reforms

International Institutefor Educational Planning

Higher education reformsInstitutional restructuring in Asia

Edited by N.V. Varghese

New trends in higher education


Edited by N.V. Varghese

International Institutefor Educational Planning

The views and opinions expressed in this booklet are those of the author and do not necessarily represent the views of UNESCO or the IIEP. The designations employed and the presentation of material throughout this review do not imply the expression of any opinion whatsoever on the part of UNESCO or the IIEP concerning the legal status of any country, territory, city or area or its authorities, or concerning its frontiers or boundaries.

The publication costs of this study have been covered through a grant-in-aid offered by UNESCO and by voluntary contributions made by several Member States of UNESCO, the list of which will be found at the end of the volume.

Published by: International Institute for Educational Planning7-9 rue Eugne Delacroix, 75116 Parise-mail: [email protected] website: www.iiep.unesco.org

Cover design: Typesetting: Linale ProductionPrinted in IIEPs printshopISBN: 978-92-803-1335-2 UNESCO 2009

5ACKNOWLEDGMENTS

This volume on institutional restructuring of higher education in Asia is the product of a research programme initiated by the International Institute for Educational Planning (IIEP), Paris, in collaboration with many institutions and individuals. The contributions from each of the partners helped formulate the problem, implement the study, organize meetings and prepare the manuscript for publication.

We also would like to thank the following:

Gudmund Hernes, former Director of IIEP, for his guidance and advice in the initial stages;

Mark Bray, current Director of IIEP for his advice and support during the fi nal stages of the study;

the RIHED Bangkok offi ce, especially Padoongchart Suwanawongse, former Director; Supachai Yavaprabhas, current Director; and Thanthakorn Puangsawat, Programme Offi cer, for their collaboration and support in carrying out the studies and organizing the meetings and policy forum;

the UNESCO Bangkok Offi ce, especially Sheldon Shaeffer, Director; Molly Lee, Senior Programme Specialist; and Kim Chong Hong, Associate Expert, for their participation and support in the programme;

the study authors who prepared the study reports and the papers for the policy forum and revised them for this volume;

the experts and participants of the meetings and policy forum for their comments and suggestions;

Teboho Moja for her very valuable and insightful comments that helped to revise the manuscript;

Christine Edwards for her effi cient handling of all support activities to facilitate the organization of the policy forum, for her untiring efforts in following-up with the authors, and for editing this volume.

N.V. Varghese

7TABLE OF CONTENTS

Acknowledgments 5List of abbreviations 9List of tables 11List of fi gures 14List of charts 14Executive summary 15Preface 211. Institutional restructuring of higher education in Asia:

an overview by N.V. Varghese 23

1.1 Introduction 23 1.2 Compulsion for change in higher education 25 1.3 Institutional restructuring of higher education 29 1.4 The countries and institutions studied 31 1.5 Trends in institutional restructuring in selected

universities 37 1.6 Some features of introducing institutional restructuring 42 1.7 Concluding remarks 502. Gadjah Mada University, Indonesia

by Sahid Susanto and M. Nizam 53 2.1 Introduction 53 2.2 Institutional restructuring 56 2.3 Aspects of expected improvement 58 2.4 Implementation of restructuring in the university 60 2.5 Constraints in the implementation of restructuring

measures 66 2.6 Impact of restructuring on the management

of universities 68 2.7 Implications for introducing reforms in universities 74 2.8 Input of institutional managers 773. Universiti Kebangsaan Malaysia 81 by Muhammad Yahaya and Imran Ho Abdullah 3.1 Introduction 81 3.2 Institutional restructuring 86 3.3 Expectations and rationale 91

8Table of contents

3.4 Implementation of restructuring in the university 93 3.5 Constraints in the implementation of restructuring

measures 98 3.6 Impact of restructuring on the management of universities 100 3.7 Implications for introducing reforms in universities 1054. The Mongolian University of Science and Technology

by Yadmaa Narantsetseg 109 4.1 Introduction 109 4.2 Institutional restructuring 112 4.3 Implementation of restructuring in the university 119 4.4 Constraints in the implementation of restructuring


of universities 126 4.6 Implications of introducing reforms in universities 1285. King Mongkuts University of Technology Thonburi,

Thailand 133 by Banterng Suwantragul 5.1 Introduction 133 5.2 Initiation of institutional restructuring in Thailand 133 5.3 Institutional restructuring in King Monkuts University

of Technology 134 5.4 Implementation of restructuring in the university 138 5.5 Constraints on the implementation of restructuring


of universities 145 5.7 Implications of introducing reforms in universities 1596. Hue University, Vietnam

by Huyhn Dinh Chien 161 6.1 Introduction 161 6.2 The re-establishment of Hue University:

institutional restructuring of higher education in Hue City 165 6.3 Constraints on the implementation of restructuring 171 6.4 Impact of restructuring on university functioning 175 6.5 Lessons learned from the process of restructuring 191

References 195

9LIST OF ABBREVIATIONS

AS academic staffASS administrative and support staffBHMN UGM state-owned legal entityBoT Board of TrusteesCADA Centralized administration decentralized academic

managementDGHE Directorate General of Higher EducationDIK the state appropriation for operational costs including

emolumentDIK-S public participation and self-generated fundingDIP state development budgetDUE Development of Undergraduate EducationEFA Education for AllFST Faculty of Science and Technology, UKMGATS General Agreement for Trade in ServicesGER gross enrolment ratioGNP gross national productHEI higher education institutionIAU Internal Audit UnitICT information and communication technologyIIEP International Institute for Educational PlanningIMEN Institute of Microengineering and NanoelectronicsIPB Bogor Agriculture UniversityIRHE Institutional Restructuring of Higher EducationIT information technologyITB Bandung Institute of TechnologyKMITT King Mongkuts Institute of Technology, Thonburi

(Thailand)KMUTT King Mongkuts University of Technology, Thonburi

(Thailand)LAN National Accreditation Board, Malaysia

10

List of abbreviations

MNoP Minister of National EducationMoE Ministry of EducationMoET Ministry of Education and TrainingMoF Ministry of FinanceMoNE Ministry of National EducationMUA Ministry of University Affairs, ThailandMUST Mongolian University of Science and Technology NAB National Accreditation Board, Indonesia OECD Organisation for Economic Cooperation and

DevelopmentPBBS performance-based budgeting systemPC Professors CouncilPROAP UNESCO Principal Regional Offi ce for

Asia and the Pacifi cP2T GMU University project offi ceQA quality assuranceQAU Quality Assurance UnitR&D research and developmentRAISE-LEAP Relevance, Academic atmosphere, Internal management

and Structural organization, Effi ciency and productivity, Leadership, Equity and Access, and Partnership

SEAMEO RIHED Southeast Asian Ministers of Education Organization Regional Centre for Higher Education and Development

TMR&D Telekom Research & DevelopmentTTI Thonburi Technology InstituteUGM Gadjah Mada University (Universitas Gadjah Mada)UI University of IndonesiaUIS UNESCO Institute for StatisticsUKM Universiti Kebangsaan MalaysiaUMBI Medical Molecular Biology InstituteUNESCO United Nations Educational, Scientifi c and Cultural

OrganizationUNIMIS University Management Information System of MUST

11

LIST OF TABLES

Table 2.1 Average value of the response from department heads on the level of autonomy granted as part of institutional restructuring 70

Table 2.2 Average value of response from department heads on the benefi ts of institutional restructuring 71

Table 2.3 Average value of the response from administrative staff on the benefi t of university restructuring 73

Table 3.1 Perception of major areas of change to academic programmes 102

Table 3.2 Academic staff opinion on certain aspects of academic restructuring 102

