Hans-Ulrich Küpper
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Management Mechanisms and Financing of Higher Education in Germany
2002-04
September 2002
1
Prof. Dr. Hans-Ulrich Küpper, Ludwig-Maximilians-Universität Munich, Institute of Production Management
and Management Accounting, Director of the Bavarian Institute for Research and Planning into Higher Education, Ludwigstraße 28/RG, D-80539 Munich, Germany, kü
[email protected]
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Management mechanisms and financing of higher education in Germany
Abstract
Not only the economy but also higher education has to face competition. There are many efforts to pave the way for reforms making use of economic terms and concepts. In this contribution it will be elaborated to what extent the forms of financing higher education can contribute to the management of higher education. In doing so, the general framework in Germany has to be taken into account which differs from that in other countries.: •
the absence of fees as an instrument for the financing and the management of higher education,
•
the fact that only few students are selected by the institutions of higher education, students of disciplines with strong demand are distributed among the universities by a central agency.
The contribution has four parts: Based on an analysis of the German system of higher education (1) different management types provided by a new system of distributing students among the different types of institutions (universities and universities of applied sciences – Fachhochschulen) are examined (2). Subsequently the management of universities by distributing students within the university will be discussed. In this context, it is recommended to introduce a market-oriented system of tuition fees instead of provisions like deciding on student admission on the basis of available capacity, curricular standards (CNW´s) and centralized procedures of the distribution of students (3). Finally, the conclusions of these reforms for developing systems of information demand analysis (cost and activity accounting, controlling) are elaborated (4).
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Contents
1. German universities in transition 2. Problems and failures of the contemporary system of higher education in Germany 2.1. Deficits and framework of the contemporary system of higher education 2.2. Parameters and objectives of improvement 3. Core elements to manage the system of higher education 3.1. Important dimensions of managment mechanisms 3.2. Levels to manage the system of higher education 4. Management mechanisms at the level of different types of universities 4.1. Actual problems of the management mechanism 4.2. Advantages of a market-oriented system of fees 5. Management mechanisms within the universities 5.1. Controlling systems for universities 5.2. Accounting as an important part of the universitary management system 6. Conclusions
References
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1. German universities in transition
In the last years, governments and politicians, industrial managers and society have been critizing German universities strongly (Küpper 1998). They see a lot of shortcomings in education, in research and in the management of the universities. Only few German scientists seem to be on top level of science in the world. Their research is quite often not of internation standing. There is not enough student exchange with other countries.
One important reason of this criticism may be the unification of Europe and the globalisation since the end of communism. Society recognizes that there is a worldwide competition not only in economy but also between universities. People discover the importance of universitary education and of excellent research, they recognize science to be the basis of national prosperity in the future.
Wheras the ‚students revolution‘ of the 1960`s strengthened the democratic structure of the universities today, economic ideas and concepts come to the fore. In the seventies of the last century, the codetermination of the representatives of students in the boards of the university and faculties became important. The organizational structure of the unversities was changed. Contrary to this, in the ninetieth the influence of these boards has been reduced, the leaders, i.e. the presidents of the universities and the deans, have gained much more power (Fandel 1998). Universities shall become more efficient and better in international competition. Therefore, economic ideas of competition and ecnomic instruments of management became more important. Today, the mechanisms of management and financing of the whole system of higher education are discussed more and more in Germany.
In this contribution I will elaborate to what extent the forms of financing higher education can contribute to the management of higher education. This will be done in four parts: Based on an analysis of the German system of higher education (1) different management types provided by a new system of distributings student among the different types of institutions (universities and universities of applied sciences – Fachhochschulen) are examined (2). Subsequently, the management of universities by distributing students within the university will be discussed. In this
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context it is recommended to introduce a market-oriented system of tuition fees instead of provisions like deciding on student admission on the basis of available capacity, curricular standards (CNW´s) and centralized procedures of the distribution of students (3). Finally, the conclusions of these reforms for developing systems of information demand analysis (cost and activity accounting, controlling) are elaborated (4).
2. Problems and failures of the contemporary system of higher education in Germany 2.1. Deficits and framework of the contemporary system of higher education
One may wonder about the heavy criticism of the German universities as they had to face great challenges during the last thirty years. The number of students doubled between 1970 and 1990. As compared to that, the financial and other resources paid by the government did not rise, they stayed nearly on the same level. Nevertheless, the quality of the education in most departments stayed on a high level. Most German students are successful when they go abroad. I think, the deficit of the universities does not primarily lie in teaching but in research. Many German scientists are not international enough. They are not frequently present at international conferences and their publications are not present enough in high ranked international journals. Some of the best young scientists go to America and don’t come back.
