EMBARGOED UNTIL DELIVERY CHECK AGAINST DELIVERY
OPENING OF THE GRADUATE SCHOOL OF MANAGEMENT
AT THE UNIVERSITY OF MELBOURNE
MELBOURNE 2 DECEMBER 1986
John Gough, distinguished guests, ladies and gentlemen,
Before dinner I had the pleasure of inspecting the building
which will house the Graduate School of Management. I saw
the stunning Arthur Boyd which graces the foyer and I was
shown the impressive teaching and residential facilities
which will, I am sure, make this School a comfortable and
stimulating environment for all who use it.
But John, after formally thanking you for the invitation to
open the School, my first comment must be to praise its
magnificent location: only a tram-ride away from
Melbourne's central business district, yet also part of one
of Australia's finest universities.
To say that the Graduate School of Management is well placed
to take advantage of both the business and the academic
environments is almost a criminal understatement.
This shared environment is a symbol for an important trend
in Australian businesses and universities: academics and
business people are increasingly learning that they must
work together.
The School is the latest in the growing series of links
between universities and the business world links which
are beneficial not just to the academic and commercial
partners themselves but to Australia's whole economic and
intellectual life.
We ' all recognise that servicing the business world should
not be the sole objective of our educational institutions.
Yet there is an urgent need for universities and other
tertiary institutions to complement their pure research and
their study of the humanities with applied work; to share
their skills and insights with the rest of the community and
thereby contribute to solving the problems of contemporary
Au st ral1i a.
I am, of course, not the first person to articulate that
goal. EPAC's report on human capital, the Business
Council's report on work practices, the Kirby Committee of
inquiry into Labor Market Programs and the Ralph Committee
Report have all tackled various aspects of the topic.
Indeed, the Ralph Report was the important trigger in the
decision to establish this Graduate School.
Two nonths ago I addressed a Forum on Business and
University Co-operation sponsored by the Business Council of
Australia and the Australian Vice-Chancellors Committee.
Behind that forum was a joint report of those groups which
detailed some of the existing links between business and the
universities such as university-based consulting
companies, liaison and advisory units, and research and
development centres concentrating on industrial
applications. In addition, Australian universities now operate commercial
agencies which act as brokers between their researchers and
companies which can develop, manufacture, and market their
ideas. Melbourne University has produced two of the success
stories: the bionic ear, which could create a $ 50 million
market by 1990, and a new blood test for the detection of
breast cancer.
These links between universitie's and business must be
strengthened. For its part, my Government has been eager to see greater
communication between industry and the Education Department.
The Education Minister, Susan Ryan, is establishing an
Industry Reference Group, which will hold its first meeting
in 2 days time. I believe this Group will lay the
foundations for continuing high-level liaison on future
priorities in education, on industry's concerns about the
education sector and its output, and on ways of improving
the response of the education sector to industry and
employer needs.
In addition, the Standing Committee on Tertiary Education
and Industry Relationships has been established to review
policies concerned with tertiary education and its links
with industry.
All these developments are important because the Australian
economy urgently needs the fruits of co-operation between
business and universities.
Both sides need to do more. Our tertiary institutions must
become more sensitive to the needs of industry. And
Australian employers must improve their record of investment
in research and development and in the application of
technology to Australian needs.
But this Graduate School is a great example of both sides
combining to form an institution which w ' ill have lasting
benefit to themselves and to the whole nation.
We owe a real debt of gratitude to the donors who have
helped create the Graduate School of Management. I note
that some of the people associated with those donations are
here tonight to mark this important occasion. it is fitting
that the theatres, library and other parts of the new School
have been named after the principal donors to honour the
very great assistance they have given.
of ccurse the University of Melbourne itself provided a
substantial grant to the school. And I am proud to state
that half of the $ 9 million cost of the School was borne by
the Federal Government.
In our last Budget we allocated $ 750,000 for the
establishment of a similar management school at Macquarie
University, which will be funded, like this Melbourne
School, jointly with the private sector.
For the task of training managers -is something which for too
long we have done in a hit-and-miss fashion. It's simply no
longer suitable for a country of Australia's economic
complexity to imagine that industrial decision-makers should
receive no formal business training outside their workplace.
Australian managers today are challenged on many fronts.
And lest anyone imagine that we in the Government are not
practicing what we preach about the need for improved
management let me point out to them in passing the success
we have had in our efforts to streamline our own public
service. For I believe that all of us, in the private and the public
sectors, must work to develop a new business style in this
country if we are to take advantage of the opportunities
before us. And I believe institutions such as the Graduate
School of Management have a crucial mission to fulfill in
creating that new style.
But I want on this occasion to mention three of the most
important challenges facing private sector managers
challenges which I trust the School of Management will seek
to address in training the managers of tomorrow.
First, Australian managers must learn to exploit new
markets. I am sure I do not need to tell anyone in this
audience particularly over such a pleasant meal the
nature of the economic problems Australia faces and the
seriousness of the long-term solutions which we must master.
The substantial real depreciation of our currency, in
conjunction with nominal wage restraint, has catapulted
Australian industries into an entirely new market situation.
In particular our manufacturers and our service industries
now have opportunities open to them which previously could
not even be dreamed of.
