the UNE asaccounting numbers have complicated the negotiation and settlement processes. Boththe parties to the negotiation also have started to realise the fact that a settlement isimpossible solely on the basis accounting-based dialogues. Almost all of therespondents echoed the views that the use of accounting information in the enterprisebargaining process of the UNE is constrained by the UNE’s nature, position andmarket condition within the broad higher education sector in Australia.

Steering From A Distance and the Obstructive Role of AccountingIt should be realised that although the NTEU and the UNE management tried to putforward their cases in the strongest light using accounting-based numbers, the realpicture is lying somewhere else. As has been analysed in the previous sections theseaccounting numbers obstructed the negotiation process rather than facilitating theprocess in the UNE. This section examines the connection of the accounting’sobstructive role in the UNE’s academic staff enterprise bargaining process with thecontext of the study ie the higher education sector reforms in Australia. A briefsummary of the various reforms is given in one of the previous sections. One of theoutcomes of these reform agendas is the creation of new power relations between theprovider and user of resources which influence the enterprise bargaining processes ofthe universities in Australia[10].

Universities in Australia are ‘steered from a distance’ by policy norms of theGovernment and rules of the game (Marginson, 1997b). Marginson goes on to arguethat although there has been some movement recently of the Australian highereducation sector from a quasi-market to a more fully developed economic market,there is no sign of relaxation of government control. One of the ways through whichgovernment steers universities is a metaphorical contract known as ‘educationalprofiling’ (Marginson, 1997b). The educational profile which was introduced in 1988is an agreement between Government and institution that includes institutional profileon teaching activities; student load and graduations; research activities and agreedfunding. By requiring that all institutions prepare their educational profiles on thebasis of a standard format, the Government homogenised not only governmentfunding and accountability but also institutional planning. Each institution’smanagement has to negotiate with the Government concerning its profile with greaterempowerment of the institutional management within the institutions. TheGovernment now shapes both the works of the institutions and the system as a whole.Profiling also allowed the Government to exercise larger influence within eachinstitution than the particular contents of each profile. There is another steeringmechanism which is recently been hanged in front of the university managements.The Federal Education Minister recently has announced a Workplace ReformProgramme for the universities tied with 2% funded salary increase (Bulletin, NTEUNational Office, 2000). To obtain this funding universities have to fulfil a number ofconditions which are nothing but government’s desire for further steering of thehigher education sector.Marginson (1997b) argues that combined with the relationships established throughthe profile negotiations, competitive bidding also enabled the Government to secure aculture of compliance. It is a competition between autonomous institutions forresources, with the game controlled by the central agency. With the help of

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competitive bidding the Government is now able to pick and choose ‘winners’ on thebasis not only of the specific bids, but more informally, on the basis of any criteria itchose (Marginson, 1997b). The relationship between government and institutionalmanagers was based not on identity, but symbiosis. The two levels of management-government formed a common circuit control, in which they utilised each other(Marginson, 1997b). Institutional managers worked within a framework set not byacademics or their institutions, but by government, and imposed this framework onthe heterogenous traditions of the university. As a result university managers wereable to attribute unpopular decisions to government requirements. One of suchunpopular decisions of the university management to meet government requirement isthe enterprise bargaining decision. Concerning the Government’s control over theenterprise bargaining in the universities one academic member (GEN 1) of the NTEUbranch of the UNE commented that:

One of the stupid things about the so-called enterprise bargaining is thatin a sense we are not bargaining with the real bosses who have the money,but we are bargaining with the Federal Government. The Commonwealth(Federal Government) is the main supplier of funds. Obviously it isnecessary that management should try to make them happy.

It has been mentioned earlier that enterprise bargaining has increased significantly inthe higher educations sector in Australia. A Vice Chancellor of an AustralianUniversity noted recently that the most disagreeable aspect of his job was thecombative nature of industrial bargaining, a process that went against the grain ofcollegial traditions (Coaldrake, 2000, p. 18)). One of the respondents (GEN 4)commented that:

The enterprise bargaining issue has become a strong dividing forcebetween the management people and academic staff in the universities. Ifwe look back at the past we will see that ten years ago the bondingbetween university management and the academic faculties were like ‘letus prosper together’. But now it is like ‘let us fight with each other’. Thiswill definitely affect the output quality of our higher eduction sector.

