Chapter 2


John McClatchey
Portsmouth Polytechnic


The Enterprise in Higher Education (EHE) Initiative is only one of a number of influential funding opportunities in which Higher Education Institutions (HEIs) have been involved in recent years. The involvement of outside stakeholders, such as the Manpower Services Commission in the mid-1980s, can result in a transformation of the goals of an organisation (Open University, 1990).

The actual goals which an organisation is pursuing should not be confused with its official goals. Perrow (1961) argues that official goals are purposely vague and general, and he prefers the term 'operative goals'. He further argues that there will therefore be unofficial operative goals tied to group interests and that they may support or subvert the official goals. In commenting on official goals Mintzberg (1983, p.246-7) goes further stating that, "... in general official statements of organisational purpose must be treated as fiction produced by an organisation to account for, explain or rationalise its existence to particular audiences." A recent review of Polytechnic mission statements (Earwalker, 1991) would tend to confirm this.

The EHE initiative requires "... the commitment of the whole institution ...' and a "... commitment to sustain the programme beyond the period of pump-priming ..." (Training Agency, 1989). Institutions will therefore have to examine their strategic management because the adoption of EHE will require changes in the activities of the institution. Bowman and Asch (1987, p.4) note that, "strategic management is the process of making and implementing strategic decisions ... (it) is about the process of strategic change."

Formation of Strategy

Hickson et al. (1986) noted that strategic decisions in public-sector organisations are dominated by 'sporadic processes' with many delays and impediments, partly arising from the multiple and conflicting objectives of the various stakeholders. Langley (1988) noted that in the public sector strategic planning was commonly used to impress or influence outsiders and the most important role of planning was often 'group therapy' which involves communication of strategic issues and participation in them at all levels. This latter motive has obvious importance for EHE projects.

Unfortunately although a carefully planned progress through a series of planning processes can be proposed, strategy is often not as deliberate as is imagined. Mintzberg and Waters (1989) suggest that strategy is emergent and that there are a number of different types of strategy (Table 2.1).

Table 2.1 Types of strategy

Strategy Major Feature

Umbrella Strategic boundaries defined
Process Control of process
Imposed Environment dictates patterns
Unconnected Strategies originate in enclaves
Planned Precise intentions articulated
Entrepreneurial Vision of single leader
Ideological Shared beliefs

In none of Mintzberg and Waters's categories will strategies be completely deliberate and in the case of the unconnected (and sometimes the imposed) strategies, much if not all of the strategy is emergent. The realised strategy has elements of both, the balance depending on the particular situation. As EHE projects are intended to become embedded in the work of the institution, it has to be recognised that a shift is needed from the unconnected strategies (which have previously characterised larger institutions) to more deliberate strategies.

Organisational Structures

Mintzberg (1979) suggests that there are six basic parts to an organisation. These are: an operating core where the work gets done, a strategic apex of top management, a middle line of managers standing between the apex and core, a technostructure consisting of staff who design control systems and a support staff ranging from cafeteria staff to the public relations department. The sixth part is the ideology which is the tradition of beliefs or culture of the organisation. He argues that these six basic parts of the organisation, their coordinating mechanisms and the ways in which the organisation is decentralised, fit together to give six basic configurations. He illustrates this by considering the organisation to be pulled in six different directions (Figure 2.1).

Of the six types, three are of interest with regard to HEIs. The machine bureaucracy is the classical model of a mass-production organisation. It is designed to enable top managers to maintain centralised control and is the model which was assumed in some of the neo-Taylorist reforms of the public sector in the 1980s (Pollitt, 1990). Unfortunately it is inappropriate as a model for HEIs because Mintzberg (1979) suggests that the professional bureaucracy is the configuration which develops in HEIs as the pull to professionalise dominates. The structure is highly decentralised horizontally and the organisation surrenders much of its power to the professionals and to the associations and institutions which train them. Mintzberg (1979) argues that a professional bureaucracy is called for whenever an organisation finds itself in an environment that is stable yet complex.

There is some evidence, certainly in polytechnics, that faculties are being given the autonomy of separate divisions and hence the divisionalised form perhaps has some relevance to HEIs. Given that this may be happening the question that needs to be asked is whether both the organisation and the faculties appreciate that these divisions are still professional bureaucracies.

Configurations of Strategy and Structure

Much of the work on actual strategies relates to the market environment but some of that work has relevance to HEIs. It is also worth noting that recent government policies and statements have implied that there are benefits in terms of efficiency and effectiveness in exposing public-sector activities to market pressures (Metcalfe and Richards, 1990). With market pressures comes the need to pay attention to the five forces which Porter (1980) suggests determine the competitive state of a sector.

Strategy and structure relationships have been examined by Miles and Snow (1978) who postulated four configurations. Two of their types are 'analysers' and 'reactors'. The former try to incorporate the benefits of both the defender (stability seeker) and the prospector (opportunity seeker) and they have the problem of how to differentiate the structure and processes to accommodate both stable and dynamic areas of operation. This is often achieved by some sort of matrix structure. It may well be that HEIs will have to consider moving to such a position given the pressure to expand the dynamic areas of their work while increasing the efficiency of the more stable areas.