Table 3.3 Areas of major change according to groups surveyed 105Table 4.1 Opinions on diffi culties in the implementation

of the restructuring process: decision-making 124Table 4.2 Opinions on diffi culties in the implementation

of the restructuring process: fi nance and organizational structure 124

Table 4.3 Opinions on diffi culties in the implementation of the restructuring process: student-related 125

Table 4.4 Opinions on diffi culties in the implementation of the restructuring process: procurement procedures 125

Table 4.5 Perceptions of the university community on areas of university restructuring (percentage) 127

Table 4.6 Some comparative indicators of MTU and MUST 128Table 5.1 Background data on King Mongkuts University

of Technology Thonburi 136Table 5.2 Senior university management: general information 145Table 5.3 Senior university managements opinion on

areas effected by institutional restructuring 146Table 5.4 Senior university managements opinion on the level

of autonomy 146Table 5.5 Senior university management: opinion

on the benefi ts of institutional restructuring 146

12

List of tables

Table 5.6 Teaching staff: general information 147Table 5.7 Teaching staffs opinion on the effect of

institutional restructuring 147Table 5.8 Teaching staffs opinion on the institutional

restructuring process 148Table 5.9 Teaching staffs opinion on the institutional

restructuring process 148Table 5.10 Teaching staffs opinion on the benefi ts of

institutional restructuring 149Table 5.11 Teaching staff: civil service opinion 149Table 5.12 Teaching staff: university employee opinion 150Table 5.13 Administrative and supporting staff: general

information 150Table 5.14 Administrative and supporting staffs opinion on

the effect of institutional restructuring 151Table 5.15 Administrative and supporting staffs opinion on

the effect of institutional restructuring 151Table 5.16 Administrative and supporting staffs opinion on

the benefi ts of institutional restructuring 151Table 5.17 Administrative and supporting staff: civil service

opinion 152Table 5.18 Administrative and supporting staff:

university employee opinion 152Table 5.19 Final year undergraduate students: general

information 153Table 5.20 Final year undergraduate students opinion on

the effect of institutional restructuring 153Table 5.21 Final year undergraduate students opinion on

institutional restructuring process 153Table 5.22 Final year undergraduate students: opinion on

the benefi ts of institutional restructuring 154Table 5.23 Number of staff 155Table 5.24 Graduate programmes offered

between 1998 and 2003 157Table 6.1 Areas where major changes have been introduced 177

13

List of tables

Table 6.2 Leaders opinions on the level of autonomy granted as part of the institutional restructuring process 178

Table 6.3 Leaders opinions on budget allocation at the faculty level 181

Table 6.4 Administrative and support staff opinions on budget allocation at the faculty level 181

Table 6.5 Staff recruitment by civil service examination 183Table 6.6 Student admissions 184Table 6.7 Leaders opinions on the benefi ts of institutional

restructuring 186Table 6.8 Academic staff opinions on the benefi ts of

institutional restructuring 187Table 6.9 Administrative and support staff opinions

on the benefi ts of institutional restructuring 188

14

LIST OF FIGURES

Figure 1.1 Restructuring and reorganization models of MUST 48Figure 2.1 Response of academic staff on the benefi t of

institutional restructuring 72Figure 3.1 Challenges to higher education in Malaysia 84Figure 3.2 Organizational structure of Universiti Kebangsaan Malaysia 90Figure 3.3 Restructuring of the social sciences 97Figure 3.4 Restructuring of the sciences 98Figure 3.5 Hierarchy in decision-making structures 103Figure 5.1 Public university reporting diagram 139Figure 5.2 Autonomous university reporting diagram 141Figure 5.3 King Mongkuts University of Technology Thonburi

(KMUTT) administration chart 143Figure 5.4 Percentages of university employee/permanent staff 156Figure 5.5 Percentage of civil servant converted to

university employees 156

LIST OF CHARTS

Chart 6.1 Composition of interviewees 176Chart 6.2 Percentage of male and female interviewees 176Chart 6.3 College leaders opinions on decision-making

at the university/institutional level 180Chart 6.4 College leaders opinions on decision-making

at the faculty/department level 180Chart 6.5 Leaders opinions on diffi culties in the

implementation of the restructuring process 190

15

EXECUTIVE SUMMARY

Higher education has become one of the fastest growing segments of the education sector. This expansion is also accompanied by the diversifi cation of providers, students, programmes and changing sources and modes of fi nancing, all posing challenges to the management of the system. Higher education institutions have therefore been introducing reform measures to improve their operational effi ciency.

All the reforms have one thing in common a move away from state control towards the market. This new orientation, combined with managerial concern, has led to institutional restructuring, defi ned as changes in both the governance and management of institutions. Governance involves the structures and processes of decision-making, whereas management implies the implementation of decisions. Making and implementing decisions might entail, therefore, the creation of new structures, specifi ed criteria for the allocation of resources to various activities, the allotment of tasks to various groups, and the evaluation of performance. Structure mainly concerns the offi ces, positions and formal roles within an organization. Criteria refers to norms that form the basis for the distribution of responsibilities and resources to all lower level units within an organization.

There are different angles from which one can analyse these changes. Firstly, they can be seen as fi nance-driven reform measures. The dominant trend in public policy and action in developing countries during the period of structural adjustment programmes of the 1980s was to re-prioritize public investment in favour of primary education. The rate of return analysis provided a theoretical support to such a shift in policy. In many cases, reforms were introduced to arrest the declining resource base and deteriorating service conditions in many of the higher education institutions.

Secondly, the changes in higher education institutions were related to political changes a move away from centrally-planned to market economies. This led to reforms for the reorganization of admissions, curricula, assessment practices, funding patterns, and so on. In these situations, the institutions were re-positioning themselves

16

Executive summary

to suit the requirements of market economies. Thirdly, some changes have more to do with the positioning of higher education institutions to support activities intended to improve quality and to enhance economic competitiveness. The primary objective of the reforms in this frame of analysis was to improve the relevance and quality of programmes and courses offered by universities rather than as measures to save or mobilize resources.

Institutional restructuring has changed the overall functioning of institutions, affecting various groups in the university sector in different ways. It is believed by some that the restructuring process has altered the universitys mission, whereas others feel that there was no alternative but to reform the system. Instances of strong resistance, both to these changes and to the restructuring process, are common throughout the countries involved, and a continual process of bargaining and negotiation plays a signifi cant part in the restructuring effort. Certain universities have been more successful than others in their implementation of change. IIEP initiated a research programme with the principle objective of studying the restructuring processes and their effects, both from a national and an institutional point of view.

The present study focuses on changes taking place in fi ve countries in the region, namely: Indonesia, Malaysia, Mongolia, Thailand and Vietnam. These countries are at varying levels of economic and educational development, especially with regard to higher education. The countries and institutions were selected based on a review of progress of the restructuring process, in collaboration with the Southeast Asian Ministers of Education Organization Regional Centre for Higher Education and Development (SEAMEO RIHED) and in consultation with the senior-level decision-makers in the region.

The countries selected for the study provide varying contexts for initiating the restructuring process. Among them, Malaysia and Thailand have been politically stable for a relatively long period. Malaysia is competing with other countries in the region to emerge as the leader in knowledge-based production with an emphasis on creating a knowledge-based economy. Its policy places a high priority on expanding and improving the quality of higher education. Thailand initiated steps to reform higher education in the 1990s, but the pace of reform seems to

17

Executive summary

be slow. Indonesia faced an economic crisis in 1999 perhaps more severe than other countries accompanied by a political crisis, having previously enjoyed a long period of stability. These crises provided, at least in part, the impetus for public sector reform. In Indonesia, the private sector has a strong presence in higher education, unlike the other countries included in the study. Mongolia and Vietnam had centrally-planned economies until relatively recently. Vietnam moved away from the centrally-planned structure in the mid-1980s, while Mongolia transited to a market economy in the 1990s. The move away from a centrally-planned system towards a market system brought about many changes in the organization and provision of services in these countries in all sectors of the economy, including higher education.