Industrial relations were introduced in the higher education on assumption that thiswill help in productivity trade offs thereby deriving greater operating efficiencies inthe higher education sector. But many of the universities do not have enough funds tosupport significant increases in salaries. On the other hand it appears unlikely that theGovernment will exempt universities from the blanket ban on supplementation ofoperating grants to cover salary increases derived from enterprise bargaining.Universities can charge fees for a variety of groups of students, but they are unable todo so for the great majority of their student body. So, in terms of industrial relations,Australian universities are left in the invidious position of being exhorted to act likebusinesses while being prevented from deriving revenue like businesses (Coaldrake,2000). The Government controls the level of its grants per student including HigherEducation Contribution Scheme (HECS) payments and commitments. So, it isunreasonable to impel the universities into enterprise bargaining on salaries andwages while restricting their control over pricing (Williams, 2000). Concerning thisissue of appropriateness of the enterprise bargaining in the universities, one of theteam members (MGMT 2) of the UNE’s management enterprise bargaining teamsuggested for the centralised system of wage fixing rather than enterprise bargainingand commented that:

Enterprise bargaining in the universities is a fallacy. We don’t havemoney in our discretion like private sector organisations. We can not

20

simply retrench people to save money. Government from the top ispulling the string. In such an environment I think there should be a sortof centralised wage fixing system rather than enterprise bargaining.

A member from other side of the negotiation also raised similar concern. One of thenegotiating team members (NTEU 1) of the NTEU branch of the UNE commentedthat:

I philosophically believe that the benefits of enterprise bargaining in theuniversities are grossly exaggerated. The ideal situation would be acentralised system of allocation to level salaries and then some variationsin local levels depending on the specific needs of the institutions.

The previous paragraphs provided brief illustrations on the Government’s steeringmechanisms on the universities and its management and its effect on the enterprisebargaining processes of the universities. The following paragraph explores the otherside of the negotiation process ie the steering from distance by the NTEU of theenterprise bargaining negotiations of its branches in various Australian universities.The NTEU in Australia provides a decentralised bargaining environment. That is,instead of negotiating centrally with the Vice-Chancellors and with the governmentthe NTEU has stretched its resources over more than 30 sites. The National Office ofthe NTEU also steers from distance its branches through setting a ‘floor price’ (anoverall acceptable minimum) for the enterprise bargaining. Due to such decentralisedenvironment there were instances where the interests of the local activists (branchesof the NTEU at different universities) and members diverged from the overallobjectives of the NTEU. NTEU branches of some universities were prepared toaccept less than the floor price (11% pay increase) set by the National Office of theNTEU. There were also instances where the management in some universities tried toseek agreement directly with the staff bypassing the Union (O’Brien, 1999). As aresult the balance between the setting of a floor price line for the negotiation and theflexibility by the National Office concerning the bottom line created a considerableamount of debates recently. For example, one of the members (MGMT 3) of theUNE’s management enterprise bargaining team commented that:

The Melbourne office (national office) of the NTEU determines theexpectations of the NTEU branches throughout the universities inAustralia. The outcome of every negotiation has to be approved from theNTEU national office. The NTEU national office has ordered all thebranches of the NTEU not to accept any salary increase offer less than12%. As a result the NTEU branch of the UNE is claiming 13% increaseand sticking in to their claim although they know that the UNE does noteven have the capacity to accept a 12% increase claim. There is no waywe can reach a settlement until and unless the local branch of the NTEUconvinces their superiors in Melbourne that they should settle for less.We are not bargaining with the UNE’s NTEU branch, we are in factbargaining with the NTEU in Melbourne.

On the other hand one academic member (GEN 1) of the NTEU branch of the UNEclaimed that:

I have a feeling that our senior management people are actually trying tomake the Commonwealth authorities happy and in return trying to gettheir appreciation as a good manager rather than appreciation from theirfellow colleagues and administrative staff.

Therefore, although the university managements and NTEU branches are free ofdirect coercion from the top, they are controlled to behave in the desired ways

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expected from the top. They manage themselves, while at the same time, through theprogrammes, techniques and strategies of their respective tops their freedoms aremade subject to power (Foucault, 1988, pp. 83-84). Figure 2 presents a diagram ofhow these power relations are influencing and affecting the academic staff enterprisebargaining process of the UNE.