Unfortunately it may be that given the range of work now undertaken in HEIs, they are perhaps moving to Miles and Snow's (1978) last configuration, that of reactor. The reactor's adjustment to environment is inconsistent and unstable and is a residual strategy arising through improper pursuit of one of the other three strategies. It can arise as a result of poor articulation of strategy by top management, an absence of fit between strategy and structure and/or attempts to maintain the current strategy-structure relationship despite overwhelming changes in the environmental conditions (Open University, 1990).

The latter point is important because, as Johnson (1988) notes, successful organisations are good at managing change, and this requires the challenging and discrediting of what he terms the 'dominant paradigm'. Too often an attempt is made to find an incremental strategy developed within the dominant paradigm leading to 'strategic drift' and culminating in the need for the turmoil, expense and confusion of a revolutionary period.

Implementing Strategy

In attempting to embed EHE into the work of the institution after the pump-priming has ended, the organisation is dealing with a strategic change. Owen (1982) suggests that organisations typically encounter problems when trying to implement strategies including where:
  1. the implementation of chosen strategies cuts across organisation boundaries;
  2. the information for monitoring implementation is inadequate;
  3. the organisation resists change.
All of these are likely to arise in the case of EHE projects and the difficulties of implementation will have to be addressed. This will require a proper process of strategic planning, a point emphasised by Porter (1987) who also noted that strategy cannot be separated from implementation. Kotter and Schlesinger (1979) suggest that in choosing strategies for only a limited number of people are affected and it is intended to overcome (rather than minimise) resistance. They note that slow changes are necessary if the change is not clearly planned, if it affects many people and if it is intended to minimise resistance. The latter is the more likely scenario for embedding EHE.

Attempting to overcome resistance requires authority and power to control staff. However, control can really only operate effectively by mutual consent, particularly in HEIs, where small single-minded groups can have proportion to their size. Overcoming resistance also assumes a traditional command-control framework yet, "... in universities and organisations that rely on large professional-based personnel, the management of the change cannot be predicated on the traditional command-control framework which was largely derived from a manufacturing environment." (Open University, 1990, pl48). If Kotter and Schlesinger (1979) are correct, it is unlikely that any changes in HEIs can be fast if they are going to be successful.

Successful implementation of strategic changed on 'soft', people-centered approaches such as organisational development (OD) rather than 'hard' approaches Pugh (1978) suggests that managers should initiate change via informal discussion encouraging objections and the being prepared to change themselves. The importance of communication is also stressed by Alexander (1985) who noted that top management should communicate with all employees.

Communication, however, has to be two-way and Pugh's (1978) rule about being prepared to change oneself is crucial. It is also important that this communication does not simply lead to horse-trading rather than rational analysis. An OD approach therefore normally requires a consultant or facilitator who can be from within the organisation but who must be from outside the social system to be changed. Such facilitators enable the objections and concerns of staff to be fully aired and assessed without the facilitator having 'ownership' of the problem.

There are some general rules of thumb for successful organisational development (Open University, 1986) these being to get participation, to obtain resources, and to start small but real.

The first emphasises the importance of communication and the second is most likely if there is a suitable 'champion' to provide those resources. The third rule emphasises that nothing succeeds like success and can be illustrated by the work of Lord Rayner whose Civil Service reforms started by setting in train numerous small-scale initiatives which aimed to produce real results in a short time (Metcalfe and Richards, 1990). Of course he had the advantage of a strong champion in the Prime Minister but it is also worth noting that although brought in from outside the Civil Service, he had previously worked in the Civil Service at Second Permanent Secretary level. Lord Rayner was therefore aware of the strong departmental structure in Whitehall and he might have been much less successful without that experience (Metcalfe and Richards, 1990). This could suggest that there is some danger in bringing in a manager from outside the organisational culture to affect change. This would not apply to an OD practitioner who is brought in to facilitate nor would it apply to a manager who had some real experience of the culture.

Owen's (1982) second common problem was the lack of information available for monitoring implementation. One of the difficulties here is that even if information has been collected it may not be made available. Wilensky (1967) argues that information is not neutral and has implications for power, status and interests. Even if not deliberately concealed, information may not be available in an appropriate form. Interviews with various project managers and senior managers in HEIs (McClatchey, 1990) have indicated that suitable management-accounting information is generally not available because financial systems tend to be set up for reporting rather than for proactive management purposes.

The other problem noted by Owen was that implementation cut across departmental boundaries. As each department or unit guards its own mission standards and skills, these objectives can conflict with implementation, especially if strategy is imposed from outside. Overcoming such problems is not easy and is likely to require the use of one or more of the liaison devices suggested by Mintzberg (l979). Liaison devices are no panacea since they are only effective if set within an appropriate context.

