Business Ethics Symposium

DRAFT, CHECK AGAINST DELIVERY

Divine Word University, Madang, 7 September 2012
12th Annual Business Ethics Symposium
Ethics in the developing of PNG through the power of positive vision

Ethical considerations in the accomplishment of Papua New Guinea's Vision 2050:
the role of universities
Dr. Albert Schram
Vice-Chancellor
Papua New Guinea University of Technology

INTRODUCTION

Since starting my PhD in 1990, I have been interested in the contribution to long-run national development large, technology-driven, multi-national companies. Historically, the activities of multi-national companies have contributed to development, while at the same time causing numerous conflicts, sometimes leading to their nationalisation (e.g. Zimbabwe) or to civil war (Guatemala, Colombia). The themes the ethical consistency of the behaviour of companies, and the moral integrity of individuals constantly came up in the public debates around these companies.

Today, I will reflect on:
1- the role of trust and reputation in a market economy including Corporate Social Responsibility and business ethics,
2- ethical consistency of organisations and individual moral integrity, and
3- how universities play a role in shaping both.
  While addressing these themes, I will reflect on the ethical dimensions of Papua New Guinea's national development strategy Vision 2050 from a organisational, individual and a university point of view.

At this conference, I am glad to have the opportunity to address these issues in a more systematic manner. My interest in ethical dimensions of national development has so far been indirect and dispersed, though my recent experience as vice-chancellor of UNITECH has given me new food for thought. 

Since 2008, as adjunct professor I taught the course on corporate social responsibility CSR at the University of Turabo, an AACSB accredited business school in Puerto Rico USA. Companies develop a CSR program to address wide-range of institutional pressures from diverse stakeholders, which consists of a series of corporate environmental, social and governance activities (ESG). In my courses, I would focus on the environmental management dimension, and leave social and governance activities aside. I realised however that companies performing well in the environmental dimension, would also have some special characteristics in social and governance aspects, often fed by deeply held beliefs and values.

In 2009, I had the opportunity to perform a policy review on CSR research for the European Commission, which was published on-line (Schram 2009). More recently, I started research with Prof. Ton Otto at the Cairns Institute on the impact on values and beliefs of the national cell phone network in Papua New Guinea. In academia our work as educators of young adults is deeply ethical. As Faculty members, we are deeply involved in shaping the values and behaviour or our students. Private, faith based universities like DWU and PAU do this explicitly. State universities implicitly try to instill a certain "ethos" among students by promoting codes of conduct, and rewarding positive and punishing negative behaviour. As university executives, we are constantly modifying, shaping creating norms and strengthening value systems of our Faculty members, professional staff, and students. 

I hope my words today can contribute to the conference by clarifying some concepts, examining Vision 2050 from a higher education perspective, and reflecting on the role of universities in forming the two main driving forces contributing to creating the necessary trust-based institutions for national development:
a- individuals who behave with moral integrity, and
b- organisations which act in an ethically consistent manner. 

The aspirations and wishes of Papua New Guineans have been codified in Vision 2050. You all have read and heard a lot about Vision 2050. I will not extensively analyse this document, but limit myself to a few remarks.

First, we can define Vision 2050 by what it is not. It is not a blueprint for a sustainable development or a green economy, but realistically gives a prominent place in national development to inherently unsustainable activities - such as mining - or environmentally damaging activities such as logging. We can deplore this, but in my view too much idealism would risk losing touch with PNG reality. A vision rooted in reality is what will get things changing for the better. 

Secondly, Vision 2050 is not a blueprint knowledge economy. Knowledge intensive sectors can not by themselves create the necessary jobs to assimilate all the young people coming on the labour market. 

Thirdly, although human capital development is the first of the 7 pillars, Vision 2050 is not a comprehensive educational policy, or any other policy for that matter. For higher education it established some indicative targets for the quantity of graduates, but it stops at that. 

Fourthly, I wish to outline the importance of targets: first regarding the 8 Millennium Development Goals (MDG) by 2015 and second concerning the Human Development Index (HDI) ranking by 2050. PNG has committed itself to achieving the MDG by 2015. Currently, with the support of UNDP it is establishing a framework to accelerate progress towards these goals. UNITECH has been established as a center of excellence for MDG in PNG. The mapping of development gaps currently undertaken, will allow more targeted investments to take place. 

In 2050, PNG aspires to be in the top 50 in the global HDI ranking. Since HDI is a mixture of economic, health and education indicators, and given the current state of the health and education system, substantial investment in infrastructure, health and education systems must be made now, in order to produce results in 10 or 20 years. In the 1950s, countries devastated by war, like Korea, or with an extremely non-diversified and vulnerable economy like Costa Rica, have smartly and massively invested in building up their infrastructure, health and education systems.

The case of Costa Rica - a country of about 4M inhabitants in Central America north of Panama - in my view is relevant for PNG, since this country's indigenous cultures and nature have so many similarities with PNG. Costa Rica is the only country in Latin America which has held regular elections since 1948. Admittedly, Costa Rica has failed to invest enough in its road infrastructure, which just as in PNG is very pricy with high tropical rainfall. It did invest, however, in tapping its potential for hydro-electricity, setting up a network of village schools in the 1960s, and a national health system including village clinics. It has a highly educated population with literacy rates of 99% and a life expectancy of 78 higher than many European countries. Currently, it is a middle income country with a substantial middle-class, a high ranking in the HDI, and on the happiness ranking. It is close to being a smart, wise, happy and fair society, which PNG aspires to become. 

The example of Costa Rica shows that investments in human capital pay off in the long-run, although it may take two or more decades. Only education will teach people moral integrity, and defend their values which drive their behaviour. Only with individuals with moral integrity and strong personal brands can build up resilient and effective organisations, which act in an ethically consist manner in carrying out their missions.

1- THE ROLE OF TRUST AND ETHICS IN DEVELOPMENT Let's first establish the important role of trust for the functioning of institutions in society, and any market transaction.   Amongst the necessary conditions for adequate functioning of institutions in developing countries are, on the one hand "hard" conditions regarding the legal system, and on the other hand "soft" conditions concerning business and personal ethics and trust. An "institution" is a system of well-established and prevalent social rules. Formal institutions are rule based organisations, where the rules are enforced by the state. Markets are the most important institutions for development, because it is on well functioning markets for land, commodities, products, and labour, that economic growth critically depends. 

Amartya Sen in "Development as Freedom" (1999) has emphasised the importance of trusting and trustworthy behaviour, and the upkeep of ethical norms as one conditions for a functioning market economy: "The development and use of trust in one another's words and promises can be a very important ingredient of market success" (Sen 1999). Interestingly, he bases this insight both on Adam Smith's Theory of Moral Sentiments (1759), and An Inquiry into the Nature and Causes of the Wealth of Nations (1776). Sen points out that Adam Smith has often been misinterpreted as saying that unfettered markets will achieve socially optimal results. Concerning the "soft" conditions for market success, Sen's (1999) maintains that Smith never said markets would take care of themselves, or that the state does not have a crucial role in creating the conditions for efficient markets. Similarly, Sen interprets Adam Smith's remarks on the 'invisible hand' as an unintended consequence of production and consumption, rather than as a fundamental premise for properly functioning markets. According to Sen, the invisible hand argument does nothing to diminish the importance of the underlying trust relationships (Sen 1999, 150). 

In Sen's view, Smith's assertion that "It is not from the benevolence of the butcher the brewer, or the baker that we expect our dinner, but from their regard to their own interest", can not be separated from Smith's discussion on the role of contracts, proper administration of justice, business ethics, or on trusting and trustworthy behaviour.   Another development economist at the other end of the political spectrum, Hernando de Soto describes development essentially as the replacement of informal and family or clan based institutions by formal constructs. He remarks, for example, there is no lack of entrepreneurship in the developing world, but due to informality it does not produce wealth on a large scale because of lack of formal market institutions (De Soto 2003). This idea goes back to Gunar Myrdal (1968) who described the difficulty of extending trust outside the circle of the family or clan, and vaguely echoes Smith's "circles of sympathy" in the Theory of Moral Sentiments (Myrdal 1968). 

By contrast Elinor Ostrom - Nobel prize economics 2009, who sadly passed away on 12 June this year - points out the success of informal institutions dealing with natural resources (Ostrom 1990). Another neo-institutional economist and economic historian, Douglas North, - Nobel prize economics 1993 - who did much to open economists' eyes again to the role of institutions wrote: "The inability of societies to develop effective, low-cost enforcement of contracts is the most important source of both historical stagnation and contemporary underdevelopment in the Third World" (North 1990). 