[Take in Figure 3]Like any other Universities in Australia, the UNE management is directly orindirectly steered by the Federal Government. As mentioned earlier, the UNE is aregional university in Australia (see Table 1 in Appendix 2) with some uniquecharacteristics which have made raising private income difficult compared to any ofits metropolitan-based counterparts. So, the UNE is more dependable on thegovernment funding and as a result more susceptible to Government’s steeringmechanism concerning its enterprise bargaining process. On the other hand theUNE’s enterprise bargaining negotiation process is more vulnerable to the floor priceset by the national office of the NTEU. One of the management team members(MGMT 4) informed that the NTEU national office wants to control the negotiationprocess in such a way that they even appointed somebody from their national office inthe name of an ‘Adviser’ in the NTEU negotiating team. The said ‘Adviser’ is in fact,monitoring whether the NTEU negotiating team is following the national office’sinstructions properly or not. The existence of the Government’s steering of theuniversities vis-à-vis the setting of the floor price by the NTEU has the origin at thetop where the Government and the NTEU have the corresponding desire fordominance and the desire for resistance. Those desires at top also flow to the bottomwhere the management of a university tries to dominate the union and creates acorresponding resistance from the union. For example, at one point of time of theenterprise bargaining negotiation process the UNE’s Vice-Chancellor tried to promotea ‘localised’ enterprise bargaining agreement outside the jurisdiction of the NTEU butwas strongly resisted the NTEU branch of the UNE (Campus Review, May 10-16,2000, p. 3). The UNE’s enterprise bargaining situation, therefore, signifies the factthat when political ideologies and masters are involved, “ability to pay” may fail asdetermining factor in the wage claims. The UNE’s enterprise bargaining situationalso signifies the fact that if the interests of local activists and members of the NTEUare divergent from the interest of the national office, accounting may fail to play anyfacilitating roles in the enterprise bargaining negotiation process.

The various outcomes of the higher education sector reforms including the emergenceof new power relations among government, universities and union have led to a highlevel of uncertainties in both the consequences and objectives of the enterprisebargaining settlement as well as high level of employer equivocality at the UNE.Burchell et al. (1980) argue that in such a situation accounting craft is supposed workas ‘rationalisation machine’ helping and seeking to legitimise actions that alreadyhave been decided upon. Amernic and Craig (1992) argue that in a bargainingenvironment of high level of employer equivocality and low level of unionheterogeneity, each side of the bargaining has an incentive to select the mode ofaccounting which is in its best interest. Evidences provided in this study supports theclaim of Amernic and Craig. Evidences provided in this study have shown that theuse of accounting information in the enterprise bargaining negotiation process of theUNE has led to a stalemate in the negotiation. Given the situation of high level ofuncertainty at both the consequences of action and the objectives for action,accounting’s role in the UNE’s enterprise bargaining process was rather obstructive.

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Therefore, Burchell et al.’s framework may be modified by adding a new dimensionto the roles of accounting. That is, in a situation of high uncertainty over both theorganisational action and organisational objectives, accounting system may also playan ‘obstructive machine’ role.

Again, there cannot be any competition among the universities as no level playingfield exists. For example, the asset/income base of the University of Sydney can notbe compared with the asset/income base of the UNE. And it will not be fair if theyare measured equally in terms of their competitive abilities concerning enterprisebargaining settlement. Policy makers in Australia are unwilling to challenge thesocial powers of the “Sandstone” Universities (Marginson, 1999). So, regionaluniversities like the UNE should not only be encouraged to introducedcommercialisation including the introduction of enterprise bargaining, they shouldalso be allowed with significant amount of public funds to restore competitiveness tosalaries and to maintain educational qualities. Otherwise, “enterprise bargaining” willonly become fashionable words for regional universities like the UNE in Australia.

CONCLUSIONThis case study was not conducted to justify the Log of Claims of the UNE’sacademic staff enterprise bargaining process. This study explored the role ofaccounting/financial information in the enterprise bargaining process of the UNE.Drawing on the framework of Burchell et al. (1980) on the roles of accounting inorganisation and society, this study has revealed that accounting/financial informationactually has failed to continue with its facilitating roles in the enterprise bargainingnegotiation process of the UNE. Instead, accounting information has been playing anobstructive role leading to stalemate towards reaching any enterprise bargainingagreement for more than a year.This study has shown some of the inherent limitations of the accounting discourserelevant to the enterprise bargaining negotiation process of the UNE which havecontributed towards such stalemate. In addition, this study has also revealed that thevarious higher eduction reform agendas of the Australian Federal Government havecreated a unique situation for the UNE as a regional university of Australia. Undersuch a situation, although the negotiating parties of the UNE whole-heartedly tried touse accounting/financial information to facilitate the enterprise bargaining negotiationprocess, the negotiators ended up with watching accounting’s obstructive roles.These findings raise a serious concern over whether across-the-field public sectorhigher education reform initiatives fit well with all the universities of Australia. Thefindings of the study also raise doubt on the relevance of accounting information inthe enterprise bargaining (that have its origin in profit motive organisations) in a not-for-profit organisation. The findings of the study also has shown us that accounting isnot a technical and neutral phenomena only, it is also socially and politicallyconstructed.

