# **REFORMS, ORGANIZATIONAL CHANGE** *and* **PERFORMANCE** *in* **HIGHER EDUCATION**

*A Comparative Account from the Nordic Countries*

Edited by Rómulo Pinheiro, Lars Geschwind, Hanne Foss Hansen, Kirsi Pulkkinen

# Reforms, Organizational Change and Performance in Higher Education

Rómulo Pinheiro • Lars Geschwind Hanne Foss Hansen • Kirsi Pulkkinen Editors

# Reforms, Organizational Change and Performance in Higher Education

A Comparative Account from the Nordic Countries

*Editors* Rómulo Pinheiro Department of Political Science & Management University of Agder Kristiansand, Norway

Hanne Foss Hansen Department of Political Science University of Copenhagen Copenhagen, Denmark

Lars Geschwind School of Industrial Engineering and Management KTH Royal Institute of Technology Stockholm, Sweden

Kirsi Pulkkinen Faculty of Social Sciences University of Lapland Rovaniemi, Finland

#### ISBN 978-3-030-11737-5 ISBN 978-3-030-11738-2 (eBook) https://doi.org/10.1007/978-3-030-11738-2

Library of Congress Control Number:<PHONE_NUMBER>

© The Editor(s) (if applicable) and The Author(s) 2019 This book is an open access publication

**Open Access** This book is licensed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence and indicate if changes were made.

The images or other third party material in this book are included in the book's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the book's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.

The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Cover illustration: Björn Forenius / Getty Images

This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG.

The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

*For our dear colleague Helge Hernes (18.03.1946–06.09.2018), in memoriam*

# Acknowledgement

The data presented in the current volume and individual chapters emanate from a comparative study funded by the Norwegian Research Council under its FINNUT flagship program, a long-term program for research and innovation in the educational sector program. The project number was 237782, and the project was titled 'Does it matter? Assessing the performance effects of changes in leadership and management structures in Nordic Higher Education'.

# Contents

Hernes, Jussi Kivistö, Jonas Krog Lind, Anu Lyytinen, Elias Pekkola, Kirsi Pulkkinen, Bjørn Stensaker, and Johan Söderlind

ix

# **Part II Cross Cutting Themes** 109 **4 National Performance-Based Research Funding Systems: Constructing Local Perceptions of Research?** 111 Johan Söderlind, Laila Nordstrand Berg, Jonas Krog Lind, and Kirsi Pulkkinen **5 External Research Funding and Authority Relations** 145 Jonas Krog Lind, Helge Hernes, Kirsi Pulkkinen, and Johan Söderlind **6 The Changing Roles of Academic Leaders: Decision-Making, Power, and Performance** 181 Lars Geschwind, Timo Aarrevaara, Laila Nordstrand Berg, and Jonas Krog Lind

# **8 Evaluation Practices and Impact: Overload?** 235 Hanne Foss Hansen, Timo Aarrevaara, Lars Geschwind, and Bjørn Stensaker

# **Part III Taking Stock and Moving Forward** 267

**Index** 321

# Notes on Contributors

**Timo Aarrevaara** is Professor of Public Management at the University of Lapland and has professional experience in public administration as well as in research and teaching. Aarrevaara has participated in and conducted several evaluating and auditing projects, and has acted as the principal investigator for a number of projects in higher education. Aarrevaara has strong international higher education research links and is a co-editor of Springer's 'The Changing Academy' Series and author and co-author of several papers and book chapters.

**Laila Nordstrand Berg** has a PhD in public policy and administration from the University of Bergen, Norway. She is working as an associate professor at Western Norway University of Applied Sciences. She is also an associate member of the Governance and Leadership in the Public Sector (GOLEP) research group at the University of Agder in Norway. She is doing research on management of universities and hospitals from public and private sector in a comparative perspective. Laila's interests are related to the intersection between public policy and administration, organisational studies, reforms, management and the influence of the market on management of the institutions from private and public sectors.

**Tatiana Fumasoli** is Associate Professor of Higher Education Studies at the University College London (UCL) Institute of Education (London, UK). She holds a PhD from the University of Lugano (Switzerland, 2011) with a thesis on university strategic management. She was before at ARENA Centre for European Studies and at the Department of Education at the University of Oslo, where she coordinated an international project comparing university managing practices across the continent. Her research interests lie at the intersection of management studies, organisation theory and sociology of professions and expertise. She has published with *Higher Education, Higher Education Policy, Minerva* and *Studies in Higher Education*, amongst others. Tatiana is co-editor of *Higher Education Quarterly* and is a member of the editorial board of several scientific journals on higher education studies.

**Lars Geschwind** is Professor of Engineering Education Policy and Management and coordinator of the research group HEOS (Higher Education Organization Studies at KTH Royal Institute of Technology, Sweden). His main research interests are higher education policy, institutional governance, academic leadership and management and academic work. He is involved in a number of projects focusing on change processes in higher education institutions, including, for example, governance and steering, quality assurance, academic careers and partnership with industry. Most studies include a comparative component and a historical perspective. He has published various scientific books, peer-reviewed journal articles and chapters in anthologies. Lars has professional experience from working on higher education and research from government agencies, private institutions and international consultancy. He has also worked as a researcher and senior lecturer at three different Swedish universities before joining KTH. Lars holds a PhD degree in history, a master of arts degree and a teacher training certificate (upper secondary school), all from Uppsala University.

**Hanne Foss Hansen** is Professor of Public Administration and Organisation at the Department of Political Science, the University of Copenhagen. Her main interests are public organisation and management, public sector reform, evaluation, evidence-based policy and practice, and higher education and research policy. Her recent publications include articles in *American Journal of Evaluation*, Evaluation, *European Journal of Higher Education*, *Science and Public Policy* and *Scandinavian Journal of Public Administration* as well as contributions to edited volumes published at Sage, Springer, Edward Elgar, Palgrave and Routledge.

**Helge Hernes** (1946–2018) was Emeritus Associate Professor of Public Administration at the University of Agder, Norway. Hernes holds a PhD from the Norwegian School of Economics in Bergen. He taught organisation theory and organisation behaviour, specialising in organisational bottom-up processes. Hernes has done research in the health and education systems. His research has been published in national book chapters and in international journals, for example, *International Public Management Journal*.

**Jussi Kivistö** is Professor at the Higher Education Group, Tampere University, Finland. Kivistö has over ten years of experience in teaching and coordination in higher education management programmes at the master's and PhD levels. He has served as consultant for the World Bank and acted as Principal Investigator/researcher in several national and international research and development projects. Kivistö is also a frequent keynote speaker or invited expert in events and projects related to Finnish higher education policy. Kivistö has authored around 75 publications, mainly in the field of higher education management and policy.

**Jonas Krog Lind** is a PhD student at the Department of Political Science, University of Copenhagen. His research interests cover science and university governance broadly and research funding, management and evaluation particularly. He has a professional background in science funding and policy from the Danish Agency for Science, Technology and Innovation.

**Anu Lyytinen** holds a PhD in administrative sciences and is working as a university lecturer (acting) at the Higher Education Group, Tampere University, Finland. She has several years' experience as a researcher and teacher in the field of higher education studies, higher education administration and management. Her main research interests include higher education institutions-society/stakeholder relationship and changes therein.

**Elias Pekkola** is Acting Professor of Administrative Science at the Faculty of Management, University of Tampere, Finland. Pekkola's publications include several articles and books on academic work, academic profession, careers and HR policy. Pekkola serves also as an academic coordinator of 'Nordic Master Programme in Innovative Governance and Public Management'. He has acted in various expert roles in Finland and in international projects on academic work, careers and higher education policy.

**Rómulo Pinheiro** is Professor of Public Policy and Administration at the University of Agder, Norway, where he co-heads the research group on public governance and leadership (GOLEP). His research interests are located at the intersection of public policy and administration, organisational theory, economic geography, innovation and higher education studies. Pinheiro has edited and co-edited a variety of books for major publishers like Springer, Palgrave and Emerald. His work has been published in scientific journals such as *Public Administration Review*, *Science and Public Policy*, *Higher Education*, *Studies in Higher Education*, *European Journal of Higher Education*, *Cambridge Journal of Regions, Economy and Society*, *Scandinavian Journal of Public Administration*, *Tertiary Education and Management*, and so on.

**Kirsi Pulkkinen** is a researcher at the Faculty of Social Sciences at the University of Lapland, Finland. She is finalising her doctoral thesis on the interaction between researchers and their societal counterparts, in particular the policy community. Kirsi is involved in a number of international projects studying the impact, public engagement and performance of research communities, and she is part of a consortium evaluating the research institutes and funding reform of Finland. Her research interests include the societal impact of research and the dynamics of knowledge production and utilisation between the scientific communities and their societal partners. Kirsi is particularly interested in the intricacies of the science-policy-practitioner interface and knowledge advocacy of universities. She has previously worked in managerial positions as an expert and advisor on higher education cooperation and civil society collaboration at the Ministry for Foreign Affairs of Finland, as well as advisor on co-creative methods and competitive research funding at the University of Helsinki. In addition to her scientific work, Kirsi works as a co-creation consultant and trains scientists on the methods of stakeholder engagement and collaboration.

**Johan Söderlind** is a PhD student at the School of Industrial Engineering and Management, KTH Royal Institute of Technology in Sweden. His research is focused on leadership and management of higher education and research, with a particular interest in the use of performance indicators. He holds an MSc in Political Science from Uppsala University. He has previous professional experience as a research-funding administrator and research assistant.

**Bjørn Stensaker** is Professor at the Department of Education, University of Oslo, Norway. He is also a Research Professor at the Nordic Institute for Studies in Innovation, Research, and Education (NIFU) in Oslo. Stensaker holds a PhD from the University of Twente, the Netherlands, and has a special research interest in reform, governance and organisational change in higher education. His work has been published widely in a range of international journals and books. Stensaker is the President of EAIR, the European Higher Education Society.

# List of Figures

# List of Tables

# Setting the Stage

# Does It Really Matter? Assessing the Performance Effects of Changes in Leadership and Management Structures in Nordic Higher Education

*Kirsi Pulkkinen, Timo Aarrevaara, Laila Nordstrand Berg, Lars Geschwind, Hanne Foss Hansen, Helge Hernes, Jussi Kivistö, Jonas Krog Lind, Anu Lyytinen, Elias Pekkola, Rómulo Pinheiro, Bjørn Stensaker, and Johan Söderlind*

Helge Hernes passed away in the Fall of 2018.

L. N. Berg Department of Social Science, Western Norway University of Applied Sciences, Sogndal, Norway e-mail<EMAIL_ADDRESS>
L. Geschwind • J. Söderlind

K. Pulkkinen (\*) • T. Aarrevaara

Faculty of Social Sciences, University of Lapland, Rovaniemi, Finland e-mail<EMAIL_ADDRESS><EMAIL_ADDRESS>
School of Industrial Engineering and Management, KTH Royal Institute of Technology, Stockholm, Sweden e-mail<EMAIL_ADDRESS><EMAIL_ADDRESS>
# Introduction: Rationalisation and Converging Higher Education Policies

As a sector of the economy, higher education has been the subject of substantial change in the last couple of decades, not least due to the exponential growth in the number of students and institutions, often seen as pertaining to the phenomena of massification (Trow and Burrage 2010). All over the world, organisational fields and their specific institutions, such as universities, have similarities in organisational design and activities. In many countries, universities have experienced a shift towards 'academic capitalism' (Slaughter and Leslie 1999) and are operating as 'entrepreneurial universities' (Clark 1998; Etzkowitz et al. 2008). Rationalisation of the universities as organisational actors has been done via the introduction of a more formal structure in terms of a stronger emphasis on quality assurance, evaluation, accountability measures and incentive systems. These can be considered a transnational process linked to the New Public Management (NPM) type of governance reforms (Ramirez and Christensen 2013; Seeber et al. 2015).

