The University as a Business

Old school...

Some time ago many university administrators became enamored of the idea of the university as a business. In this model, students are customers, faculty are workers, and the universities, like soft drinks, become brands.

There is, of course, a business side to universities-fees, housing, services and so on. This side of the university should, of course, be run like a business. However, it seems to be a mistake to treat the entire university as a business.

One reason is that the student is not simply a customer who is being sold a product and service. Rather, the student is supposed to become part of a learning community and undergo a journey of education. The business model is to get the most money from the customer for the least possible return. This, as might be imagined, seems quite in contrast with what education is supposed to be all about.

A second reason is that adopting the business model seems to lead to adopting the tendency of businesses to focus on the good of the upper management rather than on the good of the employees and the customer. While administration is an important aspect of a university, the trend at many universities has been towards higher salaries for administrators relative to faculty (the people who do the actual teaching) and also an increase in the number of administrators. The impact on the university is similar to what is seen in the business world: those who perform the actual mission are underpaid, those who “administer” are often paid very well, and those who are supposed to be served find that they are getting less for their money. At my university, faculty have been let go, staff members have been fired, salaries of faculty and staff cut, class sizes have been increased, and so on. In contrast, the president has a base salary of $325,000 per year and is guaranteed a bonus of 25-35% of his base salary. For the faculty, the yearly bonus is getting a contact for next year. For the students, this situation means that it is harder to graduate on time because of the difficulty of getting into needed classes. It also means that there are more students per faculty member, which can dilute the education process (for example, my Intro to Philosophy class has 75 students when it is supposed to have 35).

A third reason is that adopting the business model leads to thinking of the university in terms of a profitable brand-presumably on par with a brand of soda or snack chip. This focus can lead to paying less attention to the university as an institution of education and more attention being focused on the commercial aspects. This sort of outlook can lead university officials to sound very much like corporate spokespeople when a problem arises. For example, in response to the tragic death of Florida A&M University student Robert Champion in a suspected hazing incident, the president of the university wrote in a response letter that “preserving the image and the FAMU brand is of paramount importance to me.” What is more troubling is that this model also encourages university officials to act in ways intended to preserve the “brand” that can protect people who are doing rather bad things, as seems to be the case at Penn State. To be fair, an institution acting to conceal the misdeeds of its members is not unique to the business world (see, for example, the Catholic Church’s handling of the sex scandals). However, a business style culture does seem to encourage such behavior and the model of the institutional cover up is well grounded in the business world.

A fourth concern is that the university as business approach can be extremely detrimental to the students. The troubling problems with American for-profit colleges are have been a point of serious concern and they are generally seen as being rather predatory rather than pedagogical. While “conventional” colleges and universities have not yet fully embraced the for-profit model, this is clearly a danger.

A fifth concern is that the business approach grants administrators power over the academic aspects of the university. They can determine which classes are offered and who is retained (or fired) by using their control over the funding and other administrative aspects. While this is standard practice in business in which governance is not shared, universities have a practice of shared governance in which the faculty play a role in the governance. To put things a bit simply, the faculty are supposed to handle the academic aspects. This division is sensible, given that faculty are experts in their areas just as administrators are supposed to be experts in their areas. Having the non-academic administrators decide what classes can be offered is on par with assigning the faculty to set up the contracts for the bookstore, cafeteria services and so on.  Undermining shared governance is to erode the academic aspect of the academy in favor of the business aspect-and this cannot bode well for the education of the students.

I do agree that universities should be properly run and that there is clearly a role for the business approach at the academy. However, this should be limited to the aspects of the university that are, in fact, pure business.