There are not enough studies that have addressed the enterprise bargaining issues ofthe Australian universities vis-a-vis the role of accounting information in the contextof higher education sector reforms in Australia. More research is needed tostrengthen our knowledge and understanding of non-technical and non-neutral roles ofaccounting in enterprise bargaining process in the not-for-profit organisationsincluding universities. A useful contribution to this research area could be anotherinterpretive study to examine the role of accounting in the enterprise bargaining

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negotiation process of other universities in Australia who are also facing the effects ofthe higher eduction reform agendas of the Australian Federal Government.

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Endnotes:

1. See for example, Jackson-Cox et al. (1984); Lewis et al. (1984); Amernic (1985);Ogden and Bougen (1985); Ogden and Bougen (1985); Owen and Lloyd (1985);Bougen et al. (1990); Clarke et al. (1990); Clark and Craig, 1991; Amernic andCraig (1992); Craig and Clark (1993); McBarnet et al. (1993); Craig and Amernic(1997) and Fogarty and Radcliffe (1999). Except Amernic (1985) and Amernicand Craig (1992) none of these studies focused collective bargaining in a not-for-profit environment (NPF). Another study by Amernic and Aranya (1990) focusedon collective bargaining in NPF environment but the study was conducted from amainstream positivistic perspective.

2. “Equivocality” means ambiguity and the existence of multiple, conflictinginterpretations about a situation, so that participants are not certain about whatquestions to ask, and if the questions are posed, the situation is ill-defined to thepoint where a clear answer will not be forthcoming (Amernic and Craig, 1992, p.65).

3. Marginson referred the category of ‘Gumtree’ as ‘Wannabees’ in his 1997a paper

4. Peter Costello is the current (2001) Treasurer of the Federal Government ofAustralia.

5. For example, the Murray Committee Enquiry in 1957; the Eggleston Report in1964; the Martin committee Report in 1965; the Campbell Report in 1973; thereview by the Committee on Employment, Education and Training chaired by Mr.John Brumby; A Committee Chaired by David Hoare in 1995 and the WestReview in 1996.

6. Accounting technology can be an artefact (eg a budget document), the process oruse of the technology (eg producing and making use of the budget) and theknowledge of the people in designing or operating the technology (eg the ‘knowhow’ that specifies the relationship between the predicted costs and specificactivities). (Preston et al. 1992, p.563)

7. The UNE branch of the NTEU enjoys a membership of more than 70% ofacademic staff and involved relatively homogeneous group (Amernic and Craig,1992) of staff in terms of their support and understanding towards union activities.

8. The term ‘poverty of accounting’ is borrowed from Chambers (1999).

9. Most of the staff of the UNE’s School of Accounting, Finance andEntrepreneurship are also members of the UNE branch of the NTEU and ready toextend their hands to prove that the NTEU is also accounting literate trade union.

10. The concept of power here is referred to the ability of a group to influence theallocation of resources (Cooper and Sherar, 1984).

Appendix 1: Figures

Figure 1Uncertainty, Decision Making and the Roles of Accounting Practice

Uncertainty of objectives

Low High

LowAnswermachines

Ammunitionmachines

Uncertaintyof

Answermachines

cause andeffect High Learning

machines

Rationalizationmachines

Source: Burchell et al. (1980, p.14)

Figure 2Accounting As Excuses in NPO Collective Bargaining

Union heterogeneity

Low High

High Cell 4 Cell 1Employer equivocality

Low Cell 3 Cell 2

Source: Amernic and Craig (1992, p. 66)

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Figure 3Steering From a Distance and Power Relations in the Academic Staff Enterprise

Bargaining Process of the UNE

Desire for FEDERAL Dominance NTEUGOVERNMENT and Resistance NATIONAL OFFICE

Steering Steering

UNE Desire for UNE's MANAGEMENT Dominance NTEU

and Resistance BRANCH

Steering Steering

UNE Desire for NTEU

MANAGEMENT Dominance EB TEAM EB TEAM

Influenced Influenced

ROLES OF ACCOUNTINGIN THE EB NEGOTIATION

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Appendix 2: Tables

Table IAustralian Universities by Segments

Sandstones Redbricks Unitechs Gumtrees NewUniversities

U. Sydney Aust. National U. UT. Sydney U. New England2 U. West SydneyU. Melbourne U. NSW RMIT Macquarie U. Charles Sturt U.U. Queensland Monash U. Queensland UT U. Newcastle South. Cross U.U. West Aust. Curtin UT U. Wollongong Victoria UTU. Adelaide U. South Aust. La Trobe U. Swinburne UT

U. TasmaniaDeakin U. U. Ballarat

Griffith U. Central QLD U.James Cook U. U. Southern QldMurdoch U. Sunshine Coast U.Flinders U. Edith Cowan U.