But the essential point is that those opportunities are
worthless to business, to the country unless managers
are prepared to break out of the security of servicing
traditional markets and seek out and win new sales in
unfamiliar markets.
In many cases that new market will be located in Australia.
Increasingly, however, if the manufacturing and services
sectors are to play their part in Australia's
reconstruction, those markets will need to be found offshore
: in Japan, in the rest of the Western Pacific and, of
course, in the U. S. and Europe.
And in this context I might add that the Asian Studies
Council has been established by the Government to strengthen
education and training about Asia, including management
education. The second challenge is people management. I have long
stressed the virtues of co-operation and consensus in public
life especially compared to the barrenness of
confrontation and division.
That has been the key to our approach to industrial
relations and our economic performance since 1983 but it
also has an important new dimension in meeting Australia's
needs in 1986.
In September I called a unique'mieeting of the peak employer
bodies and the ACTU to discuss the reform of work and
management practices. This task is now urgent it provides
a sure vehicle to raising productivity and thus preserving
our new competitiveness into the longer term.
Change is always easiest to accomplish when both the need
for and the consequences of it are well understood and
that is no less the case in this instance. The key to
success, is good two-way communication within the
organisation and a shared perception of the need for change.
I must say that I have been impressed on many occasions by
the scale and pace of work place reforms underway in key
areas of our economy some, but not all of which, are
occuring in the context of government-sponsored industry
plans. That need for good communication is all the greater when
technological change is also involved and it is the
management of technology, to which I wish to turn now, which
is the third of the great management challenges facing
Australia. Throughout the US and Europe, business managements are
recognising that survival and prosperity depend upon their
becoming more innovative and making better use of
technology.
In 1983 three out of the four top spots on the New York
Times bestselling non-fiction titles were In Search of
Excellence by Tom Peters and Robert Waterman, which hs sold
more than 5 million copies worldwide; One Minute Manager by
Kenneth Blanchard which has notched up 4 million sales; and
Megatrends by John Naisbitt with sales of 7 million.
This latest wave of management thinking points the way in
our search for a new managerial style. It suggests that a
successful managerial strategy for Australian industry must
include better use of technology and better product
development. This is a vital shortcoming in corporate
strategies in Australia at present.
A recent survey among the world's top companies confirms
that time and again the superiority of the product, rather
than mere price, is the reason for success. Countries which
wish to be the leaders in the decades ahead must concentrate
on product innovation making new products or modifying and
improving established products and on producing them as
efficiently as possible.
Japan has shown the world how to run a company by product
innovation. The Chairman of Sony, Akio Morita is quoted as
saying " My job is to make our products obsolete before our
competitors do".
But in Australia, we have become locked into traditional
products with little scope for., product differentiation. We
have traditionally concentrated instead on using technology
to increase productivity through automation and cost
cutting, for example.
It is increasingly widely accepted that resolutely chipping
away at waste and inefficiency is not enough to restore
competitiveness. There is in fact no substitute for
in-house research and development, which must be seen as
a central, integral and continuing part of every
manufacturing company's operations.
As I have already said, good communication is an essential
management skill. It is in particular a means towards better
use of technology. Merely acquiring and applying new
technology is not enough in itself. It must be accompanied
by equally innovative methods of training and organisation
in short, again, better people management.
There is no simple management format for successful
innovation. Some studies suggest that winning companies are
relatively unhierarchical. The key to innovative management
must be the encouragement of initiative throghout the
business. only in this way can a business tap the creative.
abilities of all its workers.
In successful Japanese companies it is recognised that most
of the innovation takes place on the shop floor. What goes
on at the grassroots is often recognised as of more
competitive significance than -lofty thinking in top floor
offices.
But the OECD Examiners of Australia's science and technology
policies commented: " the technical co-operation between
workers and management which is common in the FRG or
Scandinavia or Japan seemed to us to be much more
exceptional in Australia".
Australian management must more fully appreciate its
workforce as one of its prime assets.
Australian managers, unlike some of their Japanese or
American counterparts, concentrate on the financial and
technical aspects of new projects and look to tap the
external labour market, including schools and universities,
to solve their skill needs.
The recent Business Council paper on work practices
recognises resistance to new technology as a major source of
restrictive practices and workplace rigidities. But it also
recognises the importance of greater emphasis on training
and on the development and utilisation of skills and
concedes that management has not paid sufficient attention
to these matters.
For these reasons so I welcome the advent of the Graduate
School of Management: because it demonstrates a commitment
by the private sector to the education of its own managers.
The School will provide Master of Business Administration
courses as well as Doctoral programs. Perhaps just as
importantly it will be the new home of the short duration,
residential, management programs for senior business
executives. In all, the school's teaching program will encourage the
highest standards and the kind of frequent
cross-fertilisation of ideas which will ensure its students
remain closely in touch with contemporary issues and
management techniques.
Ladies and gentlemen,
It is my hope that business management schools will
contribute directly to the emergence, from behind the
traditionally protective barriers that have shielded our
domestic manufacturing industry, of a new productive culture
in Australia.
For all of these reasons I am pleased to formally to open
the University of Melbourne's Graduate School of Management.