Even if German universities don’t get enough money, the central deficit of the German universitary system does not lie in finance but in structural deficiences. There are some important parameters which undermine the competitiveness of German universities and differ from that in other countries: •
the absence of fees as an instrument for the financing and the management of higher education,
•
the fact that only few students are selected by the universities themselves, students of disciplines with strong demand are allocated by a central office for the allocation of study places,
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•
the number of students which have to be trained by a faculty is calculated with a formula fixed by capacity regulations. This does not correspond with space and equipment in a lot of disciplines and can only be changed in a difficult political process,
•
the fact that based on the constitutionally guaranteed free choice of occupation and training institutions, students can take legal action for admission,
•
these courts often decide against universities; one court judged that the universities must not look after an “inadmissible quality” of education.
2.2. Parameters and objectives of improvement
In last years, many universities and departments tried to improve their education by a lot of measures. They installed introductory courses in learning techniques which are needed by a student, they strengthened the consulting of the students. Methods and procedures to evaluate courses, disciplines, faculties and universities were introduced (Harnier u.a. 1998). In many disciplines and faculties the examination system was changed to credit points. Over the past few years, some departments introduce bachelor as well as master courses beside or instead of the Diplom. I think these improvements are important. But they are not enough. The German system of higher education needs strategic changes to reach that competitivness that their politicians, economic managers and people demand.
Therefore central parameters of the framework and the system of higher education in Germany have to be changed. The most important of them seem to be: •
The universities must get the right to select their students by themselves.
•
All students must have the chance to select a university.
•
That means, that the system of central distribution of the students in the disciplines with strong demand has to be abolished at least in some disciplines as business administration.
•
The ratio between the number of students and the number of faculty, especially professors, must be reduced to improve the education for high potentials.
•
The universities must differentiate their education to a higher degree.
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•
The universities must achieve more autonomy. One has to follow the organizational principle of subsidiary, the universities should decide more frequently without the government. On the other side they gain more responsibility. That refers to the development of efficient instruments to control them and to measure their performance.
•
The management of the universities must be made more efficient, they need professional persons on top and in the boards, if they are scientists or experts from outside.
In the present situation I see a chance to realize at least some of these objectives. Many people in Germany are aware that the system of higher education has to be changed as it influences the know-how which is the most important, perhaps the only, resource of German competitiveness in globalisation. In my point of view, there are two central instruments to reach this goal: to change the distribution of students to the different institutions of higher education and to install new mechanisms of management and controlling within the universities. In both financial aspects play a prominent role. Before analysing these two instruments we have to look at the core dimensions and levels of the system of higher education.
3. Core elements to manage the system of higher education 3.1. Important dimensions of managment mechanisms
The deficits in the German system of higher education make clear that we need other mechanisms to manage and to control this system. In the economic sciences one knows different mechanisms to coordinate the demands, the activities and the decisions of the different units on a global level, within a national economy or within a firm. I think some knowledge of this area is transferable to social systems. Therefore it is suitable to describe and analyze the system of higher education. The most important dimensions of these management mechanisms are (Küpper 2001a) •
the organizational structure,
•
the mechanisms of planning and control,
•
the incentive system,
•
the information systems and
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•
the coordination mechanisms.
The organizational structure is characterized by the distribution of tasks and responsibilities which determine the hierarchical structure of an institution. The processes of planning and control are determined by the centralization or decentralization of decisions and the number as well as the type of inspections. Incentives can be monetary and non-monetary. Within universities, non-monetary incentives like time for research, free choice of research issues, reputation and so on are important beside monetary aspect in salary, personal and asset resources etc.
With these dimensions one can characterize different management mechanisms of economic and social systems (see figure 1). There are two extreme types: on the one hand side we find centralized coordination systems. In such systems many decisions are centralized; the system has many aspects of a planned economy. At the other end there are decentralized systems; there we have some elements of a market; the activities within such a mechanism are coordinated on markets. Between these ends we can find several mixed types. Until now, the German system of higher education has many aspects of a centralized system, e.g. the absence of fees, the central allocation of part of the students to the universities and the mechanisms to distribute resources.
dimensions
specification
organisation
hierarchy .....................................................autonomy
planning, control
bureaucracy.......................................related to the market
motivation
obligation...........................................................incentives
information
related to supply....................................related to demand
coordination
plans........................target agreement......................prices
centralized planned economic systems
decentralized market economic systems
Figure 1: Important dimensions and specifications of monitoring systems
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3.2.
Levels to manage the system of higher education
The system of higher education is determinded by a lot of regulations and political decisions. They refer to different institutions and persons. In Germany, we have to distinguish at least between three levels of the whole system (see figure 2): •
the types of institutions for higher education,
•
the different institutions within one type of them and
•
the departments within one of these institutions.