Cultural economists have written about low or high trust societies (Fukuyama 1995), or the major difficulty of collectivist societies to establish trusting relationships transcending the individual or the tribal (G. Hofstede and Hofstede 2005). One weakness of cultural economists is that their level of generalisation is too high to promote proper understanding of particular phenomena, and that they see cultural as something immutable, while it is clear a moving target. In particular, in multi-cultural societies like PNG, the concept culture is hard to define, and extremely moldable and changing. 

Although none of the PNG cultures produced writing, because there was no need for it, their underlying values are deeply rooted in an oral tradition and traditions. As Jared Diamond has argued convincingly, the invention of agriculture in PNG over 40.000 years ago, promoted a transition from hunter gather societies to agricultural, sedentary societies. The low-productivity type of agricultural systems, however, pre-cluded in most cases the formation of larger political units or chiefdom (Diamond 1999). Every member of the tribe had to work too hard to produce sufficient food for groups of specialists such as artisans and chiefs to be formed. The existence of culturally rooted systems of promoting and maintaining peace and trust within and among different tribes, can be assumed since trade networks were extensive, both in the highlands and in coastal areas. 

To sum up, all authors agree trust and ethics is necessary for development. The answer is in my view that companies, or organization, must behave in a ethically consistent manner, and individuals must build their reputation or brand on moral integrity. Companies, for example, that proclaim to serve the interest of a set of local landowners, can not at the same time poison their land, or destroy their forests. Individuals claiming to lead Christian life and "love their enemies", for instance, can not be engaged in aggressively attacking their adversaries at every turn. Now what can organisations and individuals do to promote trust through ethical behaviour?

2- THE ETHICAL CONSISTENCY OF ORGANISATIONS AND THE MORAL INTEGRITY OF INDIVIDUALS

A- ORGANISATIONS
Organizations' actions should be consistent with their self-proclaimed values. When developing their strategy, organisations are supposed to state their long-term vision, their mission, and their values. In practice however organizations do not exhibit these values trying to achieve their vision by executing their mission. For example, different people in the organisation, are responsible for environmental and general management. What trust is build up by one section, can be destroyed by the actions of another section. Organisations get away with this usually, when it does not affect the trust necessary for doing business. The role of local and international NGO's in denouncing this kind of behaviour has however increased business risk from inconsistent application of business ethics.

In response to pressures from stakeholders, companies engage voluntarily in CSR activities. They perceive that doing good and doing well don't clash. They do this for many different reasons, but in general they seek a broader social license to operate. Companies, like Digicel, for example, engage in corporate philanthropy in order to enhance the cooperation of those communities that are necessary for their operations. Conventionally, five types of corporate engagement are distinguished: governance, philanthropy, CSR, social entrepreneurship and global citizenship.

The case for CSR as an independent domain is based on two fundamental premises discussed in business ethics literature related to the role of business in society. First, the implicit social contract between the company and stakeholders in the organization (employees, shareholders, customers, and suppliers), the community, state authorities, and the media, entails rights and obligations for all parties. When the company upholds its obligations of this social contract it maintains its permission to operate. The second premise is that the company is a moral agent. By its nature, the role of the company in society is an ethical question, where at the extremes some see corporations as the lackeys of society, while others don't accept any limitation to a corporation's freedom. Since corporations reflect and reinforce values, they inevitably act as moral agents and the case for complete freedom has hardly any basis (Wartick and Cochran 1985).

There is lack of a clear definition of CSR, however, since it has been used to designate a wide range of corporate "do-good" activities. By its nature, CSR is an essentially contested concept and internally complex. Its scope is unclear: where does the responsibility of the company end, and that of the state begin? Due to these conceptual problems, companies have started to speak about Environmental, Social and Governance (ESG) Activities, which bypasses the tricky question of "responsibility".

The intellectual debate on CSR has been won, and it is now a main stream subject. The vision that the "only business of business is business" is therefore has never been, and is not part of mainstream thinking in economics (Friedman 1970). Implicitly accepting the premises underlying CSR, in the economics literature the conflicts between business and society are seen as originating principally from an externality problem (Crouch 2006). CSR issues arise when a company imposes costs on society which are not compensated financially - or so-called externalities -, or when costs or benefits of its activities are perceived to be unfairly distributed among the company's stakeholders. In the realistic case, when government has not resolved the externality issues and ensuing conflicts, there is a case for CSR to be made (Heal 2005).

What guidance can companies who wish to engage in CSR obtain? The International Standards Organisations has developed as set of standards to guide organisations (not just companies) in their CSR activities. The ISO14.000 series of standards regard environmental management systems, and are quite well known. Since they were first published 1996 over 150.000 organizations have received a certificate (ISO International Standards Organization 2008).

The ISO26.000 series of standards published in 2009 similarly guide organizations in their broader social responsibility activities. The standard distinguishes 7 key areas: human rights, labour practices, fair operating practices, consumer issues, the environment, community development and involvement, and organizational governance.

ISO26.000 describes seven social responsibility principles (Ch. 4)
1. Accountability
2. Transparency
3. Ethical behavior
4. Respecting stakeholders expectations
5. Compliance
6. Respecting international norms
7. Respecting Human Rights

For each of these principles, ISO26.000 provides guidance on how to implement them in an organisation.

In contrast to ISO9.000 (quality) and ISO14.000 (environmental management) ISO26.000 is a guidance document and not intended as a standard. Consequently compliance with ISO26.000 is not open to third party certification. Nevertheless, it will probably have substantial impact on promoting a common terminology in this wide field, emphasizing performance results and improving consistency with other social responsibility standards.

In sum, the idea that a company has stakeholders in addition to shareholders, and that a company is a moral agent is firmly established, and widely recognized. A company must do good - have a social license to operate - in order to do well. The libertarian fringe may still argue against it, but the debate on CSR has essentially been won. The ISO14.000 and ISO26.000 standard shows that a universal agreement on what social responsibility means for an organization is possibly, independent of context of culture. Compliance with these standards is the most convincing way of demonstrating an organisation's ethical consistency.

b- INDIVIDUAL
Before examining individual moral integrity, lets first focus on the domain of the non-ethical. Corruption according to a well known definition is the abuse of public office for private benefit (see for example World Bank). Only the perception of corruption can be measured, however, and this is much higher in low-income countries than in high-income countries. This index may in fact not be valid at all. In high-income countries, corruption is much more hidden and seldom involves cash transfers: access to old boys networks, sharing insider knowledge, and extending mutual favours go a long way in masking conflict of interest situations. In low-income countries, however, corruption is clearly an issue, and the complaints are numerous.

The literature on corruption reaches wide and far back in time. The first political scientist, Nicolo Machiavelli, likened corruption to a disease: easy to cure in the initial stages but much harder when it has progressed {Machiavelli, ##, p. ##}. The disease is lethal, and corruption literally means to utterly destroy. Some modern economists have developed a more positive view of the role of corruption in society. Taking a marginalist approach to corruption, defining a little corruption as lubricating oil to keep the wheels of government moving, while to much of it becomes sand. Both these similes - corruption as a disease and as lubricating oil - are dangerous, because corruption as a disease or as a substance, seems to suggest nobody is individually responsible for acts of corruption. This clearly not the case, which open the question whether individual moral integrity can diminish the scourge of corruption.

Now let's turn, to individual moral integrity. An ethical value help determine to describe the value of different actions. It deals with right conduct, and good versus bad. At times, for me it is disconcerting how easily people shift from one set of values to another one. Some people seem to have a multiple personality disorder: they are Christian on Sunday, business men on Monday, opportunitist on Tuesday, tribal warrior on Wednesday etc. At the same time, these same people will loudly profess how virtuous they are. These individuals have no concern for their reputation. They find that to talk the walk, is easier than walk the walk, and they are content with that. While these individuals juggle mutually exclusive value systems, they are still responsible the consequences of all their actions.

For young adults starting their professional careers it is important to reflect on the brand named "you". First of all, in order to define your brand, you need to know your own personality. For this purpose, you can do different type of personality tests, such as Myers-Briggs or others. Secondly, you need to ask yourself, what are the key values that drive your behaviour? Your brand is your promise to others, and when it is based on your core value it is much easier to maintain this promise. The more reliable your promise the stronger your personal brand. You will acquire a reputation for trustworthiness, and people will be eager to engage with you since they know what to expect. Thirdly, you need to package your brand nicely, so that people feel attracted to it. You can optimize your electronic presence, and develop your personal communication strategy. There are several web-sites and techniques that can help you to establish your brand, and I suggest you start working on it after this lecture.

In conclusion, professionals with moral integrity are necessary to accelerate progress achieving the Vision 2050 goals, and minimize the damage of corruption. The main task of our graduates is to create some order, and reduce the chaos and entropy in PNG public and private organisations, which favours the activities of those individuals who want to steal public resources or abuse their office for private gain.