The studies were carried out by national teams focusing on the implementation of the restructuring process, the diffi culties encountered, and the implications for university management. Methodological workshops were held in order to ensure a common understanding of both the study and its analytical focus. The draft reports were discussed in a policy forum where researchers and decision-makers from each of the participating countries reviewed the study results.

The following is an attempt to draw some conclusions common to all the different universities studied in the countries selected.

The impetus behind institutional restructuring was governmental rather than internal, with institutions responding to steps initiated by national governments. The major contribution of universities was to internalize reform measures and carry forward the diffi cult task of implementing these changes.

Analysis of reforms in the universities studied shows that important factors infl uencing reforms at the national level include pressure to cope with advances in information and technology, the need for more accountable public administration, and a concern to provide quality education in relevant areas of study.

All reforms indicated a move away from government control yet maintained the public university status of institutions, even when reform initiatives stemmed from the government. The governments continue to support the universities in all the countries studied. Countries have developed objective criteria for resource transfer

18

Executive summary

from the state to universities. Their performance is monitored and outcomes are evaluated. The criteria take the form of contractual arrangements and conditions to be honoured. The nature of the relationship between the state and universities and the areas of their operation are more clearly defi ned now than ever before.

Universities have become autonomous entities. The case studies indicate that the universities have gained more freedom and autonomy in all countries, while the infl uence of government on day-to-day management has declined. Today, most decisions pertaining to universities are taken by bodies constituted by the universities themselves. The universities have their own management systems. Autonomy is becoming increasingly exercised in matters pertaining to the introduction of courses, recruitment of staff, decisions regarding admissions, and fi nancial matters even in cases where government funds represent a signifi cant share of university funding.

Academic restructuring is core to institutional restructuring. Curriculum changes and the reorganization of courses are central to many reform measures. In Indonesia, undergraduate courses were reviewed and reorganized. In Malaysia, the faculties and courses were reorganized and merged. In Vietnam and Mongolia, course contents were changed to refl ect the requirements of an emerging market-oriented economy. Five colleges and research institutions were amalgamated to form Hue University in Vietnam. The reorganization of these faculties helped create standardized units for academic and management purposes. The courses were reorganized and faculties were merged to form more viable units to avoid overlapping between subject areas. At present, Hue University consists of six schools and fi ve centres. The curriculum reforms are signifi cant as universities are traditionally slow to adapt to change.

The most important feature of the institutional restructuring process is that the universities have all created internal structures to provide better management. In Indonesia, a Board of Trustees has been created that is responsible for all decisions taken for and on behalf of the university. In the case of Thailand, the reconstituted University Council is responsible for the overall management

19

Executive summary

of the university, with the Vice-Chancellor becoming Chief Executive Head of the institution. In Mongolia, the Presidents Council was signifi cant both in terms of size and authority. Over the years, faculties have been replaced by schools and departments by professors, while the academic community has increased its representation in decision-making bodies.

The decentralization of decision-making within the universities has increased. As a result of the process of institutional restructuring, the internal democratic functioning of the higher education institutions has increased considerably. Prior to these reforms, only senior management was involved in the management and administration of university affairs. However, this has changed considerably in recent times, with departments and schools increasingly articulating their requirements.

Implementation requires strong leadership at the institutional level. This study indicates that institutional restructuring was facilitated by strong leaders, who reassured stakeholders that their relative position would remain strong despite the reforms. The international experience and recognition of the university head in Mongolia benefi tted the implementation of reforms. Indonesia and Thailand, too, profi ted from the presence of strong institutional heads who led the restructuring process. In Thailand, teachers had to take a decision regarding a shift in their employment status from civil service to university service. Job security is assured for the public sector, whereas there is no such guarantee for the private sector.

The implementation of changes in higher education institutions is more diffi cult, primarily due to strong resistance to change in these institutions. Moreover, dispersed decision-making structures make it more diffi cult to implement reforms. The Malaysian experience shows that resistance to reforms can be overcome if consultations and discussions take place among stakeholders, providing them with the opportunity to refl ect and respond. This may lead to delays in implementation, but such delays are necessary to reduce the social cost of implementing reforms.

Rushing the restructuring process is not the best way to introduce reforms. This may be seen as imposing changes against the will of

20

Executive summary

the academic community. In all instances, it is important to keep the interests of stakeholders in mind. Reforms are opposed when part of the academic community feels that it will lose as a result of the process. Any successful reform is a negotiation between what is desirable and what is feasible.

The implementation of reforms introduces an element of risk at the institutional level some people gain as a result of reforms, while others may lose. People are not ready to accept internal and institutional changes until they are assured that their relative position in the hierarchy will be at least retained, if not improved. The Malaysia study shows that resistance can be reduced and overcome if the Vice-Chancellor announces that no redundancies will occur as a result of the reforms.

The institutional restructuring processes have reduced political control of the universities and improved institutional capacity to respond quickly to societal needs and market signals. The reputation of universities for being loosely attached organizations, with weak regulation and control, is now being replaced by the notion that universities can be tightly coupled institutions with effective monitoring systems while still maintaining their mission. In general, the institutional restructuring process has resulted in better functioning institutions more focused on realizing their mission of providing relevant courses of good quality.

21

PREFACE

The higher education sector has experienced dramatic changes in recent years. Growth in student numbers, the diversifi cation of programmes, institutional arrangements for provision, mechanisms of fi nancing, and sources of funding are all areas that have seen important reform measures. Many of these reforms were intended to reposition the university in the context of a changing environment be it fi nancial, political or academic.

These reform measures have changed the ways in which higher education institutions are managed. Universities have become progressively more independent, both fi nancially and economically, and now have their own decision-making structures. This restructuring process, which has taken place over the past decades, implies changes in both the governance and management of institutions. New structures for decision-making and criteria for the allocation and re-allocation of responsibilities have emerged. These measures were not always easy to implement, and often met strong levels of resistance at the institutional level among staff and student bodies.

IIEP initiated a research programme with the major objective of studying the restructuring processes and their implications for institutions located in different regions. This book is based on studies carried out in the Asian region, namely a detailed survey of the nature of recent reform measures in universities from fi ve countries: Indonesia, Malaysia, Mongolia, Thailand and Vietnam. The overall conclusion of the study is that the restructuring process initiated in many countries in the region was not motivated primarily by fi nancial factors, but was rather a response to the perceived need to enhance the relevance and quality of the programmes offered. These reforms helped universities respond to the changing economic and social conditions of the countries.

The countries and institutions were selected based on a progress review of the restructuring process, undertaken in collaboration with RIHED and in consultation with senior-level decision-makers in the countries. The studies were carried out by national teams focusing

22

Preface

on the implementation of the restructuring process, the diffi culties encountered, and the implications for university management. This volume contains all the papers prepared and presented in the policy forum held at Hue University, Vietnam.

IIEP is grateful to the study authors for their contributions, to RIHED and UNESCO Bangkok for their collaboration and support at every stage, to Hue University for organizing the policy forum, and to N.V. Varghese for directing the research studies and activities leading to the publication of this volume.

Mark BrayDirector, IIEP

23

1. INSTITUTIONAL RESTRUCTURING OF HIGHER EDUCATION IN ASIA: AN OVERVIEW

N.V. Varghese

1.1 Introduction

The higher education sector has been expanding for several decades. This growth is refl ected in increases in the number of institutions, students and teachers. While expansion in the 1960s and 1970s occurred mainly in public institutions reliant on government funding, expansion in more recent decades has extended to private institutions and household funding. Many reform measures adopted during this period indicate a move away from government both in terms of fi nancial reliance and control. Institutions of higher education have become more autonomous both in setting priorities and mobilizing resources.