U. CanberraNthn Territory UBatchelor CollegeAust Catholic U.

1. ‘U’ indicates University of, UT indicates University of Technology. RMIT means Royal MelbourneInstitute of Technology. Bold italics indicate universities that do not share all characteristics of other inthe group.2. The University of New England was founded in 1954, pre-dating Monash, but was not given aMedical faculty and has always been confined by its regional role. It shares some characteristics ofwith the older Gumtrees, some with regional New Universities, and some with other distance educationspecialists(Source: Marginson, 1999, p. 17.)

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TABLE IIUSE AND APPEARANCE OF ACCOUNTING AND ACCOUNTING-BASEDINFORMATION AND RHETORICS IN THE ENTERPRISE BARGAINING

NEGOTIATION PROCESS OF THE UNEAUGUST 1999 – JUNE 2000

EB NEGOTIATIONCOMMUNICATION

DEVICECATEGORIES

TOTALNUMBERS

AT LEAST ONEAPPEARANCE AND

USE OF ACCOUNTINGINFORMATION AND

RHETORIC

PERCENTAGEOF THETOTAL

Academic Staff EBMinutes

16 meetings In 14 meetings 87.5%

Academic EB relatedcommunication to theUNE community fromthe NTEU’s UNEbranch office

26 e-mails andhandouts

In 17 e-mails and handouts 65.4%

Communication to theUNE community fromthe UNE management

18 e-mails In 13 e-mails 72.2%

Academic Staff EB1999 correspondences

12 Correspondences In 5 correspondences 41.7%

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Appendix 3: Interviewee ProfilesGEN 1:An academic member of the UNE branch of the NTEU. Holding a mid-levelacademic position. Has got extensive experience on unionism in the highereducational sector of Australia. Involved in community works, administration andpolicymaking. Not a member of the enterprise bargaining negotiating team of theNTEU branch of the UNE but regarded as one of the key advisers to the NTEUnegotiating team.

GEN 2:An academic member of the UNE branch of the NTEU. North American born. Havegot academic experience in a North American University and got experience ofobserving enterprise bargaining processes in North American universities. Holding alower level academic position with interest in application of multivariate statistics inresearch. A strong supporter for the NTEU claims concerning EB negotiation processof the UNE.

GEN 3:An academic member of the UNE branch of the NTEU. Holding a high levelacademic position. Although an NTEU member but was always vocal againstNTEU’s claims concerning the EB negotiation at the UNE.

GEN 4A non-academic member of the UNE branch of the NTEU. Holding a mid-levelmanagement position which is under contract for three years. Participated in thedebate concerning EB negotiation on various occasions.

NTEU 1:Is one of the academic members of the UNE branch of the NTEU holding a mid-levelacademic position. A member of the enterprise bargaining negotiating team of theNTEU branch of the UNE. Limited experience in academic staff enterprisebargaining negotiation.

NTEU 2Is one of the academic members of the UNE branch of the NTEU holding a mid-levelacademic position. A member of the enterprise bargaining negotiating team of theNTEU branch of the UNE. Has got extensive experience in academic staff enterprisebargaining negotiation and was a member of all the previous NTEU negotiating teamsof the UNE.

NTEU 3Is one of the academic members of the UNE branch of the NTEU holding a mid-levelacademic position. Holding an academic administrative position. A member of theenterprise bargaining negotiating team of the NTEU branch of the UNE. Has gotextensive experience in academic staff enterprise bargaining negotiation and was amember of all the previous NTEU negotiating teams of the UNE.

NTEU 4Is one of the academic members of the UNE branch of the NTEU holding a lower-level academic position. A member of the enterprise bargaining negotiating team ofthe NTEU branch of the UNE. This is the first time actively involved in an academicstaff enterprise bargaining negotiating process.

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MGMT 1:Is a mid-level management person at the UNE having qualifications and experiencesin the area of industrial relations. A member of the management enterprise bargainingteam of the UNE.

MGMT 2:An upper level management person at the UNE and looking after the business affairsof the UNE. Have experience in managing business affairs of public sectororganisations including universities. A member of the management EB team of theUNE. This is the first time actively involved in an academic staff enterprisebargaining negotiating process.

MGMT 3:A senior management person having experience in academic staff enterprisebargaining negotiating process. A member of the management EB team of the UNE.

MGMT 4:A senior academic member in the UNE management negotiating team. Also holdinga high level administrative position. Has got previous experience with UNE’senterprise bargaining negotiation.

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UNE)