3- THE ROLE OF UNIVERSITIES
The primary responsibility of universities is to produce enough, employable graduates. The social responsibility of the university is to instill in these graduates a set of coherent values, which drive their professional and personal behaviour. Indirect social responsibility can consist of contributing to job creation, generate the technology for a more sustainable or green economy, or solving social problems through community work.

While UNITECH needs to spend K24.000 to educate one undergraduate, it is only given K12.000. We strongly urge the government therefore to give UNITECH the resources needed to do the job. We are trying to improve governance and accountability. We want to increase revenue from our own assets, but we find we are limited in doing this by a series of legal constraints. The state needs to commit to higher education, and establish a target, say 6% of GDP for education, of which 2% earmarked for universities.

Traditionally, universities have somewhat neglected their social responsibility, or at best have not been very good at it. In the USA, for instance, in the post-Enron days, ethics teaching in business schools became more prominent, but the effectiveness in obtaining the desired outcomes in term of attitudes has been questioned. As I argued earlier, the role of universities in addressing societal problems is often indirect, but therefore far from negligible.

Universities in PNG have a long history of student unrest, and staff discontent. Students can only expected to live up to their promises, if the universities they attend live up to theirs. Quality is doing what you say you are doing. Too many legitimate expectations are crushed by the reality of structural underfunding, lack of infrastructure and staff. All university administration in the country are working hard to address these issues.

In sum, sufficiently funded Universities can and do address the moral integrity of their graduates, by delivering a high quality, outcome or competence based curriculum in which not only knowledge and skills are address but also the required attitude and therefore values. Faith-based universities can teach us how to build up these values in our graduates, by addressing them explicitly, rather than implicitly.

FINAL REMARKS
In this paper, we discussed three themes:
1- the role of trust and reputation in a market economy including Corporate Social Responsibility and business ethics,
2- ethical consistency of organizations, and individual moral integrity, and
3- how universities play a role in shaping both.
We hope to have shown the audience how individual moral integrity, ethical consistency of organisations and institutions, and national development are strongly intertwined.

Educated individuals with moral integrity can and will contribute to building up institutions which are ethically consistent, and thus contribute to achieving the goals of Vision 2050. The lack of value consistency in organisation, and absence of moral integrity in the individuals that make up these organization, will eventually lead to a complete breakdown of trust. In turn, this will destroy the institutions necessary for achieving the developmental goals of Vision 2050.

When universities will be given the necessary funds to start doing what they promise, graduates will respond, and live up to their personal and professional promises by exhibiting behaviour which is based on moral integrity and enhances their personal brand. At UNITECH, we are developing a student ethos which we call the UNITECH way. With our staff we are stimulating behaviour that is based on key values of efficiency and effectiveness, moral integrity and honesty, and learning and continuous improvement.

In these 8 months in PNG I have seen how well Papua New Guineans respond to these moral challenges, embrace positive change, and show tremendous capacity to learn and improve. In my short time here, I have met so many individual wonderful Papua New Guineans with a great capacity for team work. I am truly confident that progress towards the goals of Vision 2050 in the coming years will be much faster than in the years before.

References
Crouch, Colin. 2006. Modelling the Firm in Its Market and Organizational Environment: Methodologies for Studying Corporate Social Responsibility. Brussels: EABIS.
Diamond, Jared M. 1999. Guns, Germs and Steel: The Fates of Human Societies. W.W. Norton & Co.
Friedman, Milton. 1970. "The Social Responsibility of Business Is to Increase Its Profits." The New York Times Magazine. 13 September 1970: 32-33,122-126.
Fukuyama, Francis. 1995. Trust. The Social Virtues and the Creation of Prosperity. New York: Simon & Schuster.
Heal, Geoffrey. 2005. "Corporate Social Responsibility: An Economic and Financial Framework." The Geneva Papers 30: 387-409.
Hofstede, Geert, and Gert-Jan Hofstede. 2005. Culture and Organizations. Software of the Mind. Intercultural Cooperation and Its Importance for Survival. New York: McGraw Hill.
ISO International Standards Organization. 2008. The ISO Survey - 2007. Geneva: ISO. http://www.iso.org/iso/survey2007.pdf.
Myrdal, Gunnar. 1968. Asian Drama: An Enquiry into the Poverty of Nations. New York: Pantheon Books.
North, Douglas. 1990. Institutions, Institutional Change and Economic Performance. Cambridge: Cambridge University Press.
Ostrom, Elinor. 1990. Governing the Commons. The Evolution of Institutions for Collective Actions. Cambridge UK: Cambridge University Press.
Schram, Albert. 2009. "Policy Review of Corporate Social Responsibility Research in the 6th Framework Programme. European Commission DG Research". European Commission, DG Research.
Sen, Amartya. 1999. Development as Freedom. New York: Oxford University Press.
De Soto, Hernando. 2003. The Mystery of Capital Why Capitalism Triumphs in the West and Fails Everywhere Else. New York: Basic Books.
Wartick, Steven L., and Philip L. Cochran. 1985. "The Evaluation of the Corporate Social Performance Model." Academy of Management Review 10 (4): 758-769.

Speech on MDG's

Opening Speech

for the UNDP Millennium Development Goals Workshop

20-22 August, Papua New Guinea University of Technology UNITECH, Lae.

Dr. Albert Schram

Vice-Chancellor

UNITECH

Twitter: @albertschram

Dear students and alumni, honourable Minister, distinguished visitors, UNITECH faculty, professional staff, ladies and gentlemen,

I am honoured and excited today to welcome you at the opening the MDG workshop. I am delighted UNITECH is again host to an event where issues of national importance are addressed through collaboration of national academic and officials, with international experts. I would like to thank especially the UNDP, the major sponsor of this event.

In the coming days, you will deepen your understanding of the MDGs, and acquire some skills in the field of statistics. For this, you will be rewarded with a certificate of participation, if you manage to participate in a meaningful manner during the full 3 days of the course.

Now I would like to share some thoughts with you, not on the MDG but on development itself. These ideas are not new, but they may be somewhat controversial and thus stimulate meaningful interactions amongst yourselves and with your trainers.

As Stephen Covey wrote maybe "The way we see the problem is the problem".

Development

Let us define the main concepts. Economic growth is conventionally measure as yearly percentual growth in Gross Domestic Product of a country. GDP is the size of the economy as measured by the statistical offices following UN system of national accounts.

One of the main engines of economic growth is technological innovation which increases productivity of labour, land and other production factors. Another important engine for growth is international trade. Countries that grow rich through trade, follow a so-called export-led growth model.

Economic development is measured either by GDP per capita, or by a composite measure such as the Human Development Index, which includes mainly dimensions such as health and education. The MDG's reflect such a broader definition of development. For practical purposes, the economic growth and development measures are strongly correlated.

Official Development Aid

We all know that PNG is a developing country. We also know that PNG as a developing country, somehow, is entitled to development aid in a manner that an OECD country like Korea, for example, is not. This workshop is financed, for example, through development aid budget.

In order to pay development aid, rich countries set aside part of their budget for development aid. A number of like minded Northern European countries – the Netherlands and Scandinavian countries – have even pledged to set aside 0.7% of GDP for aid. The support for this level of spending, however, is quickly eroding, due to lack of results, and increasing fear of globalization in those countries. Due to economic growth of 9% and over, only China and India have made substantial progress towards achieving all MDG goals.

Apart from a small-minded debate on the legitimacy of this spending per se, there is a broader public debate on aid transparency, or how to ensure that other feedback loops can ensure a degree of necessary corrective steering, where normal democratic feedback can not. The aid budget, is one of the items of the national budget where the beneficiaries are not part of the electorate. Bill Easterly of New York University has tried to document the lack of transparency in development aid delivery. A major finding of this research is that multi-lateral aid delivered through the World Bank or the UNDP is quite transparent, but the bi-lateral agencies, with the exception of USAID and DFID, are doing much worse.

The second public debate about aid is the one about aid effectiveness. What percentage of aid actually reaches the intended recipients, or is it all boomeranged back to consultants and companies in the rich countries of origin?

Some authors, such as Oxford University's Peter Collier or Columbia University, Jeffrey Sachs believe that by tinkering with the delivery mechanisms of aid, aid effectiveness can be dramatically improved.
Others, such as Dambisa Moyo from Zambia (formerly World Bank economist, Morgan Stanley and now Barrick Gold) argue in her book "Dead Aid" that aid is part of the problem not the solution.
Despite almost 600M spend on aid to African countries since independence, for example, the typical African country today is no richer than 40 years ago. Most developing countries seem to have wasted the first 4 or 5 decades of independence, while receive huge amount of aid. Developing countries are not developing at all. Why is this?

There are several explanations, but one of them is Dutch disease. Large inflows of money into an economy – whether from aid or mining – encourage corruption and outright stealing, and through currency markets cause the national currency to appreciate, thereby making exports more expensive, or inhibiting the development of an export sector all together.