These changes can be analysed from different angles. First, they can be seen as fi nance-driven reform measures. During the structural adjustment programmes of the 1980s, the dominant trend in public policy and action in developing countries was re-prioritizing public investment in favour of primary education. The rate of return analysis, which provided theoretical support to such a shift in policy, argued that returns from primary education are higher than those at other levels of education, and hence the diversion of resources from higher to primary education was justifi ed in terms of economic rationality and profi tability (World Bank, 1986). Such policies led to the declining resource base and deteriorating service conditions in many higher education institutions, and were a contributory factor to the erosion of higher education in developing countries and the depletion of their national capacities. In extreme cases, universities in many developing countries became resource-starved and were on the brink of collapse.

Second, the changes in higher education institutions were related to political changes a move away from a centrally-planned economy towards a market economy. This led to the total reorganization of admissions, curriculum, assessment practices, funding patterns, and so on, as universities repositioned themselves in line with the new political

24


realities. Third, these changes resulted principally from the positioning of higher education institutions to support activities intended to improve economic competitiveness. Within this frame of analysis the primary objective of reforms was to improve the relevance and quality of the programmes and courses offered by universities, not to act as measures to overcome fi nancial diffi culties. This chapter argues that institutional restructuring in East Asia was an effort to improve the relevance and quality of higher education rather than an instrument to mobilize additional resources.

Market orientation and managerial concerns have led to the restructuring of governance in the public sector. State support for education is questioned and the application of market principles in the provision of education services is encouraged. In this scenario, the role of the state as service provider is increasingly replaced by the regulative authority for controlling the quality of public services (Mok and Welch, 2003). Consequently, universities have adopted corporate models and have become entrepreneurial (Clark, 1998) leading to changes in university activities, organizational structures and management practices. In particular, economic rationality, market principles and the notion of academic capitalism (Slaughter and Leslie, 1997) have governed changes in university managerial practices.

This chapter also attempts to point out some of the signifi cant features of the institutional restructuring process that has taken place in different universities in Asia. As mentioned above, the analysis in this chapter shows that institutional transformation and restructuring need not always be associated with the fi nancial diffi culties faced by institutions. Section 1.2 analyses the compulsion for change in higher education. This is followed by a discussion of the idea of institutional restructuring in Section 1.3, and a discussion on the East Asian context and the institutions studied in Section 1.4. Section 1.5 deals with some trends in the institutional restructuring process in different universities, while Section 1.6 attempts to capture some of the features of institutional restructuring that are common across countries. The fi nal section makes some concluding observations.

25

Institutional restructuring of higher education in Asia: an overview

1.2 Compulsion for change in higher education

The higher education scene has changed, forcing modifi cations in the management of the system. Factors infl uencing these changes include expansion of the system, diversifi cation in provision of services and resource base, and changes in the economic rationality of investing in higher education. Several other factors can be identifi ed as major sources of change in the organization and management of higher education.

a) Pressure to manage the expansion of the system

According to UNESCO statistics, enrolment in higher education increased from 28.1 million in 1970 to 132 million in 2004 (UIS, 2006). While in the 1960s and 1970s, both developed and developing countries made advances in expanding higher education, in the 1980s and 1990s, developing countries lagged behind developed countries. Gross enrolment ratios (GERs) in higher education trebled in the developed world between the 1980s and 1990s. The fi gures in the developing world remained constant or marginally improved during the same period.

Among developing countries, East Asian countries made considerable progress and increased their share of enrolment in higher education to total enrolment. The GER started improving in many developing countries during the late 1990s. In the developed world, higher education has assumed a mass character with GER surpassing 50 per cent, whereas in the majority of developing countries, especially in Africa, the GER is less than 10 per cent. However, the existing institutional arrangements were not in a position to accommodate the increasing social demand for higher education. Therefore, the mode of delivery and provision of services became diversifi ed, with private institutions and distance learning institutions including e-learning and trans-border providers becoming viable alternatives in many countries.

b) Pressure to change due to globalization of the economy

Globalization has contributed to the increasing demand for larger quantity and better quality of higher education graduates. With the transition towards knowledge-based production, economies are increasingly becoming aware of the importance of research in

26


development. The capacity to innovate is positively associated with the quality of higher education provided in the country, and the absorption of innovation depends on the quantity of people educated to higher levels (Stiglitz, 1998). The strength underlying international competitiveness is provided by the national pool of professionally trained human resources.

The knowledge-driven production of goods and services increases the demand for people educated to higher levels. Evidence of this phenomenon can be observed from the fact that, in developed countries, the proportion of university or higher education institution graduates continues to increase at a fast pace (World Bank, 2002a). The shift in employment prospects from the manufacturing to service sectors is also associated with the increasing qualifi cation levels of employees. In other words, the increase in intensity of knowledge use in production has led to a growth in demand for higher education graduates in the labour market, and this in turn has increased the demand for higher education.

Three aspects of recent developments, namely capitalization of knowledge, deterritorialization of information and technologialization of education (Peters, 2003), have created a conducive atmosphere for the globalization of education. Thus, cross-border education has promoted the process of privatization of public universities, the marketization of courses and programmes, and the corporatization of university services. As can be seen in the latter part of this book, the institutional restructuring process initiated in some of the countries studied is more the result of changes in the perception of education, than the need for mobilizing resources.

c) Pressure to change due to the higher rate of return for investment in higher education

The rate of return studies in the 1960s and 1970s showed higher rates of return for primary than other levels of education (Psacharopoulos, 1994). This trend changed in the 1980s in many countries and recent estimates indicate that returns for higher education are not only on the increase, but will also surpass those of other levels of education. This reversal is visible in developed countries, in some of the developing

27


countries in the Latin American region and in countries of the Asian and African regions (World Bank, 2002a).

UIS/OECD studies indicate that the earnings advantage of those educated to tertiary level over those educated to upper secondary is very high for both men and women. For men, the earning advantage of higher education graduates over secondary school graduates varies from 82 per cent in Indonesia to almost 300 per cent in Paraguay. For women, the corresponding variations are from 55 per cent in Indonesia to 179 per cent in Brazil (UIS/OECD, 2003). This increases the propensity of individuals and households to invest in higher education.

Higher education contributes to improved income through different channels. First, the labour force participation rates among those educated to higher levels are consistently higher than those who are less educated. Equally important is the fact that the unemployment rate in many countries is lower among university graduates than secondary school graduates. Second, people educated to higher levels access sectors and jobs that are higher paying, leading to a general enhanced average income of graduates. The higher wages skills required in the context of globalization (World Bank, 2002a) create a benefi cial environment for the growth of higher education. Greater returns from higher education lead to a willingness to invest in more higher education on the part of households and the state. The growth of private universities and the privatization of public universities are indications that this willingness is being capitalized upon.

d) Pressure to change due to the emergence of the private sector in higher education

At the turn of the twenty-fi rst century, private higher education is considered one of the most dynamic and fastest growing segments of post-secondary education (Altbach, 1999). The inability of the public sector to satisfy the growing social demand for higher education, the inability of public universities to offer courses that are employment-oriented and market-friendly, and the willingness of many households to pay for the higher education of their children have contributed to the fast growth of private institutions in higher education. Many of these are private for-profi t institutions that trade the stocks and shares of educational institutions (Ruch, 2001). A close scrutiny of

28


some of the private institutions (Varghese, 2004b) indicates that they are of recent origin, small in size, and offer courses in limited subject areas that are market-friendly, such as management studies, computer science, medical and engineering subjects.