The social mechanisms of spreading ideas of rationalisation can be highlighted through the perspective of institutional isomorphism (DiMaggio and Powell 1983). Literature on isomorphism concentrates on the increasing similarity of organisational and institutional structures and

H. Hernes • R. Pinheiro Department of Political Science & Management, University of Agder, Kristiansand, Norway e-mail<EMAIL_ADDRESS>
J. Kivistö • A. Lyytinen • E. Pekkola

B. Stensaker

H. F. Hansen • J. K. Lind

Department of Political Science, University of Copenhagen, Copenhagen, Denmark e-mail<EMAIL_ADDRESS><EMAIL_ADDRESS>
Faculty of Management and Business, Tampere University, Tampere, Finland e-mail<EMAIL_ADDRESS><EMAIL_ADDRESS><EMAIL_ADDRESS>
Department of Education, University of Oslo, Oslo, Norway e-mail<EMAIL_ADDRESS>
cultures. Studies on policy convergence instead focus on changes in national policy characteristics. Policy convergence, that is, the development of similar or identical policies across countries over time (Knill 2005), seems to be particularly evident in Nordic countries. They show similar types of policy development in many significant areas of higher education policy, particularly those related to governance.

One of the most important reasons behind policy convergence is international policy promotion, where an actor with expertise in a policy field promotes certain policies. International (or supranational) organisations specialising in certain policy fields are the main actors for inducing the convergence of policies. This happens when they actively promote certain policies and define objectives and standards, as well as arguments, to support their case in an international setting. Countries diverging from promoted policy models may feel pressure to comply with the policies (Holzinger and Knill 2005; Knill 2005).

There are two overarching international political processes relating to higher education in Europe which presumably have a significant impact on the policy convergence: the higher education 'Modernisation Agenda' (European Commission 2006, 2011), promoted under the auspices of the EU institutions (European Commission, in particular), and the intergovernmental Bologna process (Moisio 2014). Many of the NPM ideals implemented in Nordic universities, such as promoting the accountability and autonomy of higher education institutions and improving the governance, funding, quality and relevance of higher education, are directly aligned with the Commission's Modernisation Agenda. Interestingly, the Modernisation Agenda presents the American higher education system and universities in particular as one of the important points of comparison in developing European higher education (Slaughter and Cantwell 2012; Slaughter and Taylor 2016).

Similarly, the Bologna process seems to increase policy convergence at the European level, even though research evidence for this is not yet entirely clear (Witte 2008). However, Voegtle et al. (2011) found that higher education policies of Bologna participants converge more strongly and that the Bologna process has made a crucial difference in increasing the similarity of higher education policies. Particularly in the area of quality assurance, the majority of Bologna signatories implemented most of the measures. They also included all the required actors into their quality assurance measures according to Bologna standards by 2008 (Voegtle et al. 2011).

Furthermore, international/intergovernmental organisations such as the Organisation for Economic Co-operation and Development (OECD), the World Bank and the United Nations Educational, Scientific and Cultural Organisation (UNESCO) are highly influential actors in higher education policy convergence (e.g. see Shahjahan and Madden 2015). At the European and Nordic level, the OECD has the most notably high level of impact on policy convergence. Nation states, including Nordic countries, often rely on the OECD to provide them with the latest data on trends, current issues and policy options. The OECD uses conferences, trend and review reports and the mediation of policy language to influence the thinking of national-level policymakers within and outside of its member countries (Shahjahan and Madden 2015). For instance, the OECD's thematic reviews can provide strong legitimisation or justification to national governments for initiating policy reforms, as has happened in Finland (Kallo 2009).

In addition to the influence of international organisations, crossnational policy convergence might simply be the result of similar but independent responses caused by the countries reacting to the same types of policy problems (Knill 2005; Bennett 1991). At the same time, convergence in policies is more likely in countries that are characterised by high institutional similarity. Policies tend to be implemented insofar as they fit with existing cultures, socio-economic structures and institutional arrangements. In their search for relevant policy models, states are expected to look to the experiences of those countries with which they share an especially close set of cultural similarities and ties (Knill 2005).

However, although policy convergence is clearly observable across the Nordic countries, it is important to note that similar policies are introduced at different points in time and with important variations in the details. For instance, all the Nordic countries have introduced performancebased funding systems linked to the distribution of resources for basic research. Yet, performance is measured using different indicators and redistribution potentials. The effects are also somewhat different. There seems to be more convergence in policy ideas and policy rhetoric than in actual policy implementation. Other examples of these dynamics are found in relation to the overall governance and management structures, as well as to the national quality assurance systems linked to education.

Reforms inspired by the NPM have had a profound effect on the internal structures and governance arrangements of public higher education institutions in the Nordic countries. The impact has been further strengthened by parallel calls for increasing accountability and efficiency (Pinheiro et al. 2014). Yet, few studies to date have systematically and comparatively investigated what types of effects the so-called modernisation efforts have had on teaching and research performance in publicly run and funded universities. This book responds to this gap in knowledge and brings forth new data and comparative analysis of universities in the Nordic countries.

The environmental conditions under which Nordic higher education institutions operate have changed dramatically in the last two decades. Policy efforts aimed at modernising the sector have paid considerable attention to the way in which public universities operate. A strong focus has been given to managerially inspired aspects, such as efficiency, effectiveness and accountability (de Boer and Enders 2017). In addition to managing their internal operations in more cost-efficient manners, public universities are increasingly expected to respond to the needs of various, rather different, external stakeholder groups. In light of the social contract that exists between the universities and society that, in essence, funds them, interacting with the surrounding society has become a task to be tackled actively (Fumasoli et al. 2014; de Jong et al. 2016). One of the many mechanisms being used to achieve these goals relies on enhancing the rationalisation of internal structures and activities by promoting professional management. As a result, most Nordic universities have developed extended administrative structures, ranging from central to unit levels. These structures have been designed to be capable of strategically supporting the primary activities of universities, that is, teaching and research (Amaral et al. 2003). Some have introduced changes in the nomination of formal leaders, that is, they are appointed rather than elected.

Reform efforts are both costly and demanding for the personnel. Therefore, it is necessary to monitor the extent to which they generate the expected results. Consideration should be given to the cost-efficient management of the universities as well as to the situations of the personnel whose task is to perform their duties according to the academic quality criteria in the midst of extensive reforms. As a key sector of the economy, it is necessary to take stock of the ways in which the higher education sector has changed performance-wise as a result of government-led and/or initiated reform efforts.

This is, in many ways, the case with Nordic countries, which are characterised by a welfare state ideology and development of the public sector within this framework. Moreover, they are relatively similar in terms of population size and geographical proximity and share the same type of political systems and political values. In terms of policy challenges, all Nordic countries have to deal with the financial, social and political sustainability of the Nordic welfare model which, in turn, as has been mentioned before, has triggered government-led reform efforts under the label of NPM, particularly in the higher education sector. In all countries, universities are expected to play an increasingly important role in local and national economic development and to spur innovation. Such expectations have further intensified government-led efforts to modernise the higher education sector in all Nordic countries but have also led to calls from the higher education sector to balance governmental funding and leeway regarding, for example, autonomy to better match with the growing demands for more diverse activities.

Before moving forward, we provide a brief note on the Nordic region, which is the geographical focus of this book. The Nordic region is situated in Northern Europe, and the Nordic countries are generally considered to include Denmark, Finland, Iceland, Norway and Sweden, including their associated territories (Greenland, the Faroe Islands and the Åland Islands) (Fig. 1.1). The region shares a strong cultural history and is known for its commitment to social-democratic values, equal opportunity and a generous but financially sustainable welfare state model (Hilson 2008). The Nordic region ranks rather high internationally across a multiplicity of comparative dimensions, ranging from innovation to trust in government to educational quality to quality of life. One of its great successes has been its ability to combine a strong safety net for its citizens, together with the adoption of market-based mechanisms (open economy) aimed at increasing its global competitiveness. When compared to other countries, and as a whole, the Nordics were able to withstand the pressures emanating from the 2008 financial crisis, despite being affected differently as a result of their economic profile and vulnerability to global export markets. That being said, as is the case elsewhere, the region faces a series of challenges, including but not limited to an ageing population, an over-reliance on particular industries (economic specialisation) and the need to reform the pension system (Norden 2014).

The next section provides information on the research project that provided the framework for the current volume.

**Fig. 1.1** The Nordic countries as the geographical focus of the book (excluding Iceland). Source: Mapswire.com. This work is licensed under a Creative Commons Attribution 4.0 International License

# The FINNUT-PERFACAD Study

#### *Aim and Research Problem*

This volume reports on the results emanating from a three-year (fall 2014–summer 2017) comparative, international research project entitled "Does It Really Matter? Assessing the Performance Effects of Changes in Leadership and Management Structures in Nordic Higher Education", funded by the Norwegian Research Council in the context of its FINNUT programme (Research and Innovation in the Educational Sector). The study's focus was on the relationship between changes in formal leadership structures and performance shifts and was substantiated around the following research problem:

• *To what extent are changes in leadership and management structures related to shifts in teaching and research performance in public universities across the Nordic countries (Norway, Sweden, Denmark and Finland) in the last decade?*

In doing so, it illuminated three key dimensions:

In a nutshell, the study provided both a *quantitative* assessment of formal structures and a *qualitative* interpretation of the meanings held by social agents (central and unit levels) associated with those same structures, for example, on being 'modern', 'responsive', 'accountable', 'entrepreneurial' and so on. Rather than simply focusing on generating new sets of empirical data, the study aimed to advance new perspectives for theorising ongoing rationalisation processes on the basis of the various disciplinary traditions and competencies brought together in the multidisciplinary research team, the core of which was composed of the authors of the current volume.

# *Theoretical Foundation*

Organisations have traditionally been conceived as either *instruments*, or tools to reach certain ends (goals), or as *institutions*, that is, having lives of their own (Scott 2008). Both views have merits and provide important insights on the dynamics facing modern organisations across the public and private sectors. The rational view of organisations (c.f. Scott 2003: 33–55) views internal behaviour as resulting from the purposeful actions of a set of coordinated social agents within a given local setting (Battilana 2006; Hay and Wincott 1998). Key elements like goal specificity and the formalisation of structures and procedures are seen as critical to the 'rationality of organizational action' (Scott 2003: 34), therefore ranking high on the managerial agenda. The general assumption in the literature is that, as a process, rationalisation is, first and foremost, substantiated around the formal structure of organisations (Thompson 2008; Pfeffer 1997):

[…] in *rules* that assure participants will behave in ways calculated to achieve desired objectives, in *cognitive decision-premises* that guide individual decision making, in *control arrangements* that evaluate performance and detect deviance, in *reward systems* that motivate participants to carry out prescribed tasks, and in the set of criteria by which participants are *selected*, *replaced*, and *promoted*. (Scott 2003: 54; emphasis added)

The rational systems' view of organisations, vividly contested by many (March and Olsen 2006a), puts a preferential emphasis on the role of *formalised rules* (plans, strategies, programmes, etc.) and *normative structures* (roles, sanctions, regulations, etc.). In doing so, this view disregards more tacit dimensions, such as the effects of macro-level scripts (DiMaggio and Powell 1983) and the preferences and behavioural patterns of organisational participants (Powell and Colyvas 2008). Proponents of rational systems argue that structural (often hierarchical) arrangements play a critical role in the ways in which organisations interact with, and respond to, environmental demands (Selznick 1984). Leadership structures are celebrated, with the lower levels of the organisations primarily involved in the implementation, rather than problem assessment, of the key decisions undertaken at higher levels (Blau and Scott 2003).