Countries rich in natural resources which fail to develop, such as Nigeria, suffer from what is called the natural resource curse. There is no limit to the damage bad policies and institutions can do, but lamentably there is a limit with what you can achieve with good policies and institutions. There is nothing inevitable, however, about Dutch disease or the natural resource curse. Through enlightened policies – such as by parking the money in sovereign wealth funds - the effects of aid or mining booms can be neutralized. In those cases, - notably some of the Gulf states - the financial resources can be put to good use, and can be invested in infrastructure, health and education.

Steps towards a brighter future

Development happens not through aid or mining booms, but through homegrown efforts of conventional or social entrepreneurs – who create jobs and mobilize communities -, and social and political reformers – who clamp down on stealing – and make sure resources are directed to infrastructure, health and education, and create effective mechanisms for service delivery.

The MDGs form a set of specific and internationally agreed specific, measurable, achievable, relevant, and time-bound SMART goals. They provide necessary focus, and invite cooperation and coordination between different public authorities and stimulate partnerships with private sector.

The challenge is now how to achieve the MDG's in PNG. I hope during this workshop you will find some answers to address this challenge. This week, international and national professionals are here to work with you, shoulder to shoulder, sharing knowledge and experience, not making you dependent but empowering you to lead.

All the trainers are  here to help, but will not stay forever. Take maximum advantage of their presence, and ask them lots of questions during the workshop, but also during the lunches and coffee breaks.
Part of the problem is defining the problem as one of not enough aid, while growing dependent on the resources and leadership of others. This is the wrong problem definition, and therefore not a basis fo a sustainable solution.

In the end, PNGeans themselves must determine their own development model, and direct their efforts towards achieving the MDGs by 2015, and the goals of Vision 2050.

Opening of Annual Certified Practicing Accountants National Conference

OFFICIAL OPENING SPEECH

by

Dr. Albert SchramVice Chancellor

Papua New Guinea University of Technology UNITECH

At the CPA Papua New Guinea Lae Annual Conference 2012

(Thursday, August 9^th – 10^th, 2012)

………………………………………………………………………………

Good morning, distinguished guests, speakers, ladies and gentlemen.

It gives me great pleasure to officiate and address the Certified Practicing Accountants Papua New Guinea (CPA PNG) Annual Conference 2012, here in my home town Lae, because I am convinced accounting professionals has much to contribute in society.

As Peter Drucker famously said: managing is doing things right, but leading is doing the right things.

Leadership is always about change, since change can not be managed but must be led. But a leader can not limit her or his actions to communicating a sense of direction just talking about the "vision thing". Leaders need to understand management as well.

A leader should make evidence-based decisions, under time pressure and information constraints. It is here in this crucial area of leadership, where the accounting profession makes a unique contribution by providing the organized information, that allows us to weigh costs and benefits of any decision more objectively. The better and broader the information base, the better decision will be taken.

But it does not stop there. Accountants contribute to solving the so-called "wicked problems" in society, which are problems that are difficult to solve because of their interdependencies with other problems. For decision-making about these problems – how to respond to climate change, health care, population growth – accounting professionals provide the facts, and convert them into valid and reliable information thus providing indispensable guidance for leaders.

UNITECH runs the oldest program in accounting in the country, and trains a large part of the accountants in PNG. As a stakeholder in your progress over the years we stand proud to be associated with the accounting profession in the country.

Therefore, I am delighed to stand here before you to acknowledge your positive contributions to the economic development of this splendid country, and its wonderful people.

At this point, I would like to present two challenges for the conference participants. First what kind of leadership is required to promote innovation and entrepreneurship that the country needs to address its developmental issues?

The theme of your conference, "Innovation, Change & Entrepreneurship" presents us with a challenge. We know that technological innovation and entrepreneurship is the surest way of creating jobs in any economy and develop a country. But how to foster this when there are so many obstacles to both, and there is no strong record to build on? Are we trapped like Baron von Munchausen forced to save ourselves from drowning in the swamp by pulling our own hair? Or can you lead the change, that is required to achieve a higher level of innovation and entrepreneurship?

The second challenge is how to accelerate our learning and obtain the necessary knowledge for the leadership challenge mentioned above? Knowledge – information combined with understanding - is power. Can you obtain the necessary knowledge, and use the ensuing power to make a difference? Knowledge, after all, is the proverbial lever, long enough to move the world.

While going through your program, you have high profile speakers who have put their hands up to empower you further and nourish your intellectual capacity; and I urge you all to maximize your interactivity during this meeting by face to face conversation, but also by taking notes and using modern internet based communication tools.

While I stand here to commend CPA PNG for having grown into a vibrant professional body with branches in most major centers, I encourage you all to develop yourselves professionally in all respects during this conference and as active members of CPA PNG.

I thank you all and enjoy your two days of interactive learning at this conference…

I NOW OFFICIALLY DECLARE THE CPA PAPUA NEW GUINEA AND LAE ANNUAL CONFERENCE 2012…OPEN, AND I WISH YOU TWO MOST ENJOYABLE DAYS OF INTERACTIVE LEARNING HERE IN LAE.

………………………………………………………………………………

Eating in the mess with SRC leader and EUREST manager

Welcome back, second semester 2012

Welcome back!

This is a welcome back message for all students, professional staff and Faculty members at the start of the 2nd semester of the academic year 2012. I will record another message at the end of the semester.

First of all, I wish to thank you all for the trust you placed in me, and the manner in which you have supported the new management team. You made me and my wife Paulina feel especially welcome here, and allowed us, together with you, to start making a difference in Papua New Guinea.

I also thank the Chief Secretary and the Director General of the Office of Higher Education and the newly elected members of parliament, for the trust they have placed in my person and in the UNITECH community.

Let me indicate the three priority topics that the senior management team will be working on this semester and the next:

1. first, a strategized approach to the necessary change and reform at UNITECH,
2. second, improved financial management, and
3. third better university governance through council reform.

1- The first priority: strategy. One of my roles as VC is as UNITECH's chief strategist. In this role, I am bound to uphold the Act, and ensure UNITECH can execute it's mission. UNITECH's mission is to provide teaching, research and community outreach of a high standard.

For all Faculty members, quality in teaching and research implies taking a disciplined and structured approach to teaching and assessment. For all others, quality means supporting UNITECH mission and operations. Regarding operations, we must remember that without committees UNITECH can not be governed.

It is important therefore the committee system be revived, and everybody contributes to decision making through committee work. We have to engage in continuous improvement of our quality management system, and measure progress towards our four strategic goals of:

1. creating sustainable and feasible postgraduate programs in all departments,
2. externalisation through contract teaching, research and consulting,
3. fostering entrepreneurship, and
4. achieving institutional accreditation for UNITECH, and professional accreditation for our programs.

Regarding this last goal, institutional accreditation is a very important strategic goal. Last month, all VC's signed the letter committing the universities to engage in institutional accreditation. This effort will be supported by the Office of Higher Education and AusAid.

Accreditation will be a major and long-term effort for all teaching and professional staff, and this is not the first nor the last time you will us hear talking about it. Embarking on institutional accreditation means we will be able to access the funding from the government and AusAid, which is reserved for this purpose.

Several departments have started working on accreditation by professional bodies, which is a similar type of effort, and will make institutional accreditation much easier. More importantly, it means in the future our graduates can be employed at a higher entry level, and access educational programs abroad more easily. Thus the UNITECH degree will acquire a higher value, and UNITECH will enhance and strengthen its reputation.

2- The second priority: improving financial management. As VC, I act as chief fundraiser, and chief representative of the institution towards the state and other stakeholders. The dependence of UNITECH on state finance creates a shortage of funding.

The 15% budget cut we got last year means each month we are spending over half a million Kina MORE than our budget allows us to do. All departments and sections are therefore invited to reconsider their activities and focus on increasing revenue and lowering costs.

Despite austerity measures, we need to continue to provide the services that students, staff and faculty members deserve. It is like repairing the air plane in full flight, but together we can do it.
A more coordinated approach to management has already brought results on the ground, while at the same time reducing wastage and increasing revenue.

Through our weekly senior management team meetings, bi-weekly Representatives Committee meetings and monthly meetings with all Heads of Departments we keep a tab on progress, and manage to stay focused on achieving results on the ground.

At this point, I wish to thank the members of the senior management team for the work they did last semester. I congratulate the DVC with his continuous efforts to mediate and broker peace on campus.
I also commend Pro VC Academic for having made good progress implementing quality assessment and for leading the E-Learning Team which will bring distance and blended learning at UNITECH to a higher level.

The acting registrar and bursar and their staff have made excellent progress organizing their sections more efficiently. We hope to have a new Registrar and Pro-VC Administration on board in the coming months so that our senior management team can more effectively help to change the course of UNITECH.

