Working at a large government training provider; one would immediately identify a bureaucratic organisation. The first distinction identifies an equal number of public servants as academic staff; the second would be the organisational structure including a governing council, numerous committees with five divisions across six campuses. Ultimately, the frontline services of academic staff actually derive income for the organisation whilst public servants may be viewed as a cost to the organisation; mostly generating no revenue for the organisation.
Moving to an operational level, training delivery is organised in strategic business units (portfolio teams) that operate with a high degree of autonomy. The portfolio teams are very functional in nature, able to quickly respond to the external environment with little input from the formal management. The teams are internally managed in regards to budgets, staffing, rostering and industry liaison. The success of the individual strategic portfolios does not impede the strategic direction of the college.
Furthermore, the divisional directors have a purely strategic role taking a very hands off approach to management issues. As such, the divisional directors do not deal at an operational level taking a more financial role in the organisation. A successful strategic portfolio generally funds the less successful strategic portfolio units in the divisional directors division as money is shuffled around.
A successful strategic portfolio unit loses all of its revenue to a struggling portfolio area. This has a negative effect on the successful portfolio as it loses most opportunities to invest in further growth impeding a sustained income stream over various economic cycles. The greatest motivation for frontline staff is they are generating income for the division; the divisional director does not interfere in a successful strategic business unit for fear of destroying the value the portfolio generates.
The less successful strategic portfolio unit may be unsuccessful for a number of reasons such as it may be part of a declining industry. But the portfolio may also be poorly managed in regards to student contact hours, class sizes, teaching aids, staff development or staff motivation. In such a case, the unsuccessful strategic business unit is rewarded to the detriment of the successful strategic business unit. In terms of pay levels in such a large organisation, the unsuccessful business unit may have the majority of its staff on higher pay levels than the staff of the successful business unit.
The long term effects of a successful strategic business unit propping up an unsuccessful business unit decreases motivation in both business units. The successful business unit sees no advantage to operational efficiencies resulting a decline in innovation, efficiencies and motivation. The question always asked is “why should we work harder when we seen no benefit for our effort?”
Furthermore, the inefficient portfolio is not under pressure to improve internal efficiencies, further develop their markets or increase motivation as the staff are aware that mediocrity is rewarded. The strategic portfolios then have to rely only on the professionalism of both teams for long term success as other forms of motivation now have little effect.
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