In (continental) Europe, the basic structural features of academic organisations, that is, decentralisation of authority, loose-coupling of structures, multiplicity of tasks, unclear goals, complex technologies and so on (Pinheiro 2012; Clark 1983), have not traditionally been conducive to the implementation of centralised models of decision-making (Amaral et al. 2003). This is particularly the case when it comes to both the speed and scope of university responses to external demands (Hölttä and Karjalainen 1997). For example, Musselin (2007) contended that:

[…] in universities, formal structures and procedures, even if numerous, rarely favor cooperation and coordination. They hardly define what to do and how to do it because of the specific characteristics of teaching and research […] As a result, changing the formal structures most of the time has no effect […] formal rules and structures weakly support hierarchical power. (Musselin 2007: 75)

Over the years and in many countries, including those within the Nordic region, the conception of traditional or classic research-intensive universities was that of 'ivory towers', that is, closed systems isolated from the dynamics of their surrounding environments (Etzkowitz et al. 2000). A key item in the policy agenda on national and supranational levels has been to institute a series of structural reforms in order to redesign universities. This is partly a result of the rise of a global knowledge-based society/economy (Maassen and Stensaker 2011) and partly due to the strategic imperatives surrounding the modernisation of the Nordic welfare state (Castells and Himanen 2004). This is particularly the case with those with a long historical record. The aim has been to make them more adaptive and responsive to external events and stakeholder demands (Maassen 2009; Etzkowitz 2001; Pinheiro and Stensaker 2013). In other words, ongoing reform processes aim at transforming public universities into organisational actors. There is a push towards becoming tightly integrated, goal-oriented and competitive entities which deliberately or strategically choose their own actions and are held accountable for their own behaviours (Krücken and Meier 2006; Ramirez 2010). In these circumstances, rationalisation measures such as the strengthening of managerial and leadership structures play an increasingly important role (Teichler 2005; Krücken 2011).

The view of universities as rational(ised) tools or *instruments* for reaching certain pre-determined goals or ends (Olsen 2007) pays considerable attention to the technical or material-resource features of the environment (c.f. Scott 2003: 133). These aspects are intrinsically related to the daily management and operations of universities, as well as their performance. In such circumstances, social agency is characterised by what March and Olsen (2006b) called the 'logic of consequences'. According to this logic, university actors behave in ways that are congruent with the successful realisation of strategic objectives either set internally by the central administration or emanating from the outside (government/funding agencies). For example, this is clearly visible in the prominence given to contractual arrangements (Gornitzka et al. 2004) and/or the rise of what Rip (2004) has termed 'strategic science regimes' in academia.

Yet, there are those who have convincingly argued that most organisations, universities included, are not simply instruments or tools at the mercy of certain internal (managers) or external (governments) social agents (Selznick 1966; Olsen 2007). They contended that internal rules, both formal and informal, and standard operating procedures like the allocation of academic power or authority (Tapper and Palfreyman 2011) cannot be changed arbitrarily (Maassen 2009; Maassen and Olsen 2007). Prior consent from academics at the unit level is similarly necessary for the definition of university strategic objectives (Zechlin 2010). Such limitations are seen to safeguard what Clark (1998) referred to as the academic heartland. This is the view held by most institutional scholars who, amongst other aspects, have argued against the limitations of 'means-ends rationality' while assessing change dynamics within organisations (Greenwood et al. 2008; Powell and DiMaggio 1991), universities included (Maassen and Olsen 2007; Pinheiro et al. 2012; Gornitzka 1999).

Regarding the rationalisation processes, it is worth bearing in mind that this is far from unique for the higher education sector.  Thus, studies shedding light on ongoing attempts at transforming public organisations along the lines of New Public Management reform regimes (Christensen and Lægreid 2007; Hood 1991, 1995) provided important insights for our study. We paid particular attention to the nature and degree of response to such transformative processes by social agents at the local (micro) level (Oliver 1991; Powell and Colyvas 2008) within the broad context of mimetic isomorphic processes/collective rationality (DiMaggio and Powell 1983) and the need for securing (internal and external) legitimacy (Deephouse and Suchman 2008). This includes, but is not limited to, the role played by such critical aspects as the *de-coupling* of structural arrangements (Bastedo 2007) and/ or their contextualisation or local translation (Czarniawska-Joerges and Sevón 2005).

#### *Conceptual Backdrop*

#### *Visions of the University*

The study's conceptual framework is built on the work of Johan P. Olsen (2007) on the visions of the (European) university. Olsen made a distinction between an instrumental and institutional view of universities. In the former, the focus is on universities as means to achieve certain predetermined ends (e.g. policy goals or managerial aspirations); the latter sheds light on the university as a relatively independent fiduciary institution characterised by a life (norms, identity, inner dynamics) of its own. Following seminal work on formal organisations (Cohen and March 1974; March and Olsen 1979; Olsen 1988), Olsen advanced four stylised visions, or a typology (along two dimensions; autonomy vs. conflict), on the modern university. The typology was based on different assumptions about what the university is *for* as well as the circumstances under which it will operate appropriately. At the heart of Olsen's inquiry was this question: *what type of university for what type of society?* (Table 1.1).

The four visions represent key features of universities as organisations and institutions. They are thought to be complementary rather than mutually exclusive, that is, key features associated with the four visions are present at any moment in time, shaping dynamics within a given organisation:

The four stylized visions are based on assumptions which make it unlikely that any of them alone can capture current university practices. As less than perfect approximations to the abstract visions, universities as practices show "a shocking diversity" (Neave 2003: 151), and the relations between universities, public authorities and society are characterized by a great variety of forms of interaction, intervention and control (Hood et al. 2004: Part III). (Olsen 2007: 33)

In the FINNUT-PERFACAD study, an issue of particular relevance was that of the interplay between different types of actors and their various roles in the broader higher education system. First, the interplay between internal and external dimensions of universities places pressure on the university governance systems. This reflects the instrumental view in Olsen's typology, as the interplay presumes that expectations exist between the external stakeholders and the internal university dynamics. It further implies that these expectations are mutual, that is, directed not only from

**Table 1.1** Visions of the European university

Source: Olsen (2007: 30). Figure used with permission from Springer.

the external inwards but also from the university towards the external players. The second interplay refers to the degree of internal conflict within the university institutions, which relates to the institutional view in Olsen's typology. It presumes that there is a shared foundation in the core values of the university institution. However, it accounts less for the differences in which the multiple professions in universities adapt to changes in the operational and working environment. In short, the university institution is seen to function in a constantly changing context in which a multiplicity of adaptive measures are necessary. Next, we inspect the different dimensions of interplay which formed a core qualifying factor for Olsen's typology and furthered the conceptual framework for our study.

# *Adaptation of University Governance Between Multiple Pressures*

Higher education institutions are public organisations and operate in a highly institutionalised environment (laden with rules, regulations and procedures). They are heavily dependent on public resources to finance their core activities. As such, higher education institutions are susceptible to shifts in governance arrangements. Yet, these internal changes do not occur in a linear manner, and universities are far from being passive recipients of reform agendas. As institutions, universities have both a history and lives of their own. They are also characterised by multiple internal constituencies (academics, administrators, students, managers). Universities have traditionally been bottom heavy and loosely coupled organisations which change only through minor local adjustments and where academics have had a lot of autonomy to act and direct their own activities (Bleiklie et al. 2017; Clark 1983; Fumasoli and Stensaker 2013; Weick 1976). Internal factors have traditionally been essential in the governance of university dynamics, and a kind of vision of the university has been 'a self-governing community of scholars' (Olsen 2007).

Historically speaking, universities have proven to be rather resilient to shifts in political orientations and economic regimes. They are able to decouple themselves from short-term political imperatives (Bastedo 2007). However, due to globalisation, knowledge society development, changes in political thinking and financial stringency, universities are increasingly embedded in competitive markets, wider material resources and institutional environments. They have social connections, not only to internal academic constituencies and disciplines but also to policymakers and other external stakeholders (Bleiklie et al. 2017; Scott 2003; Williams and Kitaev 2005). This implies that universities are increasingly governed with external environmental demands and factors (Olsen 2007). All these aspects (and others) play an important role in the ways in which universities respond to shifts in government policy.

In looking at the reforms of public institutions' autonomy in general and university organisations in particular, assumptions regarding the rationale for autonomy appear. One key assumption is that reforms can be implemented only if administrative autonomy is strengthened. Such actions come tied to increased external result control, financial incentives and competitions (Fumasoli et al. 2014). This constitutes a double-edged sword: while input autonomy is granted to the public organisation, output control is kept tightly in the hands of the government (Verhoest et al. 2004). A second key assumption is the expectation that autonomy will semi-automatically strengthen competitiveness and specialisation, thus being beneficial to the public institution in comparison to other similar organisations acting in the same market (Fumasoli et al. 2014). Effectiveness, economic efficiency and a better competitive edge with regard to quality through prioritisation are expected to follow as a result of increased autonomy.

The interaction between the state and universities can be viewed as an interdependent principle–agent relationship (de Jong et al. 2016). Rational choice theory guides the thinking in which the institutional leadership of the agent is seen to lean on self-interest, while the principal requires control mechanisms as well as incentives to guide the action (Fumasoli et al. 2014). A social contract exists between the two actors in which the state provides funds to universities to perform research and teaching of the highest level. Policymakers need the information produced by the universities, not only for society at large but also, and in particular, to provide guidance on how to tackle complex and often ambiguous policy problems. Knowledge regimes, such as universities, act as sense-making apparatuses. In policy settings, sense-making includes power struggles as well as contestations and negotiation. Similarly, in universities, sensemaking processes vary depending on how they are organised (Campbell and Pedersen 2014).

The policy guidance and control provided by the state (funder) to the universities in return for services rendered constitute a form of a social contract. Relevance of science to society is a central aspect of the contract. However, the meaning of *relevance* is not a constant; rather, it evolves in time and reflects the general societal development. Relevance changes over time in line with the ideas of what benefits science can bring to society (Hessels et al. 2009). Knowledge regimes are fields of the policy research organisations and institutions that govern them. They are organisational and institutional machineries that generate data, research and policy recommendations, as well as other ideas that influence policy debate (Campbell and Pedersen 2014). The idea follows the same line of thought as Olsen's typology (2007), where the universities may be seen as instruments of national policies while also as leaning on a base of a community of scholars. In other words, universities are expertise-based institutions that simultaneously aim to influence policies proactively and respond to policy initiatives reactively.