The project office deserves special mention for managing projects such as the installation of the ATM, the upgrading of the campus roads and the building of the new dormitory. Last but not least, I want to thank the security services, clinic, student services, and all other sections that work hard to improve life on campus for everybody.

Finally, the VC's office is making a tremendous effort with our Port Moresby office and Heads of Departments to improve relations with government departments, international donors, partner universities and private businesses with the purpose of improving and enhancing the reputation of UNITECH. During the last months, we have already signed several new memoranda of understanding with important partners and stakeholders, thus ensuring access to more resources.

3- The third priority: improving UNITECH governance. The challenges in governance reform we face at UNITECH are not unique or new to me, and I have observed and experienced how university governance evolves over time in different countries.

Ever since obtaining my doctorate in 1994, I have worked in higher education in low- and middle-income countries, as Faculty member, program coordinator, and as professional staff member. Since higher education is ever more a global industry and its mission universal, I found my experience in Latin America, Turkey, India, the USA and Europe is especially relevant and applicable here in Papua New Guinea.

The government in the National Executive Council approved last year the Independent Review of the PNG University system - the Namaliu Garnaut report - which for over 1 year now forms the basis of higher education policy. The Review contains two principal messages: first the need for smaller University councils, and secondly a focus on quality of teaching.

Those Council members and executives opposing these policies got themselves into so much trouble the last semester. This is lamentable, but they have nobody else to blame but themselves. We invite them now to stop resisting and attacking the UNITECH community. After myself taking over as VC on 7 February 2012, the university has massively chosen for change. Now, we need to continue to work together to achieve it.

A number of governance and management issues need to be sorted out this semester. Fortunately, we know where we are going. We have a Vision 2030, and are working on a strategic plan by creating a balanced scorecard. There are clear government policies, and several external reports on UNITECH written by independent bodies which provide us guidance.

Last semester, we had another external evaluation. The report of the mediation team will be released in the coming weeks, and make specific recommendations pointing the way forwards. We need to proceed in implementing all these recommendations, and not let us be overwhelmed by details, or overcome by delays.

I would like to commend the UNITECH community for being patient, and working through issues the UNITECH way: without violence, without throwing stones, by dialogue and negotiation. The Chief Secretary and Director General of the Office of Higher Education have come out publicly in the national newspapers, saying that the reform at UNITECH is an internal governance issue which must be resolved quickly. Both have also publicly confirmed my position as UNITECH's Vice-Chancellor, and given me the chance to achieve results with my team, during my first term of 4 years.

Now to summarize. First, UNITECH's strategy focuses on improving the quality of teaching and research, which will lead to international, institutional and professional accreditation. Our students and graduates deserve this. Secondly, we need to reduce costs and find other ways to raise revenue. Hard choices need to be made, and we ask for your cooperation and understanding. Thirdly, we need to work together in order to achieve council reform in less than 2 months, so as not to endanger the continuous operation of the University.

UNITECH deserves a Council that can drive strategic change, and can truly hold management accountable, thus providing the necessary checks and balances.

As Vice-Chancellor I am not strong, smart or wise enough to implement all these changes on my own. Fate has given me the opportunity to make a difference here at UNITECH, together with you.

I know there is no limit what a focused management team, a supportive university community, and a contributing state and other partners can achieve. When I was in Turkey in 2009 at Kocaeli University, I witnessed how in less than 10 years a complete university could be rebuild after being flattened by an earthquake.

When we continue on this course together, I am convinced that in 3 years time, the learning environment and the management of UNITECH will be much improved.

Together we can do it, and indeed make UNITECH fly.

Presentation at 5th Research Science & Technology Conference

Developing a Research Strategy for UNITECH in the framework of the PNG Vision 2050

Presented at the 5th Research, Science and Development Conference

Pacific Adventist University, Port Moresby PNG, 25-29 June 2012

(Check against delivery)

Dr. Albert Schram

Vice-Chancellor

Papua New Guinea University of Technology UNITECH

Introduction

The main purpose of this paper is to show how a university can realize its mission more efficiently by determining targets for a selected set of institution-specific indicators in the framework of a strategy management system, such as the balanced scorecard. These targets can be aligned with higher level targets from the national planning efforts.

All universities in the world have three general missions - teaching, research and community service. In addition, universities have a specific mission which makes them unique. For UNITECH this is "engendering critical evaluation and application of science & technology for PNG and the South Pacific".

Missions statements should describe what organizations do, which is distinct from the final purpose or outcome of these activities is different (Drucker 2006). The purpose of teaching is learning, the purpose of research is generating new knowledge, and the purpose of the third mission is different for each university ranging from business goals, to more educational, social or environmental goals. For UNITECH the purpose of critical evaluation and application of relevant technology is to contribute to the development of PNG in line with Vision 2050 national strategic plan. In this paper, however, we will concentrate on the research mission and its purpose.

The first qualification, I need to make is that I can not yet present the indicator set created by UNITECH Faculty and staff. Unfortunately, due to circumstances beyond my control the workshop in April and in June where this exercise was due to take place, was postponed twice. The second qualification, is that I don't want to suggest that indicators and numbers will solve PNG higher education sector. Nowadays, in higher education there is much attention for the plethora of university rankings and indicators. We argue, however, in this paper that the transparency and balance inherent in the BSC framework allows the production of meaningful information about a university for appropriate assessments and decisions (Kaplan and Norton 2007).

Most universities use series of key performance indicators (KPI's) to measure the performance of the organization. The BSC framework proposes to select a limited set of 20 or 25 indicators or so, which describe and are used to communicate the game plan of the university. Although applications in the private sector are more numerous, many universities use the BSC. With focused investment, lots of talent and a capacity to retain it, innovation in research and teaching, and effective strategic management some young universities have managed to achieve in a matter of decades, what European and US elite universities have developed over many generation. We can observe this in the Times Higher Education ranking of the top 100 universities under 50 years old (THE 2012). The cases of Maastricht University (ranked 16, founded 1976), Macquarie University (ranked 32 founded 1964), Wollongong (ranked 32 founded 1975) and Curtin (ranked 75, founded 1987) are remarkable because they score high on the list and all have applied the BSC framework. It seems, therefore, the BSC strategic management system has been a useful tool for some of these universities.

When creating the balanced scorecard to implement the strategy, each organization must chose its own performance indicators matching its strategy, and its unique mission. We will find that studying other examples will not help. An indicator set that is both relevant and balanced, and is part of a periodically revised strategic management system will produce the desired focus and results.

The paper is divided into three sections:

1- Higher Education in PNG at the cross roads,

2- A research strategy for PNG universities, and

3- Balanced indicators for research performance.

Higher Education in PNG at a cross roads

At independence in 1975, PNG inherited a large physical university infrastructure, and a staff of ex-pat academics, which it did not really know what to do with. As a consequence, it never realized that in order to maintain this intellectual and physical capital it had to be clear about its dependence on foreign academics, and invest in the upkeep of its physical capital. Despite attempts to plan for the higher education sector, there was no real higher education policy. Most likely, in the first decades after independence it had too many other developmental challenges.

The lack of attention for higher education policy is lamentable, because universities generate the relevant knowledge which allow to develop primary and secondary education, and train the teachers. In addition, lack of competent doctors and engineers will not allow a country to maintain its health system or physical infrastructure, on which the economy depends.

In 2009, UNITECH received a wake up call when the Australian of Engineers evaluated technical education in PNG. The main recommendation for UNITECH was to proceed towards professional accreditation. This call for action was not heeded, and instead a defensive approach was taken. The second call for action came with the 2010 Independent Review of the PNG University System or the Namaliu-Garnaut report. Initially, UNITECH again opposed, and went public with it, but when it was accepted as government policy by the National Executive Council, a part of the management started to accept some of the notions hesitantly. Now IRUS has been accepted as government policy, and all vice-chancellors in PNG have committed in writing to make an effort towards international institutional accreditation.

The authors of the IRUS deserve praise for this courageous exercise, which not only brought to the foreground some of the weaknesses of the PNG university system, but also proposes some solutions. The report advocates a focus on quality, and not quantity of graduates. After decades of break-neck growth (over 10%, doubling student population every 7 years), the university system is overstretched. Investments must be made to rebuild the resources required for teaching and research. At this point, it does not make any sense to increase student numbers even further while not first address under-staffing, and quality assurance.

Going for volume may be a viable strategy in some businesses but it does not work in higher education. Staff to student ratios would grow beyond any internationally acceptable standard, physical infrastructure will explode out of its seams, and completion rates of students would decrease noticeably. Fortunately, since 2007 the state of PNG has invested in upgrading teaching and research resources, and increased staffing ceilings, although investment has been only about fraction of what is needed.

