A Philosopher's Blog

The University as a Business

Posted in Business, Philosophy, Universities & Colleges by Michael LaBossiere on December 12, 2011
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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.

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A Virtual Economy

Posted in Video Games by Michael LaBossiere on March 31, 2010
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Spending money for games that allow you to play in an imaginary world is nothing new. However, a new way has been found to monetize games: selling items within games for real money. While this has been done in various online games against the terms of service of such games, Playfish has this as their business model. Facebook users can play their various games for free, but they buy the items in the game with real money (and lots of it).

Of course, virtual commodities are nothing new. People buy music, videos and software online. It can be argued that the virtual items in online games are similar-after all, they are digital “entities” that are purchased for enjoyment or use. Of course, music, videos and software do seem a bit more “substantial” than items in a video game, but perhaps this is not really a difference in kind but one of complexity.

While buying such game items might seem odd, it actually does make some sense. After all, if it makes sense to buy a song on iTunes because you enjoy it, it seems equally sensible to buy items in a game so as to enjoy the game. While the song might be seen as real, the game item is also real insofar as it creates enjoyment (as Mill argued, anything that can produce an effect is real).

In the case of competitive games, the selling of items does create the obvious problem of game balance and does violate a rather common principle of gamer ethics regarding buying advantages in a game with real money (that is, this is wrong).

Interestingly, this virtual economy is being lauded as not just a rather clever way to make money,  but also as a way to gain excellent data about economic behavior. While gathering such data in the real world can be costly and difficult (and often yield dubious results) the virtual economy in such games can be tracked with  precision.

However, there is the obvious concern of whether or not the online behavior matches real world economic behavior. Another concern is whether the people engaged in the online games differ in important respects from the general population. However, this is certainly interesting to folks who are into economics.

To close, I cannot help but think about Pet Rocks. When I was a kid, some clever people found a way to sell rocks as pets. When I think about people buying virtual things for real money, I keep picturing Pet Rocks.

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The Bush Administration & The Business Model

Posted in Politics by Michael LaBossiere on August 15, 2008

One stereotype of Republicans is that they promise to run government as a business. This is generally presented by the conservatives as a good thing. After all, businesses are expected to make a profit, run smoothly and run in an efficient manner. In contrast, government is generally seen as being run at a loss, run poorly and run inefficiently. Bush and his fellows came into power with a promise to run the government like  a business.

They kept this promise.

Of course, they did not give us the expected efficiency and smoothness. Rather, they followed the sort of business model that resulted in the subprime mess.

This model is essential the same as irrational selfishness. The hallmarks of this are as follows.

First, the individual or group is primarily (or even solely) concerned about itself.  The folks bringing us the subprime mess and the Bush administration have this in common. Looking at the behavior of both sets of people, it is evident that the general good was not their concern.

Second, the individual or group is focused on getting what he or they value without reflection on whether this is truly what is good. The sophists of ancient Greece had this problem as does the Bush administration and the subprime folks. In the case of the subprime folks, they were far too focused on money. In the case of Bush, he seems to value damaging America. After all, he has created a massive debt, started wars, and allowed Americans to suffer through disasters.

Third, the individual or group is poor at assessing consequences (hence the irrational aspect). Bush doesn’t seem to have a very good grasp of what his actions and decisions will entail. Unless, of course, his goal has been to wreck America. If so, then he has acted in a very effective and rational manner. In the case of the subprime folks, they clearly did not consider what the results would be of their actions.

Fourth, the individual or group resents attempts to limit their actions and take steps to avoid or neutralize such restrictions even when such restrictions are legitimate. The Bush administration’s guiding quote seems to have been “I’ll do what I want and no one can stop me.” They routinely violated or bent the laws of the United States and acted with resentment and retaliation when people attempted to question or correct them. The subprime folks took steps to neutralize or prevent any regulations or oversight that might impede their drive towards destruction.

While some have praised selfishness and the business model based on it, it does not seem to work very well for most of those involved.