Many of those who provide cross border e-learning facilities are private operators or operate on a full-cost basis. As noted earlier, deregulation policies and the globalization process have encouraged private operations in higher education in many countries. A large number of private higher education institutions operating in different countries are funded and at times managed by religious agencies, many of which are not-for-profi t institutions. As a result of the operation of private higher education institutions, pressure has been placed on public institutions to change. Studies (World Bank, 2002b) note that private sector institutions, although small in size compared to public universities, introduce elements of competition, innovation and management style that are considered to be more effi cient than their equivalents in public universities.

e) Pressure to change due to reduced public funding

One of the important features of the 1990s was the expansion of higher education in developed and in many developing countries, despite unfavourable funding conditions. This was made possible by privatization strategies for higher education, which enabled the sector to move away from reliance on the state. In other words, the contemporary political attitude to supporting higher education, the changing political scenario in eastern European countries, the inability of the state to continue its operations on the same scale in developed countries, and the structural adjustment programmes in developing countries all persuasively encouraged privatization in higher education.

Country experiences from Asia (Sothorn and Yiibing, 1995) indicate that privatization can imply no support from the state (full pricing) and partial funding by the state (quasi-privatization). In cases of quasi-privatization, there will be regulatory monitoring by the state. Whether privatization is quasi or total, new vocabulary has entered into the sector (Guttman, 2000); for example, university vice-chancellors and presidents can be referred to as chief executive offi cers, principals as managers, and parents and students as customers. The changing

29


terminology denotes a change in the attitude of individuals and policy-makers towards education.

Reform measures to overcome funding diffi culties were introduced, including the following: (i) cost-saving measures such as a freeze on both staff salary and recruitment; (ii) cost-sharing measures such as enhancing student fees and introducing student loans; and (iii) resource mobilizing strategies that included developing short courses or training programmes on a full cost-recovery basis, undertaking contract research, consultancies, linking universities with production sectors (Martin, 2000), and other various income-generating activities. All of these implied a change in the way universities operated, and posed challenges for management of the higher education sector.

1.3 Institutional restructuring of higher education

At present, the state and households are willing to support the expansion of higher education. The willingness of the household is reinforced by the capacity to invest, whereas the willingness of the state, at present, is not always supported by adequate public funding. Public support exists for policy measures that provide autonomy and operational freedom to institutions of higher education. Such an environment provides conducive conditions for the reorganization of universities and their operations. This forms the context for the institutional restructuring of higher education.

Most recent reforms in university education have focused on notions of effi ciency in operation, performance evaluation and accountability measures. It is this market approach to provision of public services from a managerialism perspective that lies at the core of the changes introduced in many universities. The massive sweep of liberal reforms that have structured and privatized the state sector, have left national education systems overwhelmingly part of the public sector. State provision of an increasingly massifi ed system of formal education remains the dominant form of organization of knowledge (Peters, 2003), although most governments have followed policies that indicate a process of incremental and parallel privatization designed to blur the boundaries between the public and the private. In other words, the process of institutional restructuring for public institutions

30


also implies the application of effi ciency parameters and accountability measures practised in the private and corporate sectors.

While it can be argued that improving managerial effi ciency is central to institutional restructuring, it is not always correct to associate the restructuring process with cost-saving reform measures. Needless to say, improving effi ciency in operation very often leads to a reduction in the cost of operation. But it need neither be the primary objective nor the sole purpose of institutional restructuring. This is certainly the case in East Asia where the the reorganization of activities in higher education institutions is very often orientated towards academic improvement, in terms of changes in the study programmes and courses offered. Academic activities lie at the heart of the operation of universities and institutions of higher education, and in many cases, the reorganization of courses and programmes need not necessarily lead to reduced expenditure for university operation.

Many of the restructuring processes have led to changes in programmes and courses, staff recruitment procedures, the status of university staff, and admission procedures, as well as the introduction of fees, changes in fi nancial management, and the establishment of cost centres or companies to coordinate resource mobilization activities. These changes individually and collectively have led to the reorganization of university activities in general. Universities have therefore become cost conscious in their operations, and planning at all levels of the organization has become unavoidable. Strategic planning is common in most of the universities and is considered a useful and necessary instrument in the process of institutional restructuring.

Institutional restructuring is defi ned as changes in both governance and management of institutions. Governance involves structures and processes of decision-making, whereas management implies the implementation of decisions. Taking and implementing decisions might entail, therefore, the creation of new structures, specifi ed criteria for the allocation of resources to various activities, the allotment of tasks to various groups, and the evaluation of performance. Structure mainly concerns offi ces, positions and formal roles within an organization. Criteria refers to norms that form the basis for distribution

31


of responsibilities and resources to all lower level units within an organization.

The institutional restructuring process has led to a reorganization of the various spheres of university activities. The present study will focus on changes in the following areas:i. restructuring of academic programmes; ii. restructuring of recruitment and staff management procedures; iii. restructuring of fi nancial management procedures; iv. restructuring of student evaluation procedures, in line with the

credit system performance evaluation procedures of employees; v. overall restructuring of the management of universities.

The process of change will be examined in its entirety throughout the study of an institution. While the institutional transformation may have overcome a crisis, it might have generated, in the process, an evolution of the actual mission and a reorientation of the university and its activities. The study will also analyse the possible effects of the restructuring process by taking into account the opinions of different stakeholders.

The process of institutional restructuring has changed the overall functioning of institutions and affected various groups in the university sector in different ways. It is believed by some experts that the restructuring process has altered the universitys mission, whereas others feel that there was no alternative but to reform the system. Instances of strong resistance, both to these changes and to the restructuring process, are common across countries. A continual process of bargaining and negotiating is characteristic of the restructuring effort. Certain universities have been more successful than others in their implementation of change. The present research will focus on institutions in which the restructuring initiative has been successfully implemented.

1.4 The countries and institutions studied

Education has played an important role in shaping the patterns of development in East Asian and Southeast Asian countries (World Bank, 1993, 2000; Tilak 2000). Economic progress in the region has been led by the export sector, which was highly labour-intensive. The

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skill intensity of the exports (Wood, 1994) was high, and regional and international competition was fi erce. An educated labour force could maintain a competitive advantage over exports. Therefore, increasing demand for an educated labour force formed part of the development process in these countries. Many countries in the region had high literacy and primary enrolment rates to begin with; others progressed quickly, which resulted in an overall improvement in the educational level of the population.

Pressure in these countries1 to expand higher education comes from at least three sources (Varghese, 2001a): the government and enterprises, to maintain their competitiveness in the world economy; the households, to improve individual competitiveness in the labour market for better jobs and higher wages; and pressure from the education sector due to the expansion of secondary education. A growing economy increases employment opportunities and enhances wage levels. Many of the economies are export-oriented, the export sector is labour-intensive, and the employment elasticity of the product in the sector is positive and high. In order to remain competitive, the export sector must rely on better-qualifi ed personnel. The demand for better qualifi ed people leads to the expansion of employment opportunities for graduates.

One of the distinguishing features of the regions economies was the low share of government expenditure to gross national product (GNP) in these countries. This share was maintained at around 20 per cent in many countries (Malaysia has a higher ratio of around 30 per cent). However, the social allocation ratios (the proportion of government expenditure going to social sectors including education and health) were higher. These greater allocations helped achieve higher levels of equality in the provision of basic education. In addition, expanding secondary education accompanied by higher household incomes increased the demand for higher education. Moreover, the increasing share of higher education has made this a non-elite sector contributing to distributive equality (Varghese, 2001a). Countries such as Mongolia and Vietnam have a different history. Being part of centrally planned

1. The remaining part of this chapter is based on the following studies carried out under the IIEP project study on institutional restructuring in higher education in Asia. See for details: Chien and Tho (2004); Narantsetseg and Boldbaatar (2004); Susanto. and Nizam. (2004); Suwantragul. (2004); Yahaya and Abdullah (2004).

33


systems, the state was the dominant, if not the sole player in all areas of activity, including education.