Levels of management
Types of institutions
Institutions
Departments
Universities Universities of applied sciences Business academies
University A
department 1
University B
department 2
Uni C
department 3
...........
Figure 2: Levels of the system of higher education
The structure of the system of higher education is determined by law and politics. In Germany, scientific universities and the universities of applied sciences („Fachhochschulen“) are two different types of universities with quite different legal status, tasks, rules of admission and types of professors. Scientific universities are more theoretical, universities of applied sciences more practical oriented. Until now, professorship at a scientific university requires not only a doctor’s degree but also a habilitation. This postdoctoral lecture qualification will be changed in future, but the scientific demands will remain, for example several papers in high ranked scientific
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journals. Prerequisite of a professorship at a university of applied sciences are some years of practical experience beside the doctorate. In some countries, especially in Baden-Wuerttemberg, after 1975 several business academies (Wissenschaftsrat 1994, Zabeck/Zimmermann 1995) have been installed. They mix academic and practical education. Their students are trained at the academy for six months and work in a company like Daimler, IBM, Bosch and so on for the rest of the year. The course of studies lasts three years and is completed with a diploma which is rated like the diploma of a university of higher education.
4. Management mechanisms at the level of different types of universities 4.1. Actual problems of the management mechanism
One of the most important problems of the German system of higher education is the distribution of the students to the different types of institutions. Although in Germany the part of young people who want to attend a university is not higher than in other countries like France, United Kingdom or USA, in many disciplines we have the worst relation between the number of students and the number of students at the scientific universities. The reason for this failure lies in the distribution of the students to the different types of academic institutions. Today, most students attend a scientific university, fewer a university of applied sciences. The business academies exist only in few countries of Germany. This allocation is determinded by the central system to calculate the places at a university by the so-called ‚curricular standard CNW‘. For example, in business administration this CNW is 1.9 for scientific universities and 5.4 for universities of applied sciences (see figure 3). That means that a scientific university has to accept nearly three times as many students as a university of applied sciences. degree course
university
university of applied sciences architecture 4,8 7,3 civil engineering 4,2 6,4 business administration 1,9 5,4 electrotechnology 4,2 6,4 computer science 3,6 6,2 mechanical engineering 4,2 6,4 industrial engineering 2,0 5,9 Figure 3: curricular standards for selected study courses with admissions restrictions
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In consequence, most of the scientific universities in Germany suffer from overload, whereas some universities of applied sciences seek for students. The allocation of the students to both types of institutions in Germany in the years 1990, 1995 and 2000 is shown in figure 4 (Bundesministerium für Bildung und Forschung 2000/2001). At scientific universities, we find a lot of mass lectures with 200 to 1000 students. On the other hand you find small classes with 20 or 30 students at universities of applied sciences and business academies. I think that this is one reason why some young people first want to make an application at an academy or a high ranked university of applied sciences; if they don’t succeed they accept a place at a scientific university. The education at scientific universities may be efficient in an economic sense but it is not suitable to educate high potentials in sciences.
university of applied sciences university
numbers in 1000 and proportions in %
2000 1858
1800
1799
1712
1600 22 %
1400
24 %
26 %
76 %
74 %
1200 1000 800
78 %
600 400 200 0
317 35 % 75 %
1990
262 31 %
313 31 %
69 %
69 %
1995
2000
S tud e nt b eg in ne rs
148 38 % 62 %
1990
1995
2000
stu d en ts
1990
208 36 % 64 %
1995
198 35 % 65 %
1999
g ra d ua te s
Figure 4: student beginners, students and graduates of universities and universities of applied sciences in Germany, 1990 - 2000
In some disciplines like business administration and engineering the business academies carry a relevant part of the students, but only in few German federal
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states. Figure 5 shows that in Baden-Wuerttemberg (Statistisches Landesamt BadenWürttemberg 2001) an increasing part of graduates comes from this federal state.
8000 716 0
numbers and proportions (%)
7000 591 7
6000
25 %
university
544 7
527 1
529 8
5000 25 %
29 %
429 5
4000
Berufsakademie
28 %
326 1
32 % 32 %
3000 250 0
59 %
25 % 61 %
2000
university of applied sciences 21 %
27 % 59 %
224 4 26 %
19 % 33 % 124 9
67 %
1000 0
77 %
4%
49 %
8%
14 %
10 %
12 %
1980 1985 1990 1995 2000 eng ineer in g
35 %
47 % 38 %
42 %
45 %
29 %
16 %
885 639 82 % 18 %
1980 1985 1990 1995 2000
856
3%
71 %
69 %
29 %
28 %
969 3% 61 % 36 %
105 1 5% 71 % 29 %
1980 1985 1990 1995 2000
ec onom ic s
S ocia l affairs
Figure 5: Alumni in ecomics, engineering and social affairs at universities, universities of applied sciences and Business academies (Berufsakademien) in BadenWuerttemberg, 1980 - 2000
4.2.