Owen's comments about cross-boundary issues, the limitations of available information and organisational resistance are echoed in the work of Alexander (1985). He noted that the four most frequent strategy implementation problems were:

  1. implementation took longer than estimated;
  2. major problems not identified beforehand surfaced during the course of implementation;
  3. coordination of implementation was not effective enough;
  4. competing activities and crises distracted attention from implementation.
Alexander's fifth most frequent problem, that staff capabilities were insufficient, should hopefully not be a problem in HEIs. But the other four problems are clearly real ones in higher education.


What then are the implications for EHE projects in higher education with its multiple and often conflicting objectives? An appropriate strategy-formulation mechanism which involves all participants must be used, involvement being especially important in a professional bureaucracy. Without it the problems of conflicting objectives are likely to occur and there is the danger that not only will valuable and creative ideas be missed (Lupton, 1971) but strategies will be developed to fit the dominant paradigm (Johnson, 1988). Thus there is the danger of strategy being developed to maximise chances of approval rather than optimising the organisation's operation (McLellan and Kelly, 1980).

Once the resources have been acquired however, the implementation of the strategic change entailed by EHE and similar work has to be put into effect. The importance of senior management champions is crucial because they can deliver the resources and support need for strategic change.

It has been argued that the strategies which can be adopted cannot be divorced from the institution's structure and that the professional bureaucracy of HEIs is not conducive to successful implementation of change in a more dynamic environment. Thus structural changes may be necessary, at least in the coordinating mechanisms for cross-boundary changes. Perhaps as implied by Porter (1987), although attention is being given to strategic planning (meeting the objectives of revenue generation held by senior management), not enough attention is being given to the implementation of the strategic changes. The importance of information for monitoring change should not be forgotten and it is crucial to pay attention to the management information systems as part the strategic change.

Finally, it is worth remembering that strategic change is an organisation-development problem which really requires the involvement of an outside OD practitioner. Since EHE provides resources some of these could be used for that purpose. Cross-boundary issues will almost certainly require the adjustment of organisational structure and the use of liaison devices. At any level, including that of the department, it is worth bearing in mind the rules of thumb for OD especially the third, 'start small but start real'.


Alexander, L. D. (1985) Successfully implementing strategic decisions. Long Range Planning 18, 91-92.

Bowman, C. and Asch, D. (1987) Strategic management. Macmillan, Basingstoke.

Earwalker, J. (1991) Boo to the barbarians. Times Higher Education Supplement No 960, 29 March.

Hickson, D. J., Butler, R. J., Cray, D., Mallory, G. R. and Wilson, D. C. (1986) Top decisions: strategic decision-making in organisations. Blackwell, Oxford.

Johnson, G. (1988) Rethinking incrementalism. Strategic Management Journal 9, 75-91.

Kotter, J. P. and Schlesinger, L. A. (1979) Choosing strategies for change. Harvard Business Review 57, March/April, 106-114.

Langley, A. (1988) The roles of formal strategic planning Long Range Planning 21, 40-50.

Lupton, T. (1971) Organisational change: 'top-down' or 'bottom-up' management. Personnel Review Autumn, 22-28.

McClatchey, J. (1990) An investigation of the process of bidding for and management of self-financing projects initially funded by external pump-priming initiatives. MBA Dissertation, Open University.

McLellan, R. and Kelly, G. (1980) Business policy formulation: understanding the process. Journal of General Management Autumn, 28-47.

Metcalfe, L. and Richards, S. (1990) Improving public Management. Sage, London.

Miles, R. E. and Snow, C. C. (1978) Organisational strategy: structure and process. McGraw Hill, New York.

Mintzberg, H. (1979) The structuring of organisations. Prentice-Hall, Englewood Cliffs.

Mlntzberg, H. (1983) Power in and around organisations. Prentice-Hall, Englewood Cliffs.

Mintzberg, H. and Waters, J. A. (1989) Of strategies deliberate and emergent, in Asch, D. and Bowman, C. (eds) Readings in strategic management. Open University, Milton Keynes.

Open University (1986) P679 Planning and managing change. Open University, Milton Keynes.

Open University (1990) B881 Strategic management. Open University, Milton Keynes.

Owen, A. A. (1982) How to implement strategy. Management Today July, 51-53.

Perrow, C. (1961) The analysis of goals in complex organisations. American Sociological review 26, 854-856.

Pollitt, C. J. (1990) Managerialism and the public services. Blackwell, Oxford.

Porter, M. E. (1980) Competitive strategy. The Free Press, New York.

Porter M. E. (1987) The state of strategic thinking The Economist 23 May, 21-28.

Pugh, D. S. (1978) Understanding and managing organisational change. London Business School Journal 3, 29-34.

Training Agency (1989) Enterprise in Higher Education: Key features of the Enterprise in Higher Education proposals. HMSO, London.

  Figure 2.1 The six pulls on the organisation (Mintzberg, 1979)

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