However, the economic crisis changed the situation dramatically in many countries of the region. The crisis began in Thailand in July 1997 when the baht lost roughly 15 per cent of its value against the dollar virtually overnight. The crisis then spread to Indonesia, Malaysia, Singapore and later to Korea. During the crisis period government debt doubled or trebled, interest payments accounted for the major share of public spending, and unemployment increased. The capacity of the state to invest in order to revive the economy was limited, and the higher education sector suffered considerably during this period (Varghese, 2001b). In Vietnam and Mongolia, the political changes transitions from a centrally planned to a market economy necessitated changes in the orientation and operation of institutions.

This study focuses on changes that have taken place in fi ve countries in Asia, namely: Indonesia, Malaysia, Mongolia, Thailand and Vietnam. These countries have varying levels of economic and educational development, especially in higher education.

Among these countries, Malaysia and Thailand were affected to varying degrees by the East Asian economic crisis, the impact of which was also experienced in the fi eld of higher education. Malaysia was able to protect itself from the crisis at a faster rate than other countries. More importantly, Malaysia is competing with other countries in the region to emerge as the leader in knowledge-based production. Its policy places a high priority on expanding and improving the quality of higher education. Thailand initiated steps to reform higher education in the 1990s, but the pace of reform seems to be slow. However, these two countries have been politically stable for a relatively long period and did not experience any political upheaval. However, some reform measures were halted during the period of economic crises. In other words, as noted earlier, the institutional restructuring process in East Asia is not an offshoot of the East Asian economic crisis.

Indonesia faced an economic crisis in 1999 perhaps more severe than other countries accompanied by a political crisis, having previously enjoyed a long period of stability. These crises provided, at least in part, the impetus for public sector reform. In Indonesia, the private sector

34


has a strong presence in higher education; nearly 95 per cent of higher education institutions and more generally, 62 per cent of enrolments in higher education are in the private sector. In all other countries selected for the study, the public sector was dominant in education in general and in higher education, although the situation is changing following the initation of reform processes and changes in rules and regulations to encourage and promote private sector ownership and operation of higher education institutions.

Mongolia and Vietnam had centrally planned economies until recently. Vietnam moved away from the centrally-planned structure in the mid-1980s while Mongolia transited to a market economy in the 1990s.

This move brought about many changes in the organization and provision of services in all sectors of the economy, including higher education. Not only was the private sector encouraged to operate, but existing public institutions were reorganized. The course structure and content were thoroughly changed to suit the needs of the market economy: new courses were introduced, new evaluation systems were put into place, and staff orientation became necessary.

The expansion of higher education in these countries is also partly due to expansion at the level of secondary education. Countries such as Malaysia, which is focusing on knowledge-based production and relying on export earnings, have demonstrated faster growth in higher education. However, it needs to be noted that one of the reasons for increasing enrolments in higher education institutions in Malaysia, particularly in 1999 and 2000, was the return of students studying abroad during the period of economic crisis (Varghese, 2001b). This also helped the private sector to grow during this period (Lee, 1999). More importantly, the progress made by Malaysia is also due to the fact that it invests nearly one quarter of its public expenditure in education and an equal share of the total education budget is spent on the higher education sector.

Universities have considerably modifi ed the organization of their activities. Many institutions enjoy enhanced autonomy in the spheres of fi nance, programmes and staff. With reduced dependence on government, universities have become self-governing institutions

35


with their own rules and regulations. They are now responsible for their actions and more accountable to stakeholders, which has changed both their overall structure and functioning.

The studies analysed the policy context of initiating changes in universities from a macro perspective, as well as examining both their nature and implementation from a micro/institutional perspective. While the fi rst part of each study was based on an analysis of policy shifts and interviews with certain initiators at the origin of the changes, the second part concerned an in-depth study of institutions that have experienced institutional restructuring in the recent past.

The major reform process initiated in Indonesia towards the end of the 1990s is working to constitute universities as legal entities. Some universities are well advanced in terms of implementing the reforms. Gadjah Mada University (UGM) is one of four prominent universities to become autonomous under the new reform measures. It is one of the largest public universities in Indonesia with an enrolment of around 50,000, 62 departments and 4,600 staff.

Three measures key to the restructuring processes are: (a) moves towards making the university a legal entity (corporatization); (b) restructuring of academic programmes; and (c) fi nancial management, which includes the changing fee structure, and commercial and non-commercial ventures. The university is introducing reform measures that totally alter its functioning, management and fi nancial arrangements.

The university reform process began in Malaysia in the late 1990s. One of the major reforms initiated was the corporatization of universities. The corporatized status allowed universities to form business entities, which could venture into income-generating activities, especially to meet recurring expenditure. More importantly, this implied a total alteration in the functioning of universities. Universities obtained more autonomy; they reorganized courses and departments, reallocated staff, and so on. The Kebangsaan (National) University of Malaysia is one such university, which implemented many of the reforms. In fact, in response to this effort, the university started UKM Holdings Sdn. Bhd. under the Companies Act and reorganized its faculties. UKM has an enrolment of more than 22,000 and an academic staff body of 1,700

36


spread across 12 different faculties. Important areas for the restructuring process are: (a) corporatization or formation of companies and commercial ventures initiated by the university; (b) academic auditing introduced at the university; and (c) fi nancial management, especially in the context of university autonomy and decentralization of powers to various faculties and departments.

In Mongolia, under the centrally-planned economic system, university authorities were centralized at the top. All decisions regarding teaching resources, students issues and employee social security were taken at the highest level of the organization. This model was a source of hierarchical bureaucracy, and thus the enthusiasm and motivation of the lower levels of the organization declined due to constraints on new ideas or creativity, while the middle level functioned as the messenger. The government withdrew fi nancial support to universities and they were given freedom to reorganize their activities, levy fees from students, and mobilize resources from other sources. Many university activities were reorganized and a credit system was introduced, which has infl uenced the teaching-learning process, the reorganization of curriculum, and teaching and student evaluation methods in Mongolia.

The Mongolian University of Science and Technology (MUST) introduced many of these reform measures. The university has a student enrolment of around 18,600 with 17 faculties and approximately 850 academic staff members. The academic structure comprises 17 schools with 128 chairs and over 40 research institutes and centres. By recognizing several of the countrys well-established research institutions, it has brought their resources within its reach. University activities, including research, have been restructured and reorganized. The reform process dates from the early 1990s when the university attained institutional autonomy. The introduction of a credit-based curriculum was a signifi cant step towards the restructuring of university activities.

University functioning in Thailand in the early 1990s was felt to be constrained by bureaucratic procedures. Plans were laid for universities to become autonomous and freed from bureaucratic control, particularly with respect to academic, personnel and fi nancial issues. The long range plan (1990-2004) envisaged that most public universities would become

37


autonomous by the end of the plan period, with students covering all operating expenses through student fees, in conjunction with student loan schemes. The fi ve new universities established after 1990 were created as autonomous institutes. But none of the existing public universities opted for autonomous status. King Mongkuts University of Technology Thonburi, Thailand (KMUTT) is the fi rst public university to make the transition from being a public to an autonomous university, and chose to have a dual track employment system. The university has an enrolment of approximately 10,000 students and employs around 1,300 academic staff (many of whom are temporary). This case study highlights the changes introduced in the functioning of a university when it becomes autonomous, the effects on management, and the dual system of staff recruitment and deployment the transition from civil service status to the university system.

Political change in Vietnam from 1986 onwards saw the emergence of a policy of moving away from centralized planning towards a more market-based economy. Pursuant to this policy, Vietnam entered a new phase of development. It transformed a highly centralized and totally subsidized economy into a free market, albeit with a state orientation. Another aspect of this renovation was the bringing together of institutions of higher education under one umbrella. Prior to the reforms, higher education provision was fragmented between various institutions. The renovation plan amalgamated the universities and institutes of Hue City into Hue University. The university now enrolls more than 50,000 students and employs around 1,200 academic staff. The amalgamation has many implications in terms of autonomous status, fi nancial management, and rationalization of the academic and administrative staff of the university.