Advantages of a market-oriented system of fees
The distribution of the students to the different types of academic institutions seems to be one of the central problems of the German system. To change this allocation will take a long time. Therefore one cannot be optimistic in this point. The allocation whithin one type of institution, especially between scientific universities, could be improved in a shorter time. In my opinion, the introduction of a market-oriented systems of fees can be an efficient instrument to realize several objectives named above.
In Germany, important political groups and their official representatives are explicitly against the introduction of fees. The German SPD-oriented government introduced in
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the framework for higher education universitary law a prohibition of fees for the first academic study. But it is not clear if this paragraph will stand on the Federal Constitutional Court and further elections in Germany. Therefore it is worthwile to analyze the arguments and the possible forms of fees. I personally believe that we will have fees in Germany more and more in the next years. In economy one can demonstrate that supply and demand is coordinated on markets much more efficiently as by centralized plannig systems. This argument is also true for universities. The lack of fees produces al lot of failures and undesirable developments. For example it does not ensure that young people of the lower social classes go to universities. In Germany their share reduced in the last 20 years continually (Schnitzer et al. 2000). As more students come from upper classes, this fact means that the lower classes finance by their taxes the (free) study of the young generation of the upper classes as several scientific studies showed (Grüske 1994, Grüske 2002). Therefore one can say that the renunciation of fees is unsocial.
The central argument for fees lies in their function as a parameter of coordination between the supply and the demand on study like a price on a market. For this reason in my opinion one should avoid to take them as an instrument of financing. Fees can be effective in three functions : •
they coordinate the demand with the supply of education in the different disciplines at different universities;
•
they motivate the students to study; if students pay fees they will use the university more efficient as before and reduce the duration of studies, as one can see in serveral countries;
•
like a price they inform about the value of study, the characteristics and the quality of a study; in order to achieve these functions fees must differ beween disciplines and universities.
To obtain these functions fees must be the result of decentralized (market-) decision processes. They must not be determined by a central government. The universities and especially their faculties must get the right to decide on their own fees. If one faculty is attractive to students, if their education is the basis for a good profession, if its quality and scientific standards meet to the demands of students, such a faculty
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can ask for high fees. On the other side, if a faculty has free capacity their professors are aware that they have to change their education and to reduce fees.
In order to use fees for coordination and not for financing of the universities, it is necessary to allocate at least a part of public funds related to the inscribed students and the fees. One way could be that each person who has the right to study on the basis of a relevant higher education entrance (Abitur) gets a virtual study voucher. This voucher substitutes the right to study without fees and can only be taken for study. It may differ to examinations so that people who got the right to study at scientific universities can use a higher amount to pay more fees. The amount must not be sufficient to finance the whole study. Perhaps it is enough for a short study at a business academy or a university of applied sciences in a discipline with low fees. But it will not be enough to finance the fees of an attractive study with high demands and high costs.
Therefore two further aspects seem to be important. On the one hand universities should get further funds from the government as a basis regardless of the types and the number of their students. Such a direct financing by the state gives the possibility to support tasks like research which don’t depend on students and to support disciplines which seem to be relevant for society without high educational demand. Universities must have different sources to finance their budget: •
a basic equipment with assets and funds from government,
•
fees for their students,
•
third-party-funded research,
•
fundraising from industry and private persons,
•
receipts form alumnis and so on.
On the other side one needs an effective system to support the students by virtual study vouchers, monetary credits given by university and financed by government, private persons, alumnis and so on, monetary credits given by banks and guaranteed by government or university. It is important that there is an effective system of scholarships so that all intelligent young people get the chance to attend higher
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education. One goal must be that more students will come from the lower classes. The social component of such a system will be crucial for its acceptance in society.
One has to use the positive motivating, information and coordinating functions of fees to manage the system of higher education in a much more effective and efficient way as today. Simultaneously, this must not be done to the debit of the lower social classes. On the contrary one has to install a system of financing students and of scholarship that brings more qualified people from the lower classes to university.
5. Management mechanisms within the universities 5.1. Controlling systems for universities
One focal point to improve the effectiveness of the German system of higher education refers to the management system of the universities itself. Recently German universities have been steered to a high degree by public ministries and parliaments. They get most of their money from these institutions. Their expenses were determined by the public budget which is decided by parliament. So the influence of the ministries of education and of finance and the parliaments has been high. The mechanisms of management had a high degree of centralization and of bureaucracy.