The relationship between the state and the universities can be seen as based on highly different grounds. Universities have traditionally viewed themselves as communities of scholars where strong autonomy guarantees high quality and trustworthy research and teaching (Olsen 2007). As a result of this view, society is considered to benefit from a strong science basis without unnecessary middlemen. The state can be seen to sell the university free hands to manage its tasks in the way it sees fittest. In contrast—and juxtaposing this view with another classification of Olsen's typology—the university is an instrument of national policies. The state funds research and highest teaching with the condition that the university performs its duties in a transparent and cost-efficient manner (Olsen 2007). As a result, tax funds are used to support the development of society in ways that are deemed relevant. Activities are reported responsibly and in a way that demonstrates the accountability of the university institution towards the state funder and broader society. However, the autonomy of science is dependent on a non-autonomous economic and management system.

The concept of universities as specific kinds of organisations with limited rationality and loosely coupled has begun to change. The institutional form of universities lives in the midst of a socio-political (and economic) struggle characterised by pressures to reconsider their role, regulatory practices and funding arrangements, as well as the processes that link universities to other societal actors. Now, universities are increasingly transforming into penetrated hierarchies that are managed organisations with a central leadership and formalised rule systems (Bleiklie et al. 2015). Strategic actorhood has become a key aspect in this. Penetrated hierarchies balance between multiple pressures from a broad range of external actors and stakeholders who hold power in the funding and prestige of the universities. As such, this creates a dependence that affects the internal power structures, control mechanisms and working practices of universities. The academically focused pressures have been joined by managerial performance demands, not only from the government but also from other external actors who share an interest in how the university institution is managed. Yet, the ability of universities to respond to the external pressures to, for example, innovate and develop organisational strategies is dependent on the availability of resources from a number of actors (Whitley 2008).

The development of universities as particular types of strategic actors relies heavily on the policies of governments, in particular, regarding their role in steering. National politics and the governance of universities are strongly coupled through the implementation of policies, despite the formal autonomy of universities. The linkage has often been approached from a point of view of dichotomy, where the autonomy of universities and the external steering of them are seen as opposing poles (Stensaker 2014). In an attempt to move beyond a top-down/bottom-up dichotomy and a duel-based view of the governance model, Sabatier (2005) applied a more general policy implementation toolset for the analysis of university– state relationships. In this model, the study of policy implementation is approached with institutional learning as a central element. Though the top-down perspective allows the study of learning amongst proponents of a particular reform, it is ill-suited to similar studies amongst opponents of the reform. According to Sabatier, this lack can be rectified by looking at the strategies with which the bottom-uppers (the opponents) aim to strengthen the attainment of their goals. Sabatier called for the combination of the top-down and bottom-up approaches in the analysis to avoid a bias towards the proponents or opponents. In order to allow for the learning and systematic change (rather than ad hoc deviance from the norm), a period of at least a decade is necessary (Sabatier 2005).

Finally, the interplay between the university governance and political landscape can also be investigated based on the operational logics that are used. Universities work with a dynamic operational logic in their external relations and with an organic logic in the internal environments (Ståhle and Åberg 2012). The former outlines the conditions for the relationship between university actors and external stakeholders, while the latter defines the rationale for cooperation with actors outside academia. In a dynamic working environment, university actors network with other independent actors. The actors have a self-determined relationship with each other, and they can be seen to gain mutually from the interaction. Universities are not considered to simply react to changes in their surrounding environment and/or act as instruments for national political agendas (Olsen 2007), but are presumed to influence their working context themselves. Universities can, then, be seen as active elements of policy planning processes, provided they have the will and skills to act.

The way universities interact with the policy planning actors is, however, also linked to the *internal* working environment. In the modern context, universities function as a type of representative democracy (Olsen 2007) in the midst of managerial pressures. This democracy continues to rest on the ideals of academic freedom, broad interest representation, an open discussion culture and respect for the self-correcting mechanism of science—in essence, the academic heartland (Clark 1998). In the Nordic context, the democratic aspect includes an active organisation of student representation and involvement in the formal structures of the university. The systems have been built to be responsive to the needs of the groups whose work and study conditions are affected by collective decisions regarding the running and structure of the university. In such an organic working environment, dialogue and exchange of experiences and feedback are central building blocks in developing functions and academia (Ståhle and Åberg 2012). It can be argued that the core skills for dialogue exist in the conventional academic environment. Thus, the issue becomes whether these skills can be transferred and adapted for use in interaction with the university management and policy planning actors.

The interplay between shifts in governmental policy, university governance and internal university dynamics form a complex, continuously changing system. In the Nordic context the converging policies form a dimension that affects the way the national systems develop. These constitute a moulding tool that can either support system development or act as a hindrance to organisational learning.

### *Operationalisation of the Conceptual Framework*

In order to operationalise the study, six organisational/management mechanisms related to organisational performance were identified (see later). A shared understanding of what performance means in an academic university context was formed in order to ensure a coherent approach to the major issue at hand. An in-depth discussion on the meaning of performance, as well as other central concepts such as accountability, are included in Chap. 2 of this volume. Extant literature on organisations more generally, as well as on the nature of higher education systems and universities more specifically, was used to sketch these. These mechanisms are as follows:

The study acknowledged that modern universities are complex organisations, and that performance can be achieved in multiple ways. As such, 'NPM/modern reforms' is a messy concept; therefore, it was necessary to decompose what so-called new management structures imply for university performance. The six identified mechanisms were a way to acquire more knowledge about what the relationship is between management/governance structures and performance. The next step was to formulate the basic assumptions underpinning the study in light of the research problem following Olsen's work,1 namely:

A series of core hypotheses for each of the six mechanisms were then identified, driving the development of the survey questionnaire and

<sup>1</sup>Analytically, Olsen's four stylised visions models can be reduced to two broad ideal types or archetypes, instrument and institutional or cultural views, with models being 'variants' of these archetypes. 'Market' models also assume a kind of rationality that build on the same mechanisms as the instrumental model. The 'democracy' model builds on a normative assumption about the legitimacy of participation, which connects back to the institutional or 'cultural' model.

interview guide.2 These mechanisms are described in some detail later. It should be noted that while these hypotheses were not tested per se in the study, they were instrumental in developing the conceptual framework into a coherent structure. They played an important role as we designed the operationalisation for the gathering of quantitative and qualitative data. The hypotheses were used, for example, to ensure that the two sets of data corresponded with each other and could be utilised to study the same phenomena in a comparable and complementary manner. We return to these hypotheses in the concluding chapter of this book to reflect on their role and meaning in the empirical analysis of our data. The methodological considerations are discussed in more detail in the latter part of this chapter.

# *Strategy*

# *Decision-Making Structures*

<sup>2</sup> In order to operationalise the study empirically, a series of key questions were devised around eight key themes associated with each of the six mechanisms described above (consult Table 1.5 and interview guide and survey template in Appendix). The empirical evidence provided in Part II of this volume sheds light on key findings along selected core themes, emanating from the survey questionnaire and the interview data.

### *Organisational Structure*

# *Accountability Measures*

### *Funding Arrangements*

# *Cultural Climate*

In addition to shedding light on the relationship between the identified mechanisms associated with new management structures and performance, the study also aimed at exploring:

Finally, the study aimed to provide new theoretical explanations for how changes in university governance can be interpreted in light of the extant literature and major organisational and public administration theories. Our interest was in the linkages between formal change and performance, although not in a strict causal sense.

# Research Design and Methodological Considerations

This FINNUT project adopted a comparative research design and applied a mixed methods approach (Bryman 2006) comprising a desk-top analysis, surveys and interviews (see Appendix). While the time period 2000–2013 was set as the focus of study, some of the thematic analysis included developments until 2016 in order to respond to recent changes brought up in the empirical data, in particular, in the interviews. The desktop analysis consisted of major policy initiatives with national statistics and other official documentation on performance data related to education, research and management of the higher education sector. Such registerbased and performance-related data can be compared across countries and institutions (Ragin and Rihoux 2009). The data provided background material for the further development of the study (in the form of a comprehensive database), and relevant information has been utilised in the individual chapters composing this volume. A large set of new empirical data was collected through surveys and interviews.

The target groups of the survey were full-time managerial staff and academics employed at the 54 publicly run universities in Denmark, Finland, Norway and Sweden. The survey took place at the end of 2014 and the beginning of 2015. The sampling and the definition of the population was done differently in the four countries because of different national higher education systems, availability of sampling frames and also considering the different information needs of national research teams. Table 1.2 describes the study's population, sampling and response rate.

The national samples were planned in a manner that allowed for Nordic comparisons. The comparative international subsamples included the respondents working in senior positions (European career levels III and IV) in official management positions or in ordinary academic positions.

**Table 1.2** Survey population, sampling and response rate

a Of the respondents, 73 did not report about their title, and 9 individuals worked primarily outside Finland

**Table 1.3** Comparative samples of managers and senior academicsa

a Question: 'Do you hold an official management position?'

The comparative samples are described in Table 1.3. Because the management positions differ from country to country, in comparative samples, the variable 'are you holding an official management position?' was used as a categorising variable. This means that the distinctions between academics and academic managers are based on the respondents' own reporting. The Nordic comparisons were made by using subsamples that best fit for the purpose. For instance, in some cases, it was better to compare only heads of departments and deans, whereas, in other cases, it was more suitable to work with the self-reported official management positions.

The most inevitable limitations of the data pertain to the fact that it describes subjective performance, that is, the performance as experienced and reported by the informants. During the research project, a large amount of statistical data on actual (objective) performance was also collected from each country. However, due to the long timescale of the academic performance, national differences in performance measurement and intervening variables, the connection between survey data and statistical data was statistically difficult to establish. Therefore, the survey findings described and explained the subjective performance (Kivistö et al. 2017).

For the interviews, we selected two case universities in each of the four countries. We chose to perform the interviews at one of the flagship universities in each country and one regional university. The case universities were multidisciplinary, and the inclusion criteria were that the universities have both natural (including medicine) and social sciences. Within the institutions, we selected participants strategically based on their official positions in the system. These positions were senior academics from the social and the natural sciences, managers from different levels who mainly had academic backgrounds and professionals in central administration dealing particularly with issues relating to research and teaching, as well as their development. Overall, a total of 93 interviews were conducted between the springs of 2015 and 2016 (Table 1.4).

A common interview guide was developed. As the selected participants were highly educated people and experts in their fields, we used the elite interviewing approach (Aberbach and Rockman 2002; Goldstein 2002). Such an approach puts an emphasis on giving room to the interviewees to talk freely on the presented themes while ensuring that the different themes are covered so as to be able to compare findings across the cases. A semi-structured interview approach was selected, and the questions were adjusted to the knowledge of the participants.

Since quantitative methods are more suitable for providing an overview from a larger audience, and the ability to dig deeper into a theme follows qualitative methodologies, different questions were posed in the survey and interviews. The questions evolved around similar themes (see Table 1.5) per the conceptual and analytical framework adopted in the study, as sketched out earlier. The qualitative data generated by the interviews aimed at shedding light on the main drivers of and reactions to

**Table 1.4** Number of interviewees per country

rationalisation processes. The data also helped identify qualitative effects across teaching and research activities. This way of collecting data increased the study's external validity (Denzin and Lincoln 2011). SPSS was used in the analysis of the statistical data. A systematic content analysis of the qualitative data was conducted using Nvivo.

Ethical guidelines were followed in the collection, publishing and the storing of data. We assured the anonymity of the participants in the datacollecting phase, and we referred to them in an anonymised manner related to the flagship/regional universities, positions and fields (consult Part II of the volume). The project was reported to and approved by the Norwegian Centre for Research Data, which also stored the anonymised quantitative data.