1.5 Trends in institutional restructuring in selected universities

The studies on institutional restructuring in the selected countries indicate interesting trends. As mentioned earlier, the major reform initiated in Indonesia is the reconstitution of universities as legal entities. Under the new legal status, universities have a governance structure that includes a Board of Trustees, Academic Senate, Board of Auditors and Professors Council. Under the new system, the university rector and vice-rectors are not appointed by the ministry; they are nominated

38


by the Academic Senate and appointed by the Board of Trustees. The university does not report to the Minister of National Education.

As a legal entity, the university is permitted to run commercial ventures to mobilize resources, reorganize courses and programmes of study, and regulate enrolments. A Memorandum of Understanding is signed with the Ministry of Education for an agreed number of intakes. However, the universities are permitted to enrol a larger number of students than agreed, the additional cost of which is not covered by the government. The universities can also invest in profi table ventures. Under the new legal status, the university has a new governance structure under its own Board of Trustees.

Following the transition, university activities at GMU are decentralized and shared among university faculties and institutions. Most of the university community welcomed the changes, and hence the introduction of the restructuring process did not face strong resistance. The academic community in general is happy with the changes, although they too feel that the benefi ts are yet to become visible. The administrative staff have yet to realize any positive effects from the restructuring process and are not happy with the changes introduced in the university. The students too are unhappy regarding the increase in tuition fees. On the whole, the introduction of reforms was subjected to less resistance than expected.

Universities in Malaysia were corporatized with effect from 1998. The corporatized status allowed universities to become autonomous to form business entities. With the establishment of UKM Holdings Sdn. Bhd. the University of Kebangsaan Malaysia (UKM) could venture into income-generating activities. The management structure of the university was reorganized; the University Council was replaced by a Board of Directors, the Vice-Chancellor became the Chief Executive Offi cer, and so on.

One of the major restructuring measures initiated at UKM was the restructuring of faculties. For example, in 1999 four science faculties were amalgamated into one Faculty of Science and Technology. This was followed by the formation of the new Faculty of Social Sciences and Humanities, and later by the merging of the Faculties of Economics and Management. The agenda is the creation of an undergraduate academic

39


structure that refl ects the consolidation of knowledge, introduction of multi-disciplinary programmes, and specialization in course areas that are relevant and market-friendly. The restructuring was expected to lead to a more optimal use of resources.

The implementation of the restructuring process was thought out well in advance. In 1996, the University Council proposed a review of the existing academic faculties. A working paper was produced by the Vice-Chancellor. After discussion, an agreement was reached to form a Restructuring Committee to examine and make recommendations for a subsequent university retreat. This committee constituted sub-committees to make recommendations and suggestions regarding restructuring. These suggestions were discussed during the university retreat.

There was resistance to change. However, the changes were introduced slowly, step-by-step, with the restructuring process beginning in one area, and after its completion, moving to another. The staff were given enough time to respond and the feedback system functioned well. As an example, the restructuring process in social sciences took around three years. The Vice-Chancellors announcement that there would be no redundancies gave people confi dence to accept the reforms.

Most of those interviewed agreed that the restructuring process helped to strengthen academic aspects. But there is less certainty regarding the supposed cost savings from restructuring. However, it is commonly agreed that the new structure and procedures have increased academic research and publications.

The academic structure comprises 17 schools with 128 chairs and over 40 research institutes and centres. By recognizing several of the countrys well-established research institutions, it has brought their resources within its reach. The university staff consists of the President, three Vice-Presidents, professors, associate professors, lecturers, research associates, and administrative and technical staff. The university has a Governing Board, an Academic Council and a Presidents Council.

In Mongolia, the academic restructuring of MUST changed student evaluation procedures and introduced the credit system. The

40


implementation of a credit system also necessitated the preparation of handbooks and guidelines on advance self-study for students. The changes resulted in the emergence of a totally new range of operational activities, such as faculty member and student records, attendance and examination scores, performance-related pay for academic staff, and so on. As a consequence, the university had to develop a reliable Management Information System.

The management of MUST views the implementation of a credit-based system not only in terms of the collection of credits included in training curriculum by academic staff and students, but also recognizes that effi cient forecasting and estimation of creativity and innovation in the market generate more success. Therefore, the periodic development of a credit-based system should not be focused on the concepts but should be persistent in its motivation of academic staff and students in terms of fi nancial planning.

The university has a Governing Board, an Academic Council and a Presidents Council. The President is the executive person responsible for the university and convenes and chairs the Presidents and the Academic Councils. Academic leadership and overall institutional planning are the Presidents responsibility. The President is nominated from the Governing Board and appointed by the Minister of Education, Culture and Science. The Vice-Presidents are responsible for the implementation of the universitys missions and strategy. There are three Vice-Presidents at the university.

The supreme authority of the university is the Governing Board. The Governing Board is responsible for deciding the organizational structure of the university, approving annual budget allocation and investment priorities, and determining students tuition fee rates and dormitory service payments.

The Academic Council defi nes policies and guidelines regarding the quality of scientifi c research, higher education training, the implementation of new technology, and enhancement of services. The Academic Council is composed of leading scholars and university professors nominated by the Presidents Council.

41


The management and control of the university and all its property, revenue, business and affairs on a consensus basis are vested in the Presidents Council. It develops action plans, assesses the annual plans of schools affi liated to the university, and controls and supervises the implementation of action plans.

In Thailand, as mentioned earlier, KMUTT was the only existing university to make the transition from public to autonomous university. KMUTT has total control over its budget, which allows it to own and manage property, grant authority to set up new faculties and departments, and introduce new academic programmes.

The university has a University Council, an Academic Council and a Personal Administration Finance and Assets Management Committee. The staff members were given an option whereby they could continue as civil servants or become university employees. A large proportion of employees (57 per cent) opted for university employee status, while the remainder continued to be part of the civil service.

The introduction of reforms was subjected to resistance primarily due to uncertainty surrounding the options to be exercised by employees. In terms of employment security and long-term pension benefi ts, people would prefer to continue with the present system of being part of the civil service. Since this is the fi rst university to have opted for autonomy, the lessons learned from its experience will have wider implications.

In Vietnam, as noted above, a renovation plan amalgamated the universities and institutes of Hue City into Hue University. University administration is split between two levels: Hue University and the affi liated universities. At the Hue University level, administrative arrangement is responsible for developing policies and strategies, staff recruitment and staff management, budget allocation, design and introduction of new courses, an so on. In other words, administration at the Hue University level takes all crucial decisions regarding university management.

At the affi liated university level, each university is responsible for implementing programmes proposed by Hue University, adapting these proposals in ways appropriate to it. In addition, each university can

42


elaborate proposals that suit best, pending approval from Hue University. As such, the affi liated universities function more as implementing units than decision-making units.

1.6 Some features of introducing institutional restructuring

The following paragraphs attempt to draw some conclusions common to all the different universities studied in the countries selected.

a) The pressure for institutional restructuring came from reforms initiated by national governments

The institutional reform measures initiated by all the universities studied clearly indicate that the impetus for reform came from national governments. In fact, the institutions were responding to steps initiated by the governments. In Thailand, for example, the issue of university autonomy had long been discussed, but no public university, until KMUTT, was willing to implement the necessary changes. In Indonesia, the government initiated steps to make universities legal entities, and Gadjah Mada University was one of four universities to implement the reforms. Reforms in higher education were on the agenda from the mid-1990s in Malaysia, with the intention of improving the competitiveness of the economy and competition among universities, so as to improve their operational effi ciency. In Mongolia and Vietnam, the shift in politics from a centrally-planned to a market economy provided the external environment for changes in the higher education scene. Some of these efforts were supported by external funding agencies.