For several years we notice in several German countries a tendency to increase the autonomy of the universities. More and more this bidget is separated from the public budget and universities get an own ‚global budget‘. Within this budget they can decide on the distribution of the resources without approval by the ministry. But for parliaments, ministries and universities it is clear that the reverse to autonomy must be an increasing responsibility. Therefore the universities need other management tools. Instead of bureaucratic instruments there must be installed modern instruments to control the use of assets and financial funds. In this situation one can learn al lot from the experiences of economic companies. They use output and goal oriented budgeting to coordinate their departments which have a high degree of autonomy. There one has seen that decisions should be made by the units which have the best information. This is the root of the principle of subsidiarity. Figure 6 shows different
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coordinating mechanisms with their characteristics which are relevant for the management of universities (Küpper 2001a, Küpper/Sinz 1998).
Centralise Budgeting d bureaucra inputoutputtic oriented oriented systems hierarchic hierarchic budgeting
Target system key figures
Market elements
goal specificat ion -selection of participatio students n and Organisat assistans ion - profit participation - structural - structural - structural - structural - structural planning planning planning planning planning decentraliza Planning - toption downplanning - external - external - attractivity: audit complianc performan performan audit student e with the ce ce - variance applicants budget - variance analysis third-partyControl - external complianc analysis funded audit e with the - external projects budget audit - external audit - calls - calls - calls - calls - calls - calls - third- third- third- third- third- third-partypartypartypartypartypartyfunded funded funded funded funded funded projects projects projects projects projects projects - allocation Incentive - profit of system performan performan participatio resources ce-based ce-based n allocation allocation of of resources resources - awards - finance, - teaching - finance, cameralisti cameralisti activity load activity benchmark Informati c c and costs - scientific and costs universities on accountan accountan accounting performan accounting system cy cy ce evaluations resources indicators Figure 6: Important characteristics of comprehensive coordination systems
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Today especially output oriented budgeting systems on the basis of different performance measures like the number of students and graduates, doctorates and habilitations, third-party-funds and so on are discussed and installed. Furthermore the distribution of funds on the basis of target agreements become more and more important. In order to get reasons für such forms of budgeting and to control the fulfilment of target agreements, one needs performance measures and key figures. All these mechanisms tend to be more market-oriented as the bureaucratic and inputoriented budgeting mechanisms practiced until now.
5.2. Accounting as an important part of the universitary management system
In order to use such management mechanisms, the universities must install effective information systems. In economy, financial and cost accounting are the central information systems of most companies. Therefore a problem which is discussed intensively in Germany is if the economic systems of book keeping, financial and cost accounting with balance sheet and income statement can be transfered to universities (Küpper 2000). Some governments and people think that universities will work efficiently if they use these economic systems.
The central goal of economic companies is to make profit and to increase their shareholder value. This goal determines the structure of the information system of financial accounting as well as managerial accounting. But profit is not an objective of (state) universities. Therefore, they cannot apply the financial and managerial accounting systems without changing them. Efficiency is part of their system of objectives; but this goal is dominated by their non-profit goals.
Although public universities are non-profit organisations, they have a lot of economic activities. They have to control a large monetary budget which may be financed by government, fees, fund raising and other sources. To manage their expenses they need an accounting system based on a bookkeeping system. As the central goals of universities are non-economic ones, universities should use special financial and cost accounting systems which differ from those systems in the profit sector (Küpper 2000, Küpper 2001b). They need information and accounting systems which are
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adapted to their primary objective. To use traditional accounting systems unchanged could become dangerous for them.
The basis of their financial accounting system has to be a cash flow statement to reveal the flow of money which they get from the government and others. In a public university a balance sheet can particularly describe and classify their assets. As the liabilities of such universities often are not high, they are not in the focus of interest. As long as universities do not offer the results of their acitivities in education and research on a free market and as they do not aim at making a profit, an income statement is useless and could be misleading. Instead it could be useful to show the changes of the assets´ net values in time. Then the financial accounting system of a university may consist of three types of economic information systems (see figure 7): the cash flow statement, the balance sheet and a statement of net value changes of the assets. Such a system is used as a basic instrument to review the university by auditors and by the government.
financial accounting system for universities balance sheet t fixed assets
equity
current assets
loan capital
cash flow statem ent t+1 expenses
grants
statem ent of net value changes of the assets t+1 depreciation ...
ES
CA
balance sheet t+1 fixed assets
change in inventory
equity CA
current assets
ES
.....
loan capital
.....