From their side, PNG universities need to improve accountability and transparency by improving their governance structure. In particular, the world record size of the Council of over 30, needs to be reduced to a more management 12 or 15 in line with best-practice internationally. This will reduce the number of Council members who were nominated for reasons not related to their competences and are not contributing. Equally important this measure will reduce costs.

According to these reports, a strong focus is necessary on re-establishing the basic conditions for teaching, research and running a university. In this day and age, and especially when educating engineers, broadband internet is essential for teaching, and more strongly so for research. You can not create new knowledge if you do not have an idea what existing knowledge is (Popper 1986). The only way to find out about the state-of-the-art, is by accessing databases through the internet.

There are no justifications for not linking up the oceanic and fiber optic cables which are now monopolized by PNG Tellikom and PNG Power. The failure to do so the last 10 years, has put PNG back 20 years in development. Broadband internet has become essential for education, business and government, and the failure to connect is a free ticket into the digital abyss. Currently, for example, UNITECH has a satellite connection managing a theoretical 2-5 Mb/s download speed, when not saturated as it is during most of the business day. Nowadays, universities in the US and Europe are managing 1 Tb/s which is 200.000 to 500.000 times quicker.

UNITECH's mission is to develop teaching, research and community outreach of a high standard, and specifically engendering critical evaluation and application of S&T for PNG and the South Pacific. In its Vision 2030 document it establishes three mid-term objectives: create post-graduate programs, promote entrepreneurship, and increase externalisation. Currently, we have set up task forces and teams for two of these three objectives. UNITECH's Vision 2030 document links in well with PNG's Vision 2050. Vision 2050 prioritizes some sectors for development, and allows for an estimation of the man power needs.

The debate on higher education has been framed as to focus the number of graduates, while their quality again has been assumed. As the report of Engineers Australia and the Namaliu-Garnaut report makes clear, however, the quality of the graduates needs to be improved substantially. This will have an effect on quantity, since completion rates will increase when quality of teaching is improved. Therefore quality before growth, not after.

Soon we will have a new democratically elected government in PNG, a new DG of OHE, new VC's at UPNG and UNITECH, we have vibrant and growing private universities like PAU and DWU. Let's not let this opportunity pass to create an adequately staffed, financially sustainable and internationally recognized university system in PNG.

A research strategy for universities in PNG

Let's first consider the role of research in modern universities. In Europe, the Lisbon goal of making Europe the most competitive knowledge based economy in the world, implies government and private sector need to invest at least 3% of GDP in research, as the US, Korea and Japan have been doing. Without a similar investment and a coordinated effort, technological innovation will lag behind, and economic growth will diminish further. The triple helix model, which means government, industry and academia need to coordinate their efforts and investments (Jo Ritzen 2009). The life-long learning and the 7th Framework program (FP7) - the largest research grant program in the world - contribute to a coordinated and higher level of investment in research. The Cooperation window in particular is geared towards producing research results that can be applied in policy making or for developing innovative and marketable products (Landry, Amara, and Ouimet 2007).

The FP7 program is open for researchers of any nationality, and for any higher education institution in the world. After all, talented researchers can be born anywhere in the world, and with Europe's low population growth it needs to import it as the US has been doing for over 50 years. It is therefore laudable that a national contact point for FP7 has been created at OHE.

Apart from contributing to technological innovation, which is what drives economic growth in developed economies, universities have another important social responsibility, which is to produce employable graduates (Schram 2010). In order to do this they have to prepare graduates for the future, not for today's needs. It is therefore not sufficient to replicate knowledge, but new knowledge needs to be continuously created and integrated into teaching. This intimate connection between research and teaching is what makes universities highly relevant in society.

Conventionally research of an international standard has the following characteristics:

a- undertaken or supervised by someone who has proved his competency in research, a doctor,

b- global in nature and universal in its application,

c- embedded in an ongoing discussion among specialist,

d- published after anonymous peer review,

e- harnessed for the public good by cooperation with government and industry.


By this definition much of what is presented at this conference, including this speech is not research, and it does not matter. The spirit of research is very much present here, all these researchers coming to present their findings, or sometimes mere thoughts. This spirit of research will fuel the fire which will eventually produce new valid and reliable knowledge, and relevant technological innovation.

Balanced set of indicators in S&T research

Stated in plain language, a possible research strategy for any university in PNG is to:

- improve national coordination of research efforts in key research areas,

- use existing resources more efficiently and create some critical mass by cooperation,

- improve the effectiveness and efficiency of national and foreign research grants,

- create partnerships with foreign universities where they get access to our precious resources and we get access to their research facilities (labs and libraries), and

- increase corporate sponsorship of research.


In order to implement this strategy, the challenge is to find a balanced set of lead indicators which capture it, and make it possible to measure progress towards specific targets. The indicators therefore need to be aligned with the organization's goals, and progress needs to be review periodically in order to improve continuously.

I proposed the Balanced Scorecard framework as a conceptual framework for translating UNITECH's mission and objectives into a set of performance indicators. The main justification is that those young universities who have implemented the BSC have managed to ascend in the rankings much quicker than universities which did not.

How to find these lead indicators for the BSC? First a strategy needs to be based on the organization's mission, values, and vision. It is based on an idea of how to combine inner strengths (business focus) and outward value proposition (customer focus). It is a game plan, how to thrive and grow in a challenging and changing environment. It is not a vision, a list of intentions or wishes, or a any set key performance indicators (Rumelt 2011).

These selected indicators are subsequently distributed among four perspectives, which capture the key dimensions of the strategy (Kaplan and Norton 2007):

• financial (how do we look to the principal stakeholders?),

• customer (how do our students see us?),

• internal business processes (what processes must we excel at?), and

• innovation and learning (how can we continue to improve and create value?).

In a BSC framework, we distinguish diagnostic indicators, lead indicators and lag indicators. Diagnostic indicators provide information about the current state of the organization. The lead indicators are those that drive the proposed strategic change. The lag indicators provide information about the desired results. For research, for example, a set of indicators could be:

A- diagnostic indicators

- number of full-time Faculty with PhD

- number of PhD titles awarded

- number of Master degrees awarded

B- lead indicators

- number of months of mobilities in research collaborations

- grant funding

- corporate or contract research

C- lag indicators

- number of articles published in peer review media

- number of patents awarded

These indicators can be assigned to one of the 4 perspectives. For each of these indicators an annual target will be defined. In order for the UNITECH community to take ownership of a set of indicators, and thus of the strategy, the inclusion of some additional indicators and the setting of targets needs to be done in a workshop. Furthermore, the final set of indicators need to be checked for external and internal consistency. Are they aligned with the strategic goal and objectives? Will the set of indicators balance each other out so that too strong a focus on single indicator is avoided?

Regarding implementation, change can not be imposed from above on universities, as a recent episode of the dismissal and subsequent re-instatement of the Vice-Chancellor at the University of Virigina has shown. Most situations are in higher education organizations are alignment situations, where processes have to be aligned in order to reach strategic objectives efficiently and effectively. When however a consensus arises that change is necessary, a turn-around situation occurs. In those situations a opportunities arise to change the strategic course of an organization (Daly, Watkins, and Raevis 2006).

Conclusion

A BSC strategy management system can be used to measure progress towards strategic targets, and has been used by several young universities to advance substantially faster than they would otherwise. The choice of a balanced set of lead indicators is important, and is to some extent bottom-up. UNITECH will pioneer this effort, and share the results with the higher education sector in PNG. Each university, however, will need to select its own set of indicators reflecting its specific mission and state.

The necessary laboratory resources for simulation and experimentation are mostly lacking, and there is insufficient access to literature databases. Major investment is needed to remedy this, but in the mean time joint projects with foreign researchers can help out.

The state of PNG needs to create the basic infrastructure to do research, starting with broad band internet. broadband internet is essential for education, research, and business. The fibre optic cables are there, let's connect them! Internet will improve communication among researchers, and will make it easier to share resources with national and foreign researchers.

We need to better coordinate research effort in PNG and break the barriers for cooperation. In an hyper-connected world keeping information for yourself is not a viable tactic. Sharing knowledge after all is multiplying knowledge, and knowledge is power.

Producing valid and reliable knowledge through research, and the capacity to engage in life-long learning among our graduates will give us the proverbial long lever which can move the country towards its Vision 2050 goals.

List of References

- Daly, Peter H., Michael Watkins, and Cate Raevis. 2006. The First 90 Days in Government. Cambridge Mass.: Harvard Business School Press.

- Drucker, Peter. 2006. Managing the Non-Profit Organization. Harper Collins.

- Jo Ritzen. 2009. A Chance for European Universities. Amsterdam: Amsterdam University Press.

- Kaplan, Robert S., and David P. Norton. 1996. Balanced Scorecard. Cambridge Mass.: Harvard University Press.