The pressure to restructure did not come from within the institutions undergoing the restructuring process. The institutions were responding to reform measures initiated at the national level. The major contribution of the universities can be seen in terms of concretizing the reform measures in their institutional context and carrying forward the diffi cult task of implementing reforms.

b) What infl uenced the national governments to initiate changes?

There is a general belief that the restructuring of universities and institutions of higher education was initiated due to lack of funding support from public sources, and that the changes were therefore intended

43


to mobilize fi nancial resources for universities. An analysis of reforms in the universities studied shows that this is not true, at least not in the East Asian context, although it is a fact that all reforms were intended to enable universities to mobilize a part of their revenue. However, this was not the sole purpose of reform. The study of Malaysia notes that important factors infl uencing reforms at the national level included pressure to cope with advances in information and technology, the need for more accountable public administration, and concern for providing quality education in relevant areas of study. This is also true for other countries in the region. The fi nancial freedom granted to universities during the initial stages of reform implementation was rather limited in Malaysia and they still depend on public funding for most of their activities.

In Indonesia and Thailand too, the universities continue to rely on public funding for their core activities, although the restructuring process helped to initiate steps to mobilize funding. However, this was not the primary concern; this was to improve national competitiveness by providing quality higher education. Even the reforms in funding were aimed initially at introducing incentive-based funding in Indonesia, rather than a withdrawal of funding by public authorities. The incentive funding began with a project called Development of Undergraduate Education (DUE), which was funded by the World Bank.

In Mongolia and Vietnam, the changes in the education sector formed part of broader political changes. In these cases too, the primary concern was to change the curriculum and course contents of higher education to make them relevant and able to meet the requirements of a transition economy transitioning from a centrally-planned to a market economy. The mobilization of additional resources was not the overriding consideration behind the changes introduced in higher education in these countries, although the reforms did include the possibility of additional funding.

One general trend in recent times, in all cases except Thailand, has been the considerable increase in interaction with outside institutions. For example, an Indonesian report indicates that collaborations between national and international institutions, agencies and universities have mushroomed as a result of globalization. Malaysia, too, as mentioned

44


earlier, has been competing to emerge as one of the fastest growing economies with a strong emphasis on technological development. The developments both in Mongolia and Vietnam are infl uenced not only by international agencies, but also at times supported by funding agencies.

c) All reforms indicated a move away from government control, but maintained the public university status of the institutions

It is interesting to note that although reform efforts were initiated by the government, they focused on shifts to areas way beyond its control. There is a general belief that too much bureaucratic control is not good for universities or their growth. Academics have always sought academic freedom and university autonomy. The government, while funding the universities, wanted to control and regulate university operations. Needless to say, in many countries, too much control was opposed by the academic community. Therefore, what has developed is a reform process that takes place within the public sector, but permits autonomy for institutions to operate independently.

However, this move does not absolve governments from the responsibility of providing funding support. The government in all these countries continues to support the universities. But the change, perhaps, is that this support cannot be taken for granted. Countries have developed objective criteria for resource transfer from the state to the universities. University performance is monitored and outcomes are evaluated. The criteria take the form of contractual arrangements and conditions must be honoured.

The institutions are also not convinced about the merits of moving completely out of the public realm. Moving from public to private operations can perhaps create high uncertainties. The public sector at least guarantees job security for employees and minimum funding for the survival of institutions. The institutions also want to retain the benefi ts of government support, that they enjoy in the public sector. It may not be unrealistic to argue that their experience during the East Asian economic crisis, which clearly indicated the need for support and protection, may have reinforced the case for public support.

45


It is interesting to note that even when people criticize public intervention, no one prefers a situation of total absence of state intervention and support. In fact, these reforms and the institutional restructuring process have redefi ned the relationship between the public authorities and university functioning. The nature of the relationship between the state and universities and the areas of their operation are more clearly defi ned now than ever before. In other words, the institutional restructuring process has redefi ned the relationships between the state and universities, maintaining the image of the university as a public institution and retaining the benefi ts associated with being a public institution.

d) Universities became autonomous entities

The singular feature of all these reform measures at the national level was the granting of more autonomy to universities. In all countries, as the case studies indicate, the universities gained more freedom and autonomy. However, the question is autonomy from whom and for what?

The infl uence of the government on day-to-day university management declined after the move towards autonomy. For example, in Indonesia, the universities were previously expected to report to the relevant government department. This provision has been changed as part of the recent reforms. In Malaysia, although a large share of funding still continues to come from public authorities, the ministry does not directly supervise university activities. In Thailand, the move to autonomy had long formed part of state policy but no university was willing to effect the necessary changes until the case of KMUTT, as the case study indicates. This also involved a change in staff status from the civil service to university staff, which also affects recruitment procedures and employment conditions. In the case of Mongolia and Vietnam, the change is more substantial since the universities fell under the direct supervision of the government, departments or ministries of education. Today, most of the decisions pertaining to universities are taken within the bodies constituted by the university. The universities possess their own management structure and enjoy a high degree of autonomy a signifi cant feature of changes taking place in this part of the world.

46


Universities enjoyed autonomy previously, however, this autonomy was confi ned either to paper or academic matters. At the close of the fi rst decade of the twenty-fi rst century, autonomy is increasingly exercised in matters pertaining to the introduction of courses, recruitment of staff, decisions on admissions, and fi nancial matters even when a large share of funding still comes from the government. The major observed change concerns the granting of authority, which allows universities to take their own decisions.

e) Academic restructuring is core to institutional restructuring

Curriculum changes and reorganization of courses are core to many of the reform measures. In Indonesia, undergraduate courses were reviewed and reorganized. In Malaysia, faculties and courses were reorganized and merged. At UKM, traditional departments were abolished and new schools and centres of study were established. Faculties were amalgamated. For example, four science faculties were merged to form the Faculty of Science and Technology, followed by the integration of the Faculty of Language Studies, the Faculty of Development Studies and the Faculty of Social Sciences. More recently, the restructuring process involved the amalgamation of the Faculty of Economics and Business Management.

In Vietnam and Mongolia, course contents were changed to refl ect the requirements of the new market-oriented economy. Five colleges and research institutions were merged to form Hue University in Vietnam. The reorganization of these faculties helped create standardized units for academic and management purposes. Courses were reorganized and faculties were amalgamated to form more viable units, to avoid overlapping between subject areas. At present, Hue University consists of six schools and fi ve centres. The change in university curriculum is a major step since universities are traditionally slow to adapt to change.

In Mongolia, courses were reorganized and some departments were enlarged then divided into two. For example, in 1995, the School of Mechanical Engineering and Technology was split into two separate schools, while in 1996, the School of Geology and Mining Engineering was divided into the School of Geology and the School of Mining Engineering. Furthermore, the university founded new schools and introduced new courses. In 2000, with the foundation of the School

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of Engineering Education, three schools were built, namely the School of Mathematics, the School of Chemical Technology and the School of Humanities. Similarly, research activities were restructured and reorganized along the lines of a university research centre a standard that has been enforced steadily throughout university research and development activities. Consequently, the Mining Institute, the Institute of Thermal Technology and Ecology and the Textile Research Institute were founded within the Mongolian University of Science and Technology.

In addition to these reorganizations, the university also established off-campus education. The Mongolian University of Science and Technology established branches in the countryside, and consequently, in 1997, two schools emerged in Uvurkhangai Aimag and Erdenet City, with another school opening the following year in Sukhbaatar City.

All these efforts reinforce the point that fi nancial resource mobilization was not the major concern of institutional restructuring in East Asian countries. Crucial university functions, such as programmes of study and courses, were reorganized to make them more relevant to

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