Fig. 7: Components of a financial accounting system for public universities (CA = changes of the assets; ES = expense surplus)
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To support decision-making universities also need a sort of „cost“ accounting system (Küpper 2002). The main problem in setting up this system is the lack of market based sales revenues as long as most of the revenues are given by government. The problem of allocation of public funds to activities in education, research and services cannot be solved without arbitrariness. Therefore, a performance information system of a university should show the monetary expenses and costs of input on the one side and the non-monetary output in education, research and service processes on the other side (figure 8). Performance indicators can be formed as ratios between output and monetary or non-monetary input measures. As universities undertake different types of activities and pursue different goals in education, research and services, it makes no sense to rate their performance by only one key figure. These performance measures are calculated in a third part of this internal accounting system. periodical performance statement for universities expenses resp. cost accounting
activity accounting
• types of expenses resp. costs • multistage direct cost accounting
• study and teaching • research • service
success performance figure accounting • study and teaching • research • service
Fig. 8: Components of a performance statement for universities
In Germany, the chancellors of the universities make some efforts to classify expenses and costs, revenues and non-monetary measures of universitary output in a similar way to make comparisons between the universities possible (AK Hochschulrechnungswesen 1999, Kronthaler 1999). The most important current expenses and costs are related to the input of material, external services, labour,
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information, fees, capital etc. They have to be complemented by the expenses for investments in buildings, machines, computers and so on. Figure 9 gives a classification of important output measures in education and study, research and service, whereas figure 10 shows some examples of performance indicators of universities.
Academic studies and Research teaching Students promotion of novices Places in higher post-graduate education courses First-year-students Doctorates Undergraduate habilitations students Graduate students ....... Drop out of students ..... Teaching
service scientific libraries studies
Number of courses utilisation of scientific results Course hours scientific publications Tests Patents Tests in undergraduate ..... studies third-party funds from Tests in graduate Industry studies public institutions Graduates
acquisitions users ......
personnel administration attended persons recruitments ......
student administration finance administration
Fig. 9: Classification of universitary output measures
Academic studies and research Promotion of scientific teaching novices Applicants per place at publications per prof. Post-graduate students per university professor resp. per student in first publications per Post-graduate students per semester academic staff graduates Students per professor third-party funds per Number of doctorates per prof. professor Number of tests per third-party funds per ∅length of doctoral studies professor academic staff Graduation rate (based on scientific award per Habilitations per professor number of first-year- academic staff students) Graduates per professor patents per ∅length of habilitation academic staff
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∅duration of studies per degree programme ∅age of graduates
Service Library: Acquisition of books per staff member in library
Fig. 10: Classification and examples of universitary performance measures
The performance indicators sould be recorded for the whole university. In order to judge their values, they have to be compared with other universities to get a benchmark. Therefore, the chancellors of the German scientific universities suggest to publish performance statements. The structure of such a statement is given in figure 11.
universitary performance statement department A subject A ............... prof. A1 ........ sum ...............
............
I. non-monetary performance a) quantifiable performance in education 1. number of trained students 2. applicants for a place at university . 5. absolvents per student 6. duration of studies 7. quality of graduats . . b) quantifiable performance in promotion of the scientific descendants 1. number of doctorates per professor - duration 2. habilitations - per professor - duration . . . c) quantifiable performance in research 1. number of publications 2. portion of third-party-funds of the budget 3. scientific awards . II. monetary „performance“ a) available budget . . available overall budget b) direct costs . . sum of direct costs c) overhead costs
Figure 11: Basic structure of an universitary performance statement
central scientific institutions ZWE 1 ......
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The important decisions of the universities reach a long time. They relate to the investments in assets and personal. Periodical measures cannot show the performance and the success of these long term activities as well as their potential in a sufficient manner. One has to develop and to install strategic accounting systems beside the periodical operative systems. A central task of future research in higher education
is
to
develop
instruments
to
measure
the
intellectual
capital
(Edvinsson/Malone 1997, Roos et al. 1997) which is most important and characteristic for universities.
In Germany there are different activities to introduce new accounting systems in universities. In several countries like Lower-Saxony (Niedersachsen) one tries to apply the economic financial accountig system based on economic principles given by law (HGB). The results show that this system is not appropriate for universities. Therefore a commission of the chancellors of the German universities recommended to develop a special accounting system for universities based on the ideas outlined in this paper. One problem is that the standard software systems have been set up for accounting in profit oriented companies. Therefore it is necessary to adapt these systems to the purposes of universities. There are different projects of SAP at the Technical University of Munich and of the HIS GmbH (Hochschul-InformationsSystem) to develop suitable software systems in order to realize a special university accounting system. These software systems are necessary for bookkeeping, the financial accounting systems and the expense/cost as well as the activity accounting. In a further Bavarian project a datawarehouse system has been developed which will be important to get the data for the periodical performance system (Sinz et. al 2001). There is a good chance to come to an accounting system for universities which will become an important instrument to manage universities in an efficient manner.