There were certain limitations which had to be accounted for through the analysis phase of the project. Due to different access requirements in administering surveys in the case countries, four individual approaches were applied. Some country teams sent the survey to all the academic staff, while others sent it to selected groups, as described earlier. This bias had to be addressed while selecting groups for the analysis of statistical data so that the same type of data were included in the comparisons. Another issue was the different organising structures of higher education institutions within the Nordic countries. This also had to be scrutinised, as we were comparing findings across cases and countries. A strategy to deal with these critical issues and to increase the reliability of the data was to include researchers with knowledge of the specific countries in each of the project's publications.3 The semi-structured interview approach also made it more difficult to analyse the material when compared to fully structured interviews. This approach requires a more thorough reading and inductive approach to the data. The teams used a similar concept tree structure in the content analysis of the interview data to increase comparability between the countries.

<sup>3</sup> In the case of the current volume, each chapter (with the exception of Chap. 6) has at least one co-author from each of the four countries, and all the individual chapters have been peer reviewed by an editorial board composed of senior authors from the region who were also directly involved with the study, as either team leaders and/or members.

# The Volume's Organisation and Individual Contributions

As indicated in section "Introduction: Rationalisation and Converging Higher Education Policies" of this chapter, the volume reports on the results of a comparative project that assesses the interplay between changes in leadership and management structures in public universities across the Nordic countries and shifts in teaching and research performance in the last decade and a half. The chapters included in this book illuminate the key aspects associated with some of the thematic areas presented earlier from a comparative perspective. However, each chapter stands on its own, both conceptually and empirically, and can be read separately. The overall results should, however, be assessed against the backdrop of the larger project that was undertaken.

This book is structured into three distinct Parts. In Part I, the first chapter sets the context and presents the rationale for and the design of the FINNUT-PERFACAD study and elaborates on the theoretical foundations and conceptual landscape underpinning it. Chapter 2 by Kivistö et al. provides clarification on the key terminology underpinning the study, including contextualisation within a Nordic setting. The book then moves on to Chap. 3 where Pinheiro et al. describe the system evolution, as well as the higher education systems of each of the four Nordic countries. Part II of the book is dedicated to thematically focused chapters. While all of them lean on the same conceptual backbone that encompasses the study as a whole, each of the chapters adopts its own theoretical approach to the question at hand. The chapters begin from the system level and move towards the institutional.

Part II begins with Chap. 4 by Söderlind, Berg, Lind and Pulkkinen on how research funding systems at the national level affect local perceptions of research as a core task. Chapter 5, by Lind, Hernes, Pulkkinen and Söderlind, elaborates on the role that increasing levels of external funding play on the experiences of autonomy and how the effects on academic freedom are felt in research work. In Chap. 6, Geschwind, Berg, Lind and Aarrevaara investigate the evolving roles of academic leaders and managers amidst reforms that emphasise performativity alongside academic virtues. Chapter 7, by Aarrevaara, Pinheiro and Söderlind, explore the various ways in which strategic processes play out within Finnish, Norwegian and Swedish universities. Chapter 8, by Hansen, Aarrevaara, Geschwind and Stensaker, undertakes a comprehensive approach to evaluation practices by bringing together some of the topics discussed in the other chapters composing Part II of the volume.

In Part III, we return to look at the results of the FINNUT-PERFACAD study as a whole. Led by Geschwind, the volume editors take a step back to reflect on where we started and what we have learnt on the journey this comparative study has taken us on. In closing the volume, the editors contemplate on next steps and potential new avenues for future research endeavours.

**Acknowledgements** The data presented in the current volume and individual chapters emanate from a comparative study funded by the Norwegian Research Council under its FINNUT flagship program, a long-term program for research and innovation in the educational sector program. The project number was 237782, and the project was titled 'Does it matter? Assessing the performance effects of changes in leadership and management structures in Nordic Higher Education'.

# References

———. 2017. Organizational Configurations of Modern Universities, Institutional Logics and Public Policies – Towards an Integrative Framework. In *Managing Universities: Policy and Organizational Change from a Western European Comparative Perspective*, Palgrave Studies in Global Higher Education, ed. I. Bleiklie, J. Enders, and B. Lepori, 303–326. Cham: Springer International Publishing.

———. 1995. The 'New Public Management' in the 1980s: Variations on a Theme. *Accounting, Organizations and Society* 20 (2–3): 93–109. https://doi. org/10.1016/0361-3682(93)e0001-w.

———. 2006a. Elaborating the 'New Institutionalism. In *The Oxford Handbook of Political Institutions*, ed. R.A. Rhodes, S.A. Binder, and B.A. Rockman, 3–22. Oxford: Oxford University Press.

———. 2006b. The Logic of Appropriateness. In *The Oxford Handbook of Public Policy*, ed. M. Moran, M. Rein, and R. Goodin, 689–708. Oxford: Oxford University Press.

G. Krücken, A. Kosmützky, and M. Torka, 63–84. Bielefeld: Transaction Publishers.

———. 2008. *Institutions and Organizations: Ideas and Interests*. London: Sage.

**Open Access** This chapter is licensed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/ by/4.0/), which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence and indicate if changes were made.

The images or other third party material in this chapter are included in the chapter's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the chapter's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.

# Performance in Higher Education Institutions and Its Variations in Nordic Policy

*Jussi Kivistö, Elias Pekkola, Laila Nordstrand Berg, Hanne Foss Hansen, Lars Geschwind, and Anu Lyytinen*

J. Kivistö (\*) • E. Pekkola • A. Lyytinen

Faculty of Management and Business, Tampere University, Tampere, Finland e-mail<EMAIL_ADDRESS><EMAIL_ADDRESS><EMAIL_ADDRESS>
L. N. Berg Department of Social Science, Western Norway University of Applied Sciences, Sogndal, Norway e-mail<EMAIL_ADDRESS>
H. F. Hansen Department of Political Science, University of Copenhagen, Copenhagen, Denmark e-mail<EMAIL_ADDRESS>
L. Geschwind School of Industrial Engineering and Management, KTH Royal Institute of Technology, Stockholm, Sweden e-mail<EMAIL_ADDRESS>
© The Author(s) 2019 37 R. Pinheiro et al. (eds.), *Reforms, Organizational Change and Performance in Higher Education*, https://doi.org/10.1007/978-3-030-11738-2\_2

# Introduction

Year after year, the higher education sector in Nordic countries continues to enjoy the highest level of public investments among all the OECD countries. Like in other European countries, these investments have put higher education institutions (HEIs) under increased scrutiny, with the obligation to explain their behaviour and performances. This trend is further intensified by the fact that the higher education sector competes with other sectors for public funds, namely primary and secondary education, public health, social services and defence. At the same time, Nordic HEIs are facing increasing expectations to become more 'entrepreneurial' and increase their abilities to compete in a more globalised market. All these mean that there is an increasing focus on cost efficiency and productivity, as well as quality.

The need for greater efficiency, productivity and quality in the higher education sector has triggered increased governmental interest towards different mechanisms of accountability, especially evaluation and performance measurement. This interest has developed over a relatively long period of time, but it has now reached its culmination point in many ways. For instance, advances in citation tracking, performance data collection and databases and the professionalisation of evaluative practices and methods have opened new avenues for verifying accountability.

This chapter offers definitions for the key concepts used throughout the book, which are as follows: accountability, evaluation and performance measurement and management. Each section is followed by a short contextualisation of the concept in Denmark, Finland, Norway and Sweden. The chapter ends with a short discussion about the policy convergence between Nordic countries and the reasons for it.

# Accountability

The concept of accountability has always been a topical question in higher education. Over time, academics and their institutions have had relationships with various stakeholders (church, states and local communities) in which some sort of 'answerability' has continuously played an important role. In the modern world, such answerability relates to universities' accounting for public money spent, as well as academics explaining their professional work and its outcomes (Huisman 2018). The concept of accountability, however, is multifaceted and ambiguous, allowing a range of understandings and definitions (Christensen and Lægreid 2017). Often, the concept of accountability is used in a broad sense, making it difficult to maintain clear distinctions in terms of related concepts like transparency, responsiveness, responsibility, answerability and liability (Bovens 2007; Dubnick 2014). Essential questions for accountability are as follows: who is to be held accountable, for what, to whom, and through what means? (Huisman and Currie 2004; Trow 1996). However, in general, accountability can be considered a relational principle that attaches certain expectations of one party to the actions and performance of another, thereby making the performing party responsible for its actions. The concept can be studied according to a personal and a structural perspective (Sinclair 1995). The personal viewpoint relates to internal virtues that guide actors' actions, independently of formal rules, while the structural perspective is linked to mechanisms between an actor and a forum to justify actions (Bovens 2007). According to this latter view, accountability is a relational concept providing a link between those held accountable and those who have a right to claim the accountability of others (Bovens et al. 2014). For our analytical purposes, in defining accountability, we find Bovens' (2007, 450) definition especially useful, where accountability is generically seen as a 'relationship between an actor and a forum, in which the actor has an obligation to explain and to justify his or her conduct, the forum can pose questions and pass judgement, and the actor may face consequences'.

The main purposes behind the need for accountability vary. For instance, accountability is needed to discourage fraud and manipulation, strengthen the legitimacy of institutions and enhance the quality of performance and work as a regulatory device through the criteria made explicit in the various reports requested by the reporting institutions (Huisman and Currie 2004). As such, it can be understood as 'a constraint on arbitrary power, and on the corruptions of power, including fraud, manipulation, malfeasance and the like' (Trow 1996, 311). Much of the discussion on accountability is geared towards economic or financial aspects. In addition, in the context of higher education, discussion on accountability is often paired with discussion on efficiency, effectiveness and performance evaluation. In this sense, the process of verifying accountability calls for proving, by effective means, that higher education has attained the predetermined results and performance. Correspondingly, accountability in higher education includes elements such as the rational use of resources, provision of evidence, evaluation of evidence, attaching importance to costs and effectiveness and improving the education process (Dressel 1980; Kai 2009).

Accountability regimes in higher education systems still tend to be the combinations of types of accountability principles and processes (King 2015). Out of these perspectives, *professional* and *political* accountability are often considered, especially important in the context of higher education (cf. Huisman and Currie 2004; see also Bovens et al. 2014; Romzek 2000). The difference between these two factors is related to the source of standards for performance. Professional accountability involves a high degree of autonomy for individual academics, whose decisions are based on internalised norms of what is considered appropriate action and performance. Especially on the side of research, the professional accountability standards are formulated in the academic community based on internal professional norms, which are enforced by academics. Due to the strong emphasis on professional authority, they are also more difficult to steer or manage in formal organisational settings.

Political accountability refers to political expectations for HEIs' performance. In this sense, demands for accountability are a safeguard to protect the interests of various stakeholders and interest groups, as well as the public. In the widest sense, political accountability also includes an element of social accountability, which means HEIs' answerability to wider society, not just the constituencies and political actors involved in the governing of HEIs. In more narrow terms, political accountability illustrates the governance relationship between the state and state-funded universities. In this context, a further distinction can be made between legal and financial accountability on the one hand, and academic accountability on the other. Other equally important aspects of autonomy are *legal* and *financial* accountability (Trow 1996). Legal and financial accountability highlight the universities' obligation to report how state public resources have been used and to what effect. This side of accountability clarifies whether the university is doing what is required of it by law and whether its resources are being consumed for the purposes for which they were provided.

