by GARRY CARNEGIE

Global university rankings are more controversial within our universities than many of us may imagine.  Many universities, for example, aspire to enter the elite-level Top-100 in global rankings.  The University of Bologna is one of these institutions and is moving closer to reaching this ranking goal. According to the Pro-Rector Mirko Degli Esposti, “the high consideration in the world academic panorama of the university is a great source of pride for the university”.

The mission statement of the University of Bologna, however, does not specifically illuminate this symbol of pride.  The following pillars (three in all) are outlined in the following Mission:

… strive to transmit knowledge, experiment with techniques and develop the ideas that will address the transformations of our time. Building on centuries of history and fuelled by an inexorable drive to innovate, the vocation of the University for education and research is rooted at the very heart of our life and autonomy.

The third pillar identified is the maintenance of dynamic relations and exchanges with society as a whole and the world of work.

These pillars reveal a “broad landscape” of the modus operandi of this longstanding and internationally well-known university.

In CMM this writer examined the tension and cultural issues being faced in Australian public universities linked to the difference between “what we value” and “what we measure.” These notions are indeed not the same.

In this contribution, the key focus is placed on the effects of accounting, including KPIs in performance measurement, when these metrics are utilised by global ranking agencies.  This is intended to illuminate how our universities have moved from a university model based on cooperation between public universities to one premised on competition between the same institutions.

Typically, problems arise and tensions build when we allow what we measure to dictate what we value.  Nowadays, KPIs surround us, infiltrate our lives, and drive our everyday actions in organisations.  That effect is reinforced when these metrics are aggressively set and/or incentivised by means of performance loadings or bonuses or other forms of additional benefits.

It is commonly recognised that the purpose of KPIs or metrics is to drive productive action, both encouraging such action in “designed areas” and, effectively, discouraging action in “non-designated areas.”  Therefore, accounting by means of KPIs both enables action in “designed areas” and disables action in “non-designated areas.”

The global university ranking agencies are, therefore, effectively dictating where to place the goalposts of university performance measurement.  Our public universities appear to be comfortable, or at least ready, to accept this subordination.  Mission statements, on the other hand, appear to have become marginalised.

More generally, KPIs themselves are ever multiplying in number, growing in complexity, and are seemingly becoming more aggressively applied, including during this global pandemic era.  However, the proliferation in the number of different global ranking is confusing, which has begun to undermine the purpose of ranking universities globally.

What we value in public universities are their core, often non-negotiable values. These are commonly held macro-perspectives on public universities which tend to be broadly held in society in what is known as a system or plan of higher education and research provision.  For instance, explicit mission and vision statements of our public universities, combined with appreciation of, and respect for, broad-scope accountability, are notions specifically related to the purposes of our universities (otherwise known as missions)

Public universities are expected under their enabling legislation and constitutions to act in the public interest and for the benefit of society.  Universities under such a system are to co-operate to achieve maximum social benefit in the nations in which they were founded and, more specifically, to contribute broadly and positively to nation and region building.  A system of public universities is not premised on competition fuelled by global rankings, which typically lead to the removal of competitors, under the notion of “let the strongest survive and let the weakest fall.”

A strong institutional focus on what we measure, with a lighter focus on what we value, leads to an emphasis on “what we will become” in driving productive action or organisational performance.  Under global university rankings, the major preferred outcome under this regime is widely interpreted and understood as upward movements in such ranking schema.

On the other hand, a strong institutional focus on what we value, with a lighter focus on what we measure, is an emphasis on the modus operandi of public universities or the “macro-contributions” approach to university management.  These institutions are expected to provide public benefit and serve societies with an emphasis on co-operation across the sector.  More specifically, we trust our public universities around the world to collaborate effectively in answering “big questions” and in solving “wicked problems” in society.  It is trusted that this is (or should be) surely a top priority of universities today.

Competition is the opposite scenario which gives rise to competitive self-interest universities.  This initially started as public universities taking on a “commercial focus” under notions of “new public management” (NPM), including the adoption of full accrual accounting for financial reporting purposes.  This approach has ascended to the apparent present-day fascination for the “micro-measurement” approach to university management, operates on a diet of ranking ascendency in “competitive markets”.

Universities in certain education export countries, such as Australia, especially where English is the national language, appear to have overlooked across time the risks of progressively increasing their reliance of income derived from fee-paying onshore overseas students as a proportion of their total income from continuing operations (Carnegie et al., 2021a, 2021b),[1] which is a strategy that is indeed rewarded by the QS university ranking for example, as addressed by Carnegie (2021) in CMM (16 September).

Q: What is a key lesson to be learned?  In broad terms “Accounting [including performance measurement embracing all forms of KPIs,] “is not a mere neutral, benign, technical practice” (Carnegie, 2020, p. 72). Therefore, it is important for accountants and non-accountants alike (i.e., all of us) to be apprised of the effects of accounting in the world.  Accounting is not without impacts on human behaviour (i.e., including our individual behaviour as very few of us do not have KPIs) and on organisational and social functioning and development as well as on our natural environment.

A: Accounting is not mere technical practice; it is also social and moral practice (Carnegie et al., 2020, 2021).[2] It’s effects in the world need to be identified, disclosed and widely understood in helping to create a better world.

Garry Carnegie, Emeritus Professor RMIT University

[1] Respectively available at: Public universities and impacts of COVID-19 in Australia: risk disclosures and organisational change | Emerald Insight and “‘Taming the black elephant’: assessing and managing the impacts of COVID-19 on public universities in Australia”, Meditari Accountancy Research (forthcoming).

[2] Respectively available at: It’s 2020: What is Accounting Today? (wiley.com) and https://www.ifac.org/knowledge-gateway/preparing-future-ready-professionals/discussion/redefining-accounting-tomorrow