6. Conclusions
The reform of the system of higher education in Germany began later as in other countries like the Netherlands. But since several years there is a strong push of industry, politicians and society to improve the effectiveness and the efficiency of German universities. It took a long time to start these processes and it needs a lot of change in mind. The members of the universities, many professors as well as most of
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the students are very reserved against such reforms. But if one gets more insight, you can see that the tendency to change the framework and to install modern management mechanisms increases. New laws in several Länder (states) of the Federal Republic of Germany, the activities of the presidents and the chancellors of the German universities and the development in faculties give reason to the expection that we will have increasing changes in the German system of higher education. I think that many universities and the whole system of management mechanisms will look quite different in some years. Perhaps one will be astonished at the flexibility of a formerly lazy system.
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References:
AK Hochschulrechnungswesen (1999): Arbeitskreis Hochschulrechnungswesen der deutschen Universitätskanzler: Schlußbericht 1999 (www.tumuenchen.de/campus/about/reform/akhsr/data/ endfassung_sS.pdf). Bundesministerium für Bildung und Forschung (2001): Grund- und Strukturdaten 2000/2001, Bonn 2001. Edvinsson, L./Malone M. S. (1997): Intellectual Capital: Realizing Your Company’s True Value By Finding Its Hidden Brainpower, New York 1997. Fandel, G. (1998): Funktionalreform der Hochschulleitung, in: Zeitschrift für Betriebswirtschaft (68), S. 241-257. Grüske , K.-D. (1994): Verteilungseffekte der öffentlichen Hochschulfinanzierung, in: Reinar Lüdeke (Hrsg.): Bildung, Bildungsfinanzierung und Einkommensverteilung II, Schriften des Vereins für Socialpolitik, Neue Folge Band 221/II, Berlin 1994, S. 71ff. Grüske, K.-D. (2002): Wer finanziert wem das Studium? Verteilungswirkungen der Hochschulfinanzierung, in: Dieter Dohmen und Birgitt A. Cleuvers (Hrsg.): Nachfrageorientierte Bildungsfinanzierung. Neue Trends für Kindertagesstätte, Schule und Hochschule. Schriften für Bildungs- und Sozialökonomie, Band 1, Bielefeld 2002. Harnier, L.v., Länge-Soppa, R., Schüller, J., Schneider-Amos, I. (1998): Studienbedingungen und Studiendauern an bayerischen Universitäten. Reformmaßnahmen und deren Wirkungen am Beispiel ausgewählter Fächer, München 1998. Kronthaler, L. (1999): Greifswalder Grundsätze. Weshalb Hochschulen ein modernes Rechnungswesen brauchen, in: Forschung & Lehre 11/1999, S. 583 f. Küpper, H.-U. (1998): Transformation von Universitäten zu wettbewerbsorientierten Forschungs- und Lehrinstitutionen, in: Manfred Becker, Josef Kloock, Reinhart Schmidt und Gerhard Wäscher (Hrsg.): Unternehmen im Wandel und Umbruch, Stuttgart 1998, S. 235-257. Küpper, H.-U. ( 2000): Hochschulrechnung auf der Basis von doppelter Buchführung und HGB?, in: Zeitschrift für betriebswirtschaftliche Forschung (52), S. 348-369. Küpper, H.-U. ( 2001a): Controlling – Konzeption, Aufgaben und Instrumente, 3. Auflage, Stuttgart 2001. Küpper, H.-U. (2001b): Rechnungslegung für Betriebswirtschaftliche Forschung und Praxis, S. 578-592.
Hochschulen,
in:
Küpper, H.-U. (2002): Konzeption einer Perioden-Erfolgsrechnung für Hochschulen, erscheint in: Zeitschrift für Betriebswirtschaft. Küpper, H.-U./Sinz, E. (Hrsg.) (1998): Gestaltungskonzepte für Hochschulen Effizienz, Effektivität, Evolution, Stuttgart 1998. Roos, J./Roos, G./Edvinsson, L./Dragonetti, N. C. (1997): Intellectual Capital, London 1997.