Discussion on accountability is often accompanied with discussion about the limits of the self-regulative capacity of institutions (autonomy) and individuals (academic freedom); the emergence of various accountability mechanisms can be interpreted as a signal of a lack of trust in academic work and the functioning of universities (Gornitzka et al. 2004; Kivistö 2007; Schmidtlein 2004). Institutions universally desire to uphold their rights and capacities of self-governance, maintain substantial autonomy, and exempt themselves from excessive interference from the government and other institution-external entities. However, accountability in its all forms implies outside interference, and intensification of accountability is often at odds, at least to some extent, with different aspects of institutional autonomy. As the notion of accountability seems to be highlighted more explicit on stakeholders' agendas than in the past, the balance between accountability and autonomy often tilts towards an overemphasis on accounting for performance (Huisman 2018; Kai 2009).

#### *Contextualising Accountability in the Nordic Countries*

#### *Denmark*

Universities in Denmark are met with several accountability requests. Professional accountability is important in relation to the quality of educational programmes, and especially, the quality of research. However, to some extent, professional accountability has been challenged by political accountability, especially in the wake of the mergers of former governmental research institutes into universities.

Not surprisingly, political accountability regimes are well developed in welfare states where higher education is fully funded through taxation and to a certain extent, research is too. Over the last 15 years, reforms as part of higher educational policy have aimed at enhancing not only political but also social accountability. External stakeholders have become members of advisory councils and university boards. A corporate-like governance structure, including boards with a majority of external members and a chairman who is politically approved, has been introduced. The former elected leaders have been replaced by top-down appointed leaders. All in all, political accountability has been enhanced through intensified managerial accountability, as well as through the introduction of New Public Management (NPM) instruments like contracts and performance-based funding. However, these instruments have come hand in hand with more traditional legal and bureaucratic forms of accountability in recent years, for example, the dimensioning of educational programmes not matching labour market demands.

# *Finland*

Emphasising different aspects of accountability has played a substantial role in shaping the contents of the Finnish higher education policy over the past 25 years. After the introduction of block grants and the performance-based funding model in the mid-1990s, especially financial accountability has dominated the discussion about the accountability of universities. Currently, the Finnish university funding model is one of the most performance-oriented models in the world: over 70% of the core state funding is based on success in performance criteria (de Boer et al. 2015). At the same time, the role of legal accountability in Finnish higher education policy has weakened after the new Universities Act that came into effect in 2010. This legislative reform changed the legal status of universities from being part of the state administration to being independent legal entities. Legislative regulation on central aspects like staffing policies (especially, regulation on staff qualifications, recruitment and remuneration) and internal governance of universities was significantly changed; at present, Finnish universities enjoy a relatively high level of autonomy compared with universities in many other European countries, including other Nordic countries (see Bennetot Pruvot and Estermann 2017).

In Finland, the role of universities in developing the economy has been supported and actively managed by successive governments since the 1960s. This policy has continued to the present, when universities are seen as central actors in the Finnish knowledge-based economy and core parts of the Finnish innovation system expected to contribute to sustainable economic growth, employment and national competitiveness (Biggar Economics 2017). At the same time, Finnish higher education policy recognises the importance of higher education's social and civic responsibilities, for example, in reducing poverty, inequality and social exclusion. Year after year, among all the OECD countries, Finland is among the top three countries with the highest level of public expenditure (compared to the GDP) on HEIs (see, e.g. OECD 2017). This has kept political expectations, and therefore, political accountability, at a high level. Higher education in general and universities specifically continue to be at the core of educational policies, and thus, political interests. At the concrete level, this has been evident in the 'Government Programmes' and 'Action Plans' of the past ruling cabinets (see, e.g. Prime Minister's Office 2017). At the same time, important stakeholders, such as several trade unions, student unions and employer organisations (e.g. the Confederation of Finnish Industries), have continued to keep universities and higher education high on their political agenda.

Professional accountability in Finland has remained strong alongside the other forms of accountability. For instance, various scientific associations operating under the Federation of Finnish Learned Societies are actively exercising their gatekeeping role, especially in publishing. Scientific associations are often responsible for publishing scientific journals and other publications, and they appoint the editorial boards and editors of these journals. In addition, the various trade unions, such as the Finnish Union of University Professors and Finnish Union of University Researchers and Teachers, continue to play a role in upholding and safeguarding professional norms and values of Finnish academic profession.

#### *Norway*

Accountability aspects have been in the focus of Norwegian higher education in the last three decades. The managerial structures have been changed through the 'Quality Reform' of 2003–2004, which involved an effort to enhance political and social accountability by including politically appointed stakeholders on the boards of the universities. The Ministry of Education introduced a model where the board appointed the chair, as well as the rector. This model replaced the traditional one where the rector was elected by the university and chaired the board (Gornitzka and Larsen 2004). Still, the individual institution could choose which model to follow, resulting in a hybrid version in many universities, with both appointed and elected leaders in the institutions. The aim in giving the universities the possibility of choosing the governance model was to increase autonomy (Stensaker 2014).

A performance-based funding system was introduced through the same reform, and this can be considered an important part of accountability programmes (Frølich 2011). Such a system offers a neutral framework for assigning funds between universities and scientific fields. The shares of funding related to performance-based indicators are much smaller than they are, for example, in the Finnish system. In Norway, 30% of the funding is assigned according to performance-based indicators from teaching and research, while the basic funding (70%) provides long-term and stable financing for the sector (Kvaal 2014). Most Norwegian HEIs are state owned, but private institutions are granted the same state funding as the public. As for professional autonomy, there has been an increased focus on quality of teaching and alignment in educational programmes, as well as on research quality and quantity. This focus on both quality and quantity has challenged the professional autonomy via a bureaucratic and political form of accountability.

### *Sweden*

As in the other Nordic countries, Swedish universities are accountable to many stakeholders. The legal accountability in Sweden has changed in the last two decades. The country has a long tradition of central state steering based on planning. However, this changed during the 1980s and 1990s across many sectors, including higher education. During the 1990s, following a ground-breaking reform in 1993, the higher education sector was fundamentally deregulated, with a reduction in central laws and ordinances and an increased formal autonomy for HEIs. Although most universities remained state agencies, with the autonomy (or freedom) reform, two HEIs, namely University College Jönköping and Chalmers University of Technology, became private foundations upon applications to the government. The main differences were regarding the internal organisation and regulations of hiring academic staff. Academic positions had thus far been centrally regulated, but from then on, professorships could be initiated by each HEI.

An important aspect of the accountability context in Sweden is the funding system. The reform in 1993 also introduced performance-based funding in education. The system is based on the number of students starting education (input) and number of students graduating (output). The government also holds HEIs accountable in annual dialogues. Each year's 'production' is presented in appropriations laid out by the government. The main aspects of state accountability are within the realm of evaluation (details are given below). As in Denmark, external stakeholders are represented on university boards.

The professional accountability remains strong, both as a standalone aspect of academic work and as intertwined in political accountability. Like in Finland, university teachers' and researchers' unions are a strong voice for the academic profession. Peer review is an ever-growing activity, for example, in conferences, research proposals, academic publications and hiring and promotion of academic staff. Senior academics spend a significant amount of time assessing colleagues.

#### *Evaluation*

Evaluation is closely related to accountability, as it is often considered an action that is used to verify accountability. For this and other reasons, evaluation has been a key theme in the public policy and higher education literature for at least three decades. It is obvious that evaluation can be used for control, aiming at contributing to holding individuals, groups, departments and organisations accountable. However, evaluation can also be used for many other purposes, including further learning and enhancement and enlightenment purposes. Evaluation, therefore, is not limited to summative (retrospective) assessments, but it can be also formative (during the process) or diagnostic (prior to the process). Moreover, evaluation can be used in strategic and tactical ways when actors try to pursue specific interests, as well as in symbolic ways when they wish to signal aspects like novelty. A more recent discussion related to use is the discussion on constitutive effects of evaluation procedures and performance indicators (Dahler-Larsen 2014). The idea is that evaluation creates a new reality influencing and changing interpretations of the world, thereby enabling shifts in social relations and practices.

The literature is rich in defining the concept of 'evaluation'. The North American literature is mostly concerned with aspects related to programme evaluation. Michael Quinn Patton, for example, defines (programme) evaluation as involving 'the systematic collection of information about the activities, characteristics, and outcomes of programs to make judgements about the program, improve program effectiveness, and/or inform decisions about future programming' (Patton 1997, 23). In the Nordic context, evaluation has been defined in a much broader way, including evaluative procedures for assessing the effectiveness of public organisations. An example can be found in the work of Evert Vedung, who defines evaluation as 'careful retrospective assessment of the merit, worth and value of administration, output and outcome of government interventions (in Swedish: offentlig verksamhet), which is intended to play a role in future, practical action situations' (Vedung 1997, 3). This broader definition can be interpreted to resonate with the ideals of the Nordic institutional welfare state.

As evaluative thinking has increasingly become integrated into regulative and managerial practices, a distinction between evaluation on the one hand and other concepts, such as quality assurance, accreditation and performance measurement on the other, has become increasingly blurred. In the higher education sector, we find an array of evaluative systems and procedures performed at different levels and directed towards different activities, especially teaching and research (Geschwind 2016). At the national level, evaluative procedures are part and parcel of several accountability mechanisms by governments, such as performance-based funding and various external quality assurance instruments, most notably, accreditation and auditing systems (e.g. Gover and Loukkola 2018; Santiago et al. 2008). In the Nordic countries, these evaluative procedures are performed by national, autonomous organisations with their own boards, management and staff (Smeby and Stensaker 1999). Their various evaluation practices are typically based on peer review panels including members of academic staff, students and stakeholders from working life and supported by project managers from the evaluation body. These national bodies have an umbrella organisation called the European Association for Quality Assurance in Higher Education (ENQA). They have presented European standards and guidelines (ESG) to be followed by all national bodies. There is an ongoing and recurrent process of accreditation of quality assurance bodies (Stensaker et al. 2011).

Intra-institutional evaluative procedures play a critical role in shaping the teaching and research activities in universities. These procedures are built into educational programmes, for example, in monitoring student satisfaction, and at many universities, peer review–based evaluations of departments and programmes ('audits') are organised and carried through. Since the 1990s, HEIs in the Nordic countries have been expected to take responsibility for their own evaluation activities. Depending on the focus of the national systems, these institutional evaluations have either mirrored or complemented the national ones (Karlsson et al. 2014). This development of intra-institutional evaluation has also implied that HEIs invest in the internal evaluation capacity in the form of designated evaluation units and hiring professional staff with evaluation experience.

At the level of individual academics, peer review–based evaluative procedures are a standard precondition for scholars to be appointed and promoted, as well as having their research projects funded and findings published. Increasingly, conferences have become based on peer review. As a whole, higher education sectors in most European countries are saturated with aspects pertaining to evaluation to the extent that one can refer to 'evaluation overload'. For instance, a recent study showed that senior academics can spend around a month per year evaluating other researchers' work (Langfeldt and Kyvik 2010).

Evaluation focuses on assessing quality, comprising both education quality and research quality. The concept of quality is ambiguous, and both education quality and research quality are multifaceted and multidimensional phenomena. Quality can be judged, among other things, as exceptionality, consistency, fitness for purpose, value for money and transformation (Harvey and Green 1993). Originally, this traditional categorisation was an attempt to deconstruct the rather abstract concept of quality in the context of higher education, focussing on its various dimensions to reconcile different ways of thinking about quality (Santiago et al. 2008; Stensaker 2004). Over the years, it has undoubtedly become the most influential framework for understanding and discussing quality in the context of HEIs. Although almost 25 years old, its position remains unchallenged in the field of higher education research (Kivistö and Pekkola 2017).