———. 2007. “Using the Balanced Scorecard as a Strategic Management System.” Harvard Business Review (July-August): 150-162.

- Landry, Réjean, Nabil Amara, and Mathieu Ouimet. 2007. “Determinants of Knowledge Transfer: Evidence from Canadian University Researchers in Natural Sciences and Engineering.” Journal of Technology Transfer 32: 561-592.

- Popper, Karl. 1986. Objective Knowledge : An Evolutionary Approach. Oxford: Oxford University Press.

- Rumelt, Richard. 2011. “The Perils of Bad Strategy.” McKinsey Quarterly (June).

- Schram, Albert. 2010. “The Social Responsibility of the University as Producer of New Knowledge.” In Proceedings of the World Universities Congress, Canakkale Onzekiz Mart University (Canakkale, Turkey 20-24 October 2010). Canakkale, Turkey.

- THE. 2012. “The 100 Under 50.” http://www.timeshighereducation.co.uk/Journals/THE/THE/31_May_2012/attachments/THE_100_Under_50_.pdf.

A concept of University for UNITECH's learning community

A CONCEPT OF UNIVERSITY FOR UNITECH LEARNING COMMUNITY

Lecture By Vice Chancellor Dr Albert Schram for New Students And UNITECH Community

UNITECH CAMPUS, MONDAY 13 FEBRUARY 2012, DUNCANSON HALL, 7 PM – 9.30 PM

Good evening students, staff, faculty and honoured guests.

Thank you Chancellor for the introduction. Personally, I believe that together we must not only keep the university afloat, but in fact we can make UNITECH fly!

Before talking about the concept of university, allow me to introduce myself, to reflect on the theme chosen for this orientation week, and to devote a few words about the rules we live by here on campus.

I am a European academic, with almost 20 years work experience. My life's mission is to contribute to university development in low- and middle- income countries. My Dutch father comes from a family of small farmers, and sailors. One of my ancestors in fact was a colonizer in the 17th century, and made himself a great nuisance to the good people of Sri Lanka in 1656. My Italian mother is from a family of university professors all the way back to the 17th century.

In 1994, I obtained my doctorate in economic history from the European University Institute, near Florence Italy. This is the premier research institute of the European Commission in social sciences. Since then I have always worked at university, in the economics and business studies departments, obtaining the grade of associate professor at the university of Costa Rica in 1999. I have ample international work experience in higher education in the field of management and in environmental and health economics and policy.

I have taken up residence in 7 different countries in Latin America, Asia and Europe, which has taught me to be adaptive. It has also made clear to me that all over everybody can escape the constraints and limitations of the conditions and societies they grew up in. Tomorrow with prof. Gonduan will tell you more about this, don't miss his talk.

I have not only worked as an academic but also as a university executive. since 2005, I worked as a university manager and executive at some of Europe's leading business schools, and as a lecturer in management and leadership. I have been invited lecturer at universities in the USA, China and India. I am not an engineer, so I will rely on matters related to content of teaching to the other members of the management team, most of whom have a PhD. in engineering.

For those interested in my background, you can find more information about me on albertschram.blogspot.com. there you will also find the text of this speech, and other material related to UNITECH. This is my private communication channel with you, and i invite you to react to what you read there.

The theme of this year's orientation and registration week is "imitating Christ's humility for academic excellence". 'Humility' is a virtue for human co-existence and a necessary though not sufficient condition for learning. When we humble ourselves and commit to serve our calling in life, will there be respect, order and harmony. At UNITECH we are all humble learners, although we may have different roles. Likewise if we commit and dedicate ourselves to humbly serve in our capacities as staff and students here at UNITECH, will there be respect for each other and our common material and intellectual property.

Many of us will find in Christ the inspiration for maintaining this humility, but we are open to those who find this same inspiration in other great spiritual leaders, or ancient and more modern religions. 'Academic excellence' relates to the ambitions for UNITECH as a university. 'academic' refers to the core function of the university in research and teaching and 'excellence' describes the quality of operations and programs.

Both should determine the ultimate goal of the university to "produce graduates of world class standard". Those graduates will be highly employable, able to solve problems using the latest technologies, and by working together in professional teams, made up of widely diverse members. I am also advised that this weeks theme is the combined thinking of the university community regarding the crisis that befell Lae late last year, the terrible ferry disaster. These terrible events make one humble, let us never forget the innocent victims.

Let me spend a few words on UNITECH's rules, which maintain and sustain our learning in this community. By talking about rules, I do not wish to imply you can not be trusted. I talk about rules because I want to make sure you are familiar with the underlying concepts, and incite you to learn exactly what they are, since you may not yet be familiar with them.

I stress that the university is fully committed to ensuring the health and safety of the faculty, staff and students. When I or any other university official a rule we do this for the common good in the name of the university council, in which the students are represented. Remember that just as you need to live by these rules, every university official and staff member, including your VC, has to follow them, and help enforce them in the name of the university council, which is our boss and employer.

Let me give an example of two basic rules, which will not change. the "zero tolerance on alcohol and drug abuse" for which a banner has been posted at the front gate, as well as the amendments to the SRC constitution to disallow manifestations by regional groupings on the campuses are the reminders that these behaviours are unacceptable for our community. I am pleased that these two rules have achieved some of the desired results. the most obvious was that year 2011 started and was completed without any major mishaps.

As students you must take note of all the rules and to conduct yourselves accordingly. There will be no exceptions based on personal or other preferences. The rules will be applied fairly but strictly. Security and safety are important but the university and the management can only do so much. It must start with every individual. We all must think before we do anything, that is why we have been given a brain, and not just emotions, impulses and desires.

The rules are in place not to unnecessarily punish anyone but to ensure that a climate of peace and harmony is maintained at all times for staff and students to live, work and study. these are the conditions for a learning community to thrive.

The university admits students from all provinces of the country as well as from pacific islands so harmonious co-existence is of vital essence. here we must all learn to live, work and study together, just as later in our professional life we have to work together in diverse, multi-cultural teams.

The concept of university.

At few occasions I can address you all directly on a topic so close to my heart. Today I am happy to share 3 things that you will hopefully remember and serve you as guidance during your time at this university, and afterward.

1- First, I want to reflect on essence of the university experience for a student.

2- Secondly, I wish to describe the university ethos, or ethical standards, which will your membership to the community of graduates.

3- Finally, I will briefly outline what the university council and management team want to achieve in the coming years in order to give you an idea in which the direction we believe UNITECH should be moving, and what your role will be in this process.

We live in an exciting age, the 3rd great age of globalization. For the first time globalization is not based on building colonial empires through the force of arms, but on empires of the mind through universal learning.

Information is now available through mobile devices almost anywhere, at very low cost. Information in the hands of the educated, can kill prejudice, create positive collaboration, and can build the space to realize your dreams.

Knowledge based on valid and reliable information is power, power not for powers sake but power to do good and to contribute to development. that is your quest, that is your mission: to acquire valid and reliable knowledge, to learn. You will find in this you will have a lot in common with similar young adults elsewhere in the world who are on a similar quest.

1- What is the essence of a university experience for a student?

Why is this question relevant? Well, if in 4 years you are not able to capture the essence of the experience, you may have wasted your time here. Is it the knowledge that is reviewed at the exams? It can not be since most at my age would probably fail all the exams we did when we were 20 something years old. Is it the example of the teachers? Well some may provide an example, but others exhibit all human weaknesses, they are after all human, too human perhaps.

In order to answer this question and better understand the university experience, we must consult university history. The first university in Western Europe, the university of Bologna in Italy which was created in 1088, 901 years before the great wall between capitalist and communist ideologies came crashing down, and made the false dichotomy between capitalist and communist ideology, between first and second world obsolete.

Allow to elaborate a bit on the history of universities. "University" is short for universitas scolarum, which means learning community. What was taught then in Bologna, now is neither relevant, valid, or interesting. what remained the same, however, is how it was taught and how the body of students was organised and interacted among each other and with their teachers.

Let's look at teaching. In those days, teachers were paid directly by the students, not as today indirectly by public taxes. That is why then , as today, each speech at university commences with the words "dear students". The activities of a university then as now are focused on the students, and their families which are our ultimate customers. students would gather in small groups and due to the shortage of books a lector. if the lector was a doctor he was likely to be moving around. other patrons. nowadays more interactive student centred classroom. there is nothing, however, like a well structured course with relevant reading and a final assignment or exam to promote learning.

You need to trust your teacher in order to learn and change. After all, he or she will take you from the point where you are, to a point where you have never been. your guide has followed the same path, and beyond.