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Schnitzer, K./Isserstedt, W./Middendorff, E. (2000): Die wirtschaftliche und soziale Lage der Studierenden in der Bundesrepublik Deutschland 2000. 16. Sozialerhebung des Deutschen Studentenwerks durchgeführt durch HIS Hochschul-Informations-Systems, Bonn 2001. Sinz, E.J./Böhnlein, M./Ulbrich-vom Ende, A./Plaha, M. (2001): Architekturkonzept eines verteilten Data Warehouse-Systems für das Hochschulwesen, in: Proceedings of Wirtschaftsinformatik 2001. Statistisches Landesamt Baden Württemberg (2001) Bildungswesen, Stuttgart 2001. Wissenschaftsrat (1994): Stellungnahme zu den Berufsakademien in BadenWürttemberg, Drs. 1570/94, Schwerin 1994. Zabeck, J./Zimmermann, M. (Hrsg.) (1995): Anspruch und Wirklichkeit der Berufsakademien Baden-Württemberg. Eine Evaluationsstudie, Weinheim 1995.
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Münchner Betriebswirtschaftliche Beiträge 2000-01 Hans-Peter Burghof / Christian Hofmann: Executives´Compensation of European Banks -Disclosure, Sensitivity and their Impact on Bank Performance, Juni 2000. 2000-02 Gunther Friedl: Sequential Investment and Time to Build, Juli 2000. 2000-03 Hans-Ulrich Küpper: Cash Flow and Asset Based Interest Calculation in Cost Accounting, Juli 2000. 2000-04 Nikolaus
Franke
/
Unternehmensgründungen
Christian -
dank
Lüthje:
oder
trotz
Kovarianzstrukturanalytische
Erklärung
Gründungsverhaltens
der
anhand
Studentische Förderung?
-
studentischen
Persönlichkeitskonstrukte
“Risikopräferenz” und “Unabhängigkeitsstreben” sowie der subjektiven Wahrnehmung der Umfeldbedingungen, Juli 2000. 2000-05 Burkhard Pedell: Sunk Costs, Commitment and Strategy, August 2000. 2000-06 Wolf Frowein: On the Consistency of Mean-Lower Partial Moment Analysis and Expected Utility Maximisation, Oktober 2000. 2000-07 Dietmar Harhoff / Joachim Henkel: Profiting from voluntary information spillovers: How users benefit by freely revealing their innovations, Juli 2000. 2000-08 Knieps Günter / Hans-Ulrich Küpper / Rene Langen: Abschreibungen bei fallenden Wiederbeschaffungspreisen in
stationären und
nicht
stationären Märkten, Dezember 2000. 2001-01 Heinrich Martin Arnold: Can great companies survive technology shocks? – A literature overview, Januar 2001. 2001-02 Zsolt Berényi: Accounting for illiquidity and non-normality of returns in the performance assessment, Juli 2001. 2001-03 Michael Dobler: Auditing Risk Management - A Critical Analysis of a German Particularity, Juli 2001. 2001-04 Gunther Friedl / Roberet Ott: Anreizkompatible Gestaltung von Entgeltsystemen für Krankenhäuser, April 2001.
27
2001-05 Hans-Ulrich
Küpper:
Struktur
und
Teilsystem
der
Unternehmensrechnung, August 2001. 2001-06 Claudia Küpper: Service Innovation – A review of the state of the art, September 2001. 2001-07 Christian Hofmann: Anreizsysteme, September 2001. 2001-08 Yvette Hofmann: Sozialer Nutzen, Soziale Kosten, September 2001. 2001-09 Gunther Friedl / Burkhard Pedell: Anlagencontrolling, September 2001. 2001-10 Hannes
Wagner:
Der
Wert
interner
Kapitalmärkte
–
empirische
Überprüfung theoretischer Ansätze, Oktober 2001. 2001-11 Nikolaus Franke: How Communities Support Innovative Activities, Oktober 2001. 2001-12 Joachim Henkel: The Value of Weak Commitment, November 2001. 2001-13 Gunther Friedl / Burkhard Pedell: Integriertes Controlling mit SAPSoftware, November 2001. 2001-14 Heinrich Martin Arnold: The recent history of the machine tool industry and the effects of technological change, November 2001. 2002-01 Jörg Wiese: Die Überprüfbarkeit individualistischer Risikozuschläge bei der Unternehmensbewertung, März 2002. 2002-02 Gunther Friedl: Growth Options, Organizational Slack, and Managerial Investment Incentives, April 2002. 2002-03 Hans-Ulrich Küpper: Internet Based Information Systems in the Non-Profit Sector, September 2002. 2002-04 Hans-Ulrich Küpper: Management Mechanisms and Financing of Higher Education in Germany, September 2002
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Prof. Dr. Hans-Ulrich Küpper Ludwig-Maximilians-Universität München Institut für Produktionswirtschaft und Controlling Ludwigstraße 28/RG D-80539 München kü
[email protected]
http://www.bwl.uni-muenchen.de