In more concrete terms, quality in education can include aspects like preconditions (staff competence, talented student body and infrastructure), contents (relevant curriculum), process (pedagogical arrangements carried through by trained teachers) and the achievement of learning outcomes, retention and student employability (see, e.g. Gibbs 2010). Quality education can even be further contextualised, including the views and expectations of relevant stakeholders (Jongbloed and Benneworth 2010). The emphasis on the different phases of education differs over time, and evaluation systems are usually readjusted slightly according to the requirements of the operating environment. For example, in some systems, a great emphasis can be placed on teacher competences, whereas other systems can rely heavily on an assessment of the final thesis (Lindberg-Sand 2011).

Although it differs slightly across the scientific fields and methodologies used, the characteristics of research quality often relate to aspects like objectivity, validity (internal and external), reliability, open-mindedness, honesty and thorough reporting (e.g. Miles and Huberman 1994; Steinke 2004). As in education, not only has research output been under scrutiny, but so has the preconditions for undertaking research, that is, the research environments. Research quality evaluations have increasingly included assessments of the influence of the research, as shown both within academia and beyond, in the society at large. The latter could be evaluated by using patent and licensing data and counting the number of new companies, as well as by asking research environments to submit more qualitative 'impact cases' (Karlsson 2017).

The latest trend has been to evaluate the administrative operations at the institutional level as well. These 'administrative assessment exercises' have been undertaken with the same methodology as the evaluations of education and research, making use of panels of experts, both academics and professional support staff. The balance between central and local administrative support, digitalisation, efficiency and effectiveness and new roles and competency needs for administrative staff have been recurrent themes in these evaluations (Karlsson and Ryttberg 2016).

#### *Contextualising Evaluation in the Nordic Countries*

### *Denmark*

Evaluative procedures are widespread in Danish higher education. External evaluation of educational programmes was adopted in the late 1980s and institutionalised in the 1990s, at first as a soft national system supporting local quality development, but from 2007 onwards, as a hard controloriented accreditation system where every bachelor's and master's programme, new and established, had to be approved (Hansen 2011). Currently, the system is being changed into one based on approval of the internal quality systems at the institutions. If approval is refused, institutions are not allowed to establish new educational programmes, and existing programmes must be accredited. At the institutional level, student satisfaction evaluation is a routine exercise. Evaluations of educational programmes in the light of stakeholder and labour market requirements are carried out on an ad hoc basis.

Compared with education, research evaluation is less standardised. There is no national system for evaluation of departments, disciplines or scientific fields. Some universities have developed institutional procedures aiming at taking all departments through research evaluations based on international peer review, while others do evaluations on an ad hoc basis or organise with advisory councils giving advice on how to improve research quality. However, in connection with basic funding of research in universities, a performance-based funding system works as an evaluation tool for research. While this metrics-based evaluation tool is meant to be an accountability and quality improvement tool on a national level, giving universities incentives to improve research, the system has been used internally at universities in budget models and for setting performance demands (see Chap. 4). In addition, evaluation is also linked to competitive research funding. Funders of research, public and private, evaluate the quality of research proposals.

#### *Finland*

Finnish universities, units and academics are subject to several types of evaluative procedures. The most important of these are institutional audits (complying fully with previously mentioned ESG), which form the core of the national quality assurance system. The Finnish Education Evaluation Centre (FINEEC) and its predecessor the Finnish Higher Education Evaluation Council (FINHEEC) have conducted audits of the universities' internal quality assurance systems since 2005. According to legislation, all HEIs must regularly (every six years on average) participate in external audits of their operations and internal quality assurance systems (Eurydice 2018). The main emphasis of the audits is to secure that institutions have properly functioning internal quality assurance systems; however, they do not evaluate the quality of education, research, or other institutional activities per se. The nature of external audits is primarily enhancement and improvement rather than control; failing an audit does not result in any sanctions, but instead, only initiates a mandatory re-audit process. This development rather than control orientation in evaluation can partly be explained by the rather extensive use of performance-based funding in providing core funding to universities. Having an accreditation type of evaluation system could be considered to add another layer of control, thereby making quality improvement a process of mandatory compliment rather than actual development.

Compared with that of education, the evaluation of research in Finland is a more multifaceted process, and it is more driven by needs of securing accountability. The Academy of Finland, the national funding agency for research, is responsible for financing research, and therefore, evaluating the research quality (applications). In addition, most universities regularly conduct internal research assessment exercises based on international peer review. However, unlike in some other European countries, there is no national-level comprehensive and centralised evaluation procedure for research. The quality of research, however, is considered in the funding model based on the following: (1) a bibliometric indicator awarding universities for publications 'points' (13% weighting) based on their coefficient ('JUFO' levels 0–3), which is expected to reflect the quality of publication outlets, and (2) amount of competitive research funding (9% weighting).

# *Norway*

According to legal rules, the individual Norwegian HEIs are responsible for maintaining the quality of the offered education through systematic evaluations of quality, but the institutions are allowed to choose how to organise this work. Such evaluations are supposed to cover quality aspects of education, learning processes for students and practical studies, as well as regarding relevance of the educations to society. In addition, the Norwegian Agency for Quality Assurance (NOKUT) supervises the institutions and evaluates how the quality assurance work is performed. NOKUT's mission is to supervise and provide information used to develop the quality of higher education in Norway, as well as evaluate and control the quality of study programmes and institutions. NOKUT performs periodic control of the accredited higher education programmes and institutions, but such controls are supposed to occur at least every eight years. The standards and guidelines recommended by NOKUT comply with ESG as far as possible.

The follow-up on research quality depends on several stakeholders acting as funders of the research. The Norwegian Research Council is a main actor in providing funding for research in Norway, but smaller public and private agencies also play a role. For accountability and competitive reasons, the quality of research applications is evaluated through peer-review processes. The Nordic Institute for Studies in Innovation, Research and Education (NIFU) is an independent research institute that aims to deliver data on how Norwegian research and innovation is developing and the importance for society. Another central actor is the Norwegian Centre for Research Data (NSD), which evaluates the quality of research projects prior to their initiating to secure anonymity of the participants; the NSD also acts as a national agent for securing and storing collected data. The Statistics on Higher Education (DBH) database information is also distributed by the NSD.

Several databases have been established in Norway to secure usable data to follow up on evaluations as actions to verify accountability. Data related to teaching, as well as research-related activities, are collected and publicly available at the NSD, DBH, NIFU and Statistics Norway (SSB). As one of the few countries offering this, a national and non-commercial bibliographical database named the 'Current Research Information System in Norway' (CRISTIN) is publicly available for recording scholarly and peerreviewed literature. The individual researchers are supposed to report their publications, and data from CRISTIN are used as background material for assigning performance-based funding to the universities. According to the Norwegian Publication Indicator, publication points are separated at level 1 (lowest level) and level 2. The split of publication channels into two levels is due to peer reviews from academic associations, and the ratings of the different scientific journals and publishers are published on the webpage from NSD.

#### *Sweden*

Evaluation activities in Swedish higher education are performed at the national level, HEI level and by individuals. Starting with education, like in the other countries, a national system of evaluation has been in place since the 1990s, as part of the NPM-inspired reforms in the early 1990s. The first system can be described as a light-touch system, and it provided evaluations of each institution's quality assurance system. These so-called institutional audits were undertaken during two rounds, with small adjustments. The system that followed (2001–2006) included an emphasis on subject and programme reviews across the system. All subjects and programmes leading to a degree were included. Since the 1990s, accreditation of programmes, scientific areas and HEIs has also been implemented, as well as thematic evaluations. The emphasis has shifted over the years; currently, there is again more focus on institutional audits.

Evaluation of research has been the responsibility of several actors. Through the Swedish Research Council, the state has initiated comprehensive subject evaluations. All the funding bodies evaluate the research that is being funded. There has been a development from only ex ante assessments of proposals to mid-term and final evaluations of funded projects and programmes. Many HEIs have also initiated independent evaluations of research. They follow a similar basic model, including panels, bibliometrics, self-evaluations and site visits, with a slight variation regarding scope and emphasis (Geschwind 2017).

# Performance Measurement and Management

As is the case with evaluation, performance measurement and management can be understood as instruments for exercising accountability. In the context of higher education, performance can refer to all actions, tasks and processes carried out in HEIs (teaching, research, and third mission activities), as well as outputs and outcomes resulting from these actions. Given this high level of ambiguity, what is meant by performance is very much subject to different conceptions and definitions.

To determine its level (good vs. bad, low vs. high), performance needs to be measured somehow. As an activity, measurement requires objective 'measures' that can be utilised in the process of measurement to determine the performance (cf. Neely et al. 1995). In this sense, the selection of measures and the way in which they are utilised (weighting, measurement methodology, etc.) defines what is, at any point in time, considered performance. Thus, performance measurement is an evaluative act of quantification (of performance). By nature, performance measurement is always instrumental, as it is done for a certain purpose, whether symbolic or real. These purposes are often related to management and manifested around a set of instruments, such as 'management by objectives', 'total quality management', 'knowledge management', or 'strategic management', aimed at achieving organisational goals. Thus, performance management in higher education can be defined as an activity where universities use the information acquired through performance measurement to achieve and demonstrate progress towards a predetermined set of goals (e.g. Wholey 1999).

Performance measurement, however, is not only a tool to verify accountability; it is also a means of directing organisational attention and focus. This is done by translating the institutional strategy into a set of goals reflected in performance measures that make success (and failure) more concrete for everyone (Melnyk et al. 2004; Vasikainen 2014). The goal of this approach to management is shifting focus from input and focussing on bureaucratic rules and procedures, to the output with goal setting and use of performance information, where public organisations also focus on economic performance (Christensen et al. 2007; Hvidman and Andersen 2013). These techniques tend to be cyclical, incorporating the formulation of objectives, performance, evaluations and adjustments, and this information is used to make managerial decisions.

There is a generic assumption that 'management is management' (Hvidman and Andersen 2013, 37) and the same managerial techniques can be applied in both the private and public sector. Considering this, three organisational characteristics that differ between public and private organisations may theoretically mitigate the effectiveness of performance management in the sectors as follows: incentives, capacity and clarity. For incentives, managers in the public sector are presumably motivated less by pay and other financial incentives than managers in the private sector are, and they are steered by a public service motivation, where the value of doing something of importance for society is a personal incentive. Regarding capacity, public managers often have lower autonomy and higher levels of bureaucracy, and this affects their capacity to take advantage of the collected information, which can be used for decision-making. The clarity of goals is also more problematic in public organisations, as there are many stakeholders, multiple goals and different expectations of political responsiveness and social equity (see Boyne 2002).

Often, performance management is utilised simultaneously with performance-based funding, where funds are allocated by a formula or algorithm for achieving certain predefined measures of performance. In a higher education context, most of the performance indicators measure progression or completion of final outputs related to teaching and research, such as study credits, number of degrees awarded, publications, competitive research funding awarded, citations, patents, level of competitive/external research funding, or student satisfaction (Kivistö and Kohtamäki 2016). Performance-based funding is believed to incentivise institutions to improve or maintain their level of performance in exchange for higher revenue (Dougherty and Reddy 2011). By reformulating incentives so that institutions are rewarded or punished primarily according to actual performance, performance-based funding mechanisms stimulate a shift in institutional behaviour towards greater efficiency. However, whether this is accomplished in real terms is another matter (Kivistö and Kohtamäki 2016; Kivistö et al. 2017; Rutherford and Rabovsky 2014).