Universities would have the sole right to extend a doctors degree to a teacher, which is called the ius promovendi. once a doctor, This would give the right to teach and found another learning community, or university, in any city in the world. Doctor is therefore the universal academic title, which I proudly use. professor is an administrative, legal category which known different conditions in each country. The university spirit is international and expansive, and open, not confined and closed to foreigners. It is not expansive, however, in the sense of building a colonial empire, instead it build an empire of the mind.

Now let look at structure of this learning community. In Europe, each nation would organize for practical purpose along the lines of naciones, who would live together in colleges. there was beneficial competition for honours, but no instances of violence between naciones have been known. a remnant of this is college system at Oxford or Cambridge, and indeed Bologna.

So what is and what has been the essence of the university experience for a student? When you talk to university graduates all over the world, you will find the essence of the university experience for most is what was learned by the open exchange of views among a diverse learning community.

At university the barriers for this open exchange, originating from our upbringing in different communities, are no longer relevant. In order to perform as a professional engineer or otherwise in today's world you must be able to work in multi-national teams, and engage in problem solving in a creative and efficient manner. In order to achieve this positive exchange which leads to learning, the members of the community need to exhibit specific behaviour, which is based on certain minimum ethical rules.

2- Now let me reflect on the ethics of a learning community. this is my second point.

Let's look first what is not part of acceptable behaviour in a learning community. First, violence or the threat of violence has never offered a solution to conflicts between people of groups. Although violence may seem to solve a problem in the immediacy of the moment, if we think ahead, it will only lead to more violence and vengeance by the aggrieved parties. PNG as a Christian nation should have this firmly enshrined in all its dealings. If violence nevertheless occurs we will respond in an adequate and effective manner as a management team with the backing of the university council with the purpose of dissuading anyone to using violent means, and restoring climate of peaceful negotiation.

Secondly, behaving according to a certain ethos requires moral integrity. this means we can not use one set of rules in one situation, or with one group of people, and another set of rules with others. we can take account of differences between groups, but we all groups have to follow certain basic rules. this applies to differences between religious, ethnics, wantok, or national groups. If for instance, you see someone do something which is clearly wrong – stealing for example – you can not turn away and turn a blind eye just because the individual is member of you wantok, church, or nationality. you have the obligation to dissuade him or her, and stop the wrongful behaviour. Integrity does not only apply to actions but also to words. You can not say one thing to one group and another thing to another. truthfulness, clear communication and honesty are required when living in a learning communication.

Now let's look at the positive side, and see what a university ethos could consist of. The 10 commandments in our Christian tradition are specific and contain don't as well as do's. Let's keep it simple, and easy to remember. It is interesting to see that among the older Inca empire in the Andes in Peru, lived according only 3 positive commandments, or ground rules: to love, to work, and to learn.

First to love. Love what you are doing. There is no place in a university for indifference. Only passion for what you are doing will carry you through the many years of study required to master a discipline.

Secondly, indeed we need to work. There is no place at this or any other university for laziness or passivity. Sitting passively back, insisting on rights and not duties, and blaming others when things go wrong, just won't cut it at university.

Finally, to learn. There is no place at this university for stubbornness, and for those who refuse to learn or make learning in others impossible.

Never forget that we are here to learn and take responsibility for your learning. Don't blame the teacher if you don' t know the answer to a question. Don't blame other students who took a book out of the library. Don't blame low internet for not completing an assignment. there is always something you can do.

You will see that when you take responsibility for your own learning this is tremendously liberating and it frees up huge amount of positive energy. Instead of worrying and complaining you focus on your next positive action.

While learning, you as a person will change, that is inevitable, and the point of it really. You will change your points of view when you become acquainted with the evidence rooted in science. There will be no more place for hearsay, gossip, conspiracy theory or belief in magic.

University is not a place for people who do not know how to behave or respect others. It is not a place for people who are negative and always complain. Nor is it a place for people who don't mind or forget their manners. Make no mistake the university rules will be enforced by myself and the registrar's office, and when your attitude impedes your own learning or that of others, you will be called upon it by your teachers.

In short, at university we learn and grow through exchange in a learning community, which obeys certain rules or follows an ethos, that enhances open and honest communication for the purpose of learning.

3- Now my third remark, where will we be taking UNITECH in the coming years?

As stated in UNITECH 2030 strategy, we will make this the most innovative and entrepreneurial university in our fields of learning in the South Pacific. Prof. Gonduan will lecture you in more detail about the UNITECH 2030 and png 2050 visions. In order to interpret the UNITECH 2030 strategy and convert it into a work plan, in the medium term we will encourage and enhance the masters degrees, and recruit experienced and qualified academic staff with a doctorate to teach you. we will create an entrepreneurship program, because we want to prepare you for the situation where you may not quickly find a job, and have to create a job for yourself.

We will increase external activities that enhance the reputation of UNITECH through contract research and teaching. The activities of ATCDI in community service - after teaching and research UNITECH's third mission - will be enhanced. In order to achieve this international accreditation will be sought for some programs. r&d funds for innovation will be sought. the hiring process will be accelerated and improved. Finally, of utmost importance for UNITECH's community we will make efforts to improve liveability and quality of services on campus.

Before we can confident in saying where we are going, we have to know where we are coming from and where we are now. We need to understand how universities are developing these days, and how we can steer this process. You will see that you will be affected by these processes, and again we invite you to take an active role in university life in this sense. after all, our activities here as faculty and staff are focused on your needs.

What drives change for universities, as for many other institutions (original speech). in my view, there are three drivers of change, the same which drive change in society at large.

a- information technology, and the disappearance of intellectual property rights law, and withering away of national laws.

Older professors, here as well as in Europe, do not bother to read email. last week, I told one professor for example, that I sent him an email about a specific topic. He answered "oh today i did not check my email." 

The young, on the other hand, are tremendous. In fact, the first facebook friend here on campus is a high school student. The young and very young are tremendous. Let' s all learn from them the good things, while we give them the direction they still need.

We can all publish now, and we can all copy and paste. we do not need to buy our articles from publishers at a high price, we can publish under a creative commons license. It is essential to understand the different manners in which universities can respond to this.

b- internationalization and globalization

At UNITECH we may think we do not need to look from outside in, having a national monopoly on technical education. our students and graduates however, will enter a world in which they will be compared, and will compete with anyone anywhere.

For students this means suddenly you have a large number of unseen competitors, who will compete with you through the international labour and other markets.

At this point I like to tell a story: Indian students work 20 hours a day and are noisy only at 4 am.

You have much more confidence than earlier generations of PNG's, because circumstance have improved, and your knowledge about the world has increased. Apartheid has fallen in South africa, white Australia policy has ended, and the USA have a African-american president. Don't be afraid to open your eyes, and in your journey of learning travel wide and far when you are offered the opportunity.

c- Value for money.

The primacy of politics and ideology is gone in giving you an idea of the world around you. you can find this out by yourself nowadays. When you know what is for sale, and you know the prices, you are able to drive a harder bargain. instead university students are increasingly aware of the full cost, or opportunity costs of happy about this.

Given these tremendous changes, we need a different type of leadership, less political, more adaptive. in the past, the leaders knew the answers to the problems, and needed alliances to be respected. some were so consumed by public approval, that they forgot to focus on the effect of their decisions, and their value added to the organisation.

In order to illustrate the importance of adaptive leadership in this rapidly changing global environment allow me to tell you the gorilla story, told by Prof. Heifetz author of the book on adaptive leadership. (Disclaimer any likeness between gorillas and your current university or other leaders is purely coincidental.)

To sum up, (1) the essence of a university education at UNITECH is the open and honest exchange of views with the aim of enhancing your learning about the topics of your interest.

(2) This learning experience requires us to behave in certain ways, and exhibit a certain ethos. We will not try to achieve our aims through violence. Violence is the instrument of the weak and insecure. you will have to demonstrate moral integrity through our action. only then, you will be free in responsibility. Finally, if you are capture this essence, you will hopefully enjoy a great learning experience at UNITECH and a long and fruitful professional life.

(3) UNITECH'S reputation as a great institution of the PNG state, and its worldwide reputation as an innovative and entrepreneurial university will be re-established and strengthened. For you this means, your UNITECH degree will contribute to a long and fruitful professional life, during which you will never stop learning where you will be able and equipped to answer the challenges of leadership as a person and a professional.

Concluding remarks

I feel honoured and privileged to serve this great institution, and its vibrant learning community, as you should feel honoured and privileged to be a student at UNITECH. I am grateful to the council for having confidence in me to appoint me as vice chancellor for the university of technology, which I will humbly serve with the purpose of promoting excellence in teaching in research.

Finally, I want to thank my predecessor professor Misty Baloiloi and his management for their hard work and commitment that have ensured that this university has not only survived during the most difficult and trying times, but also moved forward in terms of new curriculum development, new programs, post graduate studies and rehabilitation of study facilities.

Thank you and God bless everyone during the academic year 2012.