Performance management and performance-based funding are often associated with the use of performance contracts/agreements, both at the system level and in institution internal arrangements. Performance agreements are contracts (see Gornitzka et al. 2004) between the government and individual HEIs, which set out specific goals that institutions will seek to achieve in a given period. They specify intentions to accomplish given targets, measured against pre-set known standards (Claeys-Kulik and Estermann 2015; de Boer et al. 2015). Furthermore, performance management increasingly takes place at the level of the individual academics (Andersen and Pallesen 2008; Kivistö et al. 2017). This is especially the case when it comes to research performance, where measurement by publication points has become common place in Nordic countries, especially Norway, Denmark and Finland (see, e.g. Aagaard et al. 2015; Pölönen 2015). In some institutional contexts, direct financial rewards could even be allocated to individual academics for research achievements, for instance, in the form of publications in high-status journals (Opstrup 2014). These rewards can be paid as one-time bonuses, top ups of salaries and/or a maximum percentage of the individual's total salary (Arnhold et al. 2018).

#### *Contextualising Performance Measurement and Management in Nordic Countries*

#### *Denmark*

Performance measurement and performance management have been increasingly important principles in higher education governance in Denmark for more than 30 years. However, performance management has been criticised for encouraging production of quantity at the expense of quality. This criticism has recently been followed by a political request to incorporate quality criteria in the performance management approaches.

In the 1980s, performance management was introduced in educational funding. In today's funding system, educational programmes are funded solely according to a performance principle. Funding is based on the number of students passing exams, as well as on bonuses given if students accomplish their studies in due time. The system is based on a real-time principle implying that the universities do not know the exact amount of resources available for education in a given year until the autumn of the same year. The real-time principle can be said to have been an advantage for the universities in a period with considerable growth in student numbers, but uncertainty about budgets due to variations in student practice have posed challenges for the institutions. Recently, it has been decided to further develop the funding system, including employability criteria and quality aspects that are probably linked to student assessments. Over the years, the performance-based funding formula has thus become increasingly complex and still more tightly politically governed. Since 2009, an increasing part of the funding for basic research, currently amounting to 20%, has been performance based. The formula includes the number of graduates from master's and PhD programmes, the ability to attract external funding and the counting of publications. A quality aspect is included in counting publications, as publication channels are divided into two groups, one releasing more points and resources than the other.

Funding from the Ministry of Higher Education and Science is given to the institutions as a lump sum, meaning that the universities decide how to distribute the resources between faculties and departments. In relation to education, the performance-based principle is typically implemented all the way down in the hierarchy, whereas there are only a few examples of this in relation to funding for basic research. Universities also negotiate performance contracts with their parent Ministry. Hitherto, contracts have not been related to funding allocations, but the institutions must document goal attainment. Recently, it was decided to link goal attainment to funding from 2019. In Denmark, salaries are only marginally linked to performance, although this aspect is increasingly gaining importance.

#### *Finland*

In Finland, performance measurement and performance management have been guiding principles in higher education governance, both at the system and institutional levels, for over 20 years. Originally, performance management and measurement landed in the university sector within the general reform of state administration, which, to a large extent, was implemented following the ideals derived from NPM. Today, even after the reform of 2010, which made universities legally independent from the state hierarchy, the university sector can be considered one of the administrative sectors governed/financed by the state where the ideals of NPM are most comprehensively applied (see e.g. Kauko and Diogo 2011; Salminen 2003). Some of the recent empirical studies have also proven the effectiveness of using performance-based funding in the increasing performance of Finnish universities (see Seuri and Vartiainen 2018).

Although the execution of performance management on behalf of the Finnish Ministry of Education and Culture has been highly structured, its further application in individual universities in their internal management and strategies is not controlled by the Ministry. In fact, individual universities, and in many cases their subunits, like faculties, have developed their own internal variations of performance management (Kallio and Kallio 2014). The extensiveness of performance-based funding is mostly visible in allocation practices in providing resources to universities, in professionalisation of academic and administrative management positions, in the use of contractual arrangements (performance agreements), and in outsourcing and centralisation of support and administrative services in universities. Furthermore, as in many other European countries, old and new trends related to management, such as strategic management, quality management and knowledge management, have also been applied in universities.

One important aspect of performance measurement is the salary system for university personnel. Since 2008, the salary system of universities, comprising both academic and administrative staff, has been based on performance measurement, where a maximum of around one-third of the salary is performance based. Although the salary or other performance-based financial incentives have not proven to be the main motivation for Finnish academics to work harder (see Kivistö et al. 2017), they are applied as means of translating system- and institutional-level incentives to the individual level, thereby drawing attention to what is considered valuable (and what is not).

### *Norway*

The funding system for HEI in Norway provides a more stable budget than that in the Danish system, as 70% of the funding is allocated as block grants. Still, the 30% of performance-based indicators increasingly function as a policy tool used to stimulate improvement in both teaching and research, as well as managerial tools in the institutions. Teaching indicators constitute the largest share (24%), focussing on throughput of students and internalisation. As for research indicators (the remaining 6%), these are related to the throughput of PhD students, external funding of research (e.g. from the EU and the Norwegian Research Council), and finally from the metrics related to publications. The Norwegian Publication Indicator as a measurement system was introduced in 2004. As a policy and performance management tool, such indicators from research are meant to stimulate excellence and productivity, as well as to increase the accountability of public research. Another important aspect is aligning research to societal and economic needs (Aagaard et al. 2015). Despite the broad objectives, the financial role of the indicator is marginal, as it only distributes 2% of the funding to the sector (Aagaard et al. 2015).

This funding system based on metrics and a market model has, on the one hand, increased the autonomy in the universities, as the boards are responsible for prioritising within the allocated financial frames and aligning their activities to meet the goals for the sector. On the other hand, ex post control has increased, and the contractual relationship between universities and the state based on performance metrics is replacing the trustbased foundational pact (Stensaker 2014). The increased autonomy is counteracted by controlling instruments, reporting systems and the financial incentive systems following students and research activities (Christensen 2011). The individual academics are still autonomous regarding teaching and research, but the autonomy is limited or steered by incentive and reporting systems; this can feel like a decrease in professional autonomy (Christensen 2011).

#### *Sweden*

Generally, performance and performance measurement have become ever more important over time in Sweden as well. These phenomena have also increasingly 'trickled down' and been reflected across organisational levels. The developments of education and research described below have affected HEIs significantly, and various responses have emerged.

As mentioned above, one of the most dramatic changes in Swedish higher education was the introduction of performance-based funding in education, based on the inflow of students and throughput. The previous system was criticised for being too rigid, based on central planning, and not driving quality enough. The latter argument has also been used against the current system. Since funding is so closely related to student success, there have been discussions about decreased demands for passing students. The system is based on the idea that different educational areas bear different costs. A student in the Humanities is supposed to cost far less than an Engineering student, for instance. Another effect of this system has been an increased marketing activity by HEIs. An important aspect of the system is the use of a 'ceiling' for the number of students recruited. Allocation of funds has a limit and it is linked to a maximum number of students. Throughput of students has been a controversial quality indicator. Whereas there have been occasional discussions on the risk of lowering demands on students, there are also examples where student throughput has been linked to incentives. Overall, this has not affected the individual academics but rather organisational units and HEIs.

In research, the traditional model was block funding based on historical principles rather than performance. Direct state funding was the bulk of the total funding for research. Lately, there has been a development towards more competitive external funding than direct state funding, and as of 2018, the external funding made up slightly more than half of the total funding. A milestone in Swedish research policy was the introduction of performance-based funding as part of the direct state funding. Since the introduction in 2009, 10–20% of the total funding has been allocated to HEIs based on performance as shown in publications and external funding.

# Converging Higher Education Policies

Organisational fields with their specific institutions, such as universities, have similarities in organisational design and activities all over the world. In many countries, universities have experienced a shift towards 'academic capitalism' (Slaughter and Leslie 1999) and operate as 'entrepreneurial universities' (Clark 1998; Etzkowitz et al. 2008). Rationalisation of the universities as organisational actors by the introduction of more formal structure, in terms of introducing a stronger emphasis on quality assurance, evaluation, accountability measures and incentive systems, can be considered a transnational process linked to the NPM type of governance reforms (Ramirez and Christensen 2013; Seeber et al. 2015). The social mechanisms of spreading the ideas of rationalisation can be highlighted from the perspective of institutional isomorphism (DiMaggio and Powell 1983). The literature on isomorphism concentrates on the increasing similarity of organisational and institutional structures and cultures, whereas studies on policy convergence focus on changes in national policy characteristics. Policy convergence, that is, the development of similar or identical policies across countries over time (Knill 2005), seems to be especially evident in Nordic countries, which show similar types of policy development in many significant areas of higher education policy, predominantly those related to governance.

One of the most important reasons behind policy convergence, although not the only one, is international policy promotion, where an actor with expertise in a policy field promotes certain policies. International (or supranational) organisations specialised in a certain policy field are the main actors for inducing the convergence of policies by actively promoting certain policies and defining objectives and standards in an international setting. Countries diverging from the promoted policy models may feel pressure to comply with the policies (Holzinger and Knill 2005; Knill 2005).

There are two overarching international political processes relating to higher education in Europe, which presumably have a significant effect on policy convergence, as follows: the higher education 'Modernisation Agenda' (European Commission 2006, 2011) promoted under the auspices of the EU institutions (especially the European Commission) and the intergovernmental Bologna Process (Moisio 2014). Many NPM ideals implemented in Nordic universities, such as promoting the accountability and autonomy of higher education institutions and improving the governance, funding, quality and relevance of higher education, are directly in line with the Commission's Modernisation Agenda. Interestingly, the Modernisation Agenda presents chiefly the American higher education system and universities as one of the important points of comparison in developing European higher education (see also Slaughter and Cantwell 2012; Slaughter and Taylor 2016).

The Bologna Process seems to increase policy convergence at the European level, although the research evidence for this is not yet entirely clear (see, e.g. Witte 2008). However, Voegtle et al. (2011) have found that the higher education policies of the Bologna participants converge more strongly and that the Bologna Process has made a crucial difference in increasing the similarity of higher education policies. Especially in the area of quality assurance, most Bologna countries implemented most of the measures and included all the required actors for quality assurance measures according to Bologna standards by 2008 (Voegtle et al. 2011).

International/intergovernmental organisations, such as the OECD, World Bank and UNESCO, are highly influential actors in higher education policy convergence (see, e.g. Shahjahan 2012; Shahjahan and Madden 2015). At the European and Nordic level, most notably, the OECD has had a high level of influence on policy convergence. Nation states, including Nordic countries, often rely on the OECD to provide them with the latest data on trends, current issues and policy options. The OECD uses conferences, trend and review reports and the mediation of policy language to influence the thinking of national-level policymakers within and outside of its member countries (Shahjahan and Madden 2015). For instance, the OECD's thematic reviews can provide a strong legitimisation or justification to national governments for initiating policy reforms, as has happened in Finland (Kallo 2009).