К содержанию номера журнала: Вестник КАСУ №4 - 2006
Автор: Новицкая Ю.В.
Much of the heated public
debate in higher education seems to reflect a perception among some observers
that postsecondary institutions would be greatly improved if only they operated
more in the style of successful American businesses (e.g., Coca Cola,
Microsoft, etc.). This paper presents two logical arguments: one supporting
and one opposing the proposition that colleges and universities should model
their planning and decision making on successful for-profit organizations.
Life does not stand still.
Neither do we. All organizations change and evolve. Some do rapidly, others at
a barely perceptible pace. During the past decades we have witnessed
technological advances, major demographic changes, changes in the family
structure, a greatly heightened social consciousness, and an increased emphasis
on access to higher education for the economically and educationally
An institution such as higher
education could not survive in a society undergoing such radical changes unless
it succeeds in adapting to those changes (Ehrle & Bennet, 1987).
There is an opinion that
post-secondary institutions would be greatly improved if only they operated in
the style of successful American businesses. The answer to the question whether
academic world organizations should follow the steps of business corporations
lies in the similarities and differences between academic and business
This paper presents an attempt
of comparing business and academic worlds, the way they are governed and
administered, finding features that make these worlds similar or different. So
let us consider two statements:
1) Colleges and universities
should not model their planning and decision making on successful for-profit
organizations because they greatly differ in nature and the way they are
governed and administered.
2) Colleges and universities
should model their planning and decision making on successful for-profit
organizations because they are similar to business organizations, operate in
the same environment and obey the same organization development laws.
Let us first
compare two management theories – business management theory and collegial
management theory, taking for a definition of a theory Herbert Feigl’s
statement that a theory is a set of assumptions from which a larger set of
empirical laws can be derived.
point in business management theory is that the business is conducted for the
primary benefit of its owners, either immediate owners as of a small store, or
stockholders as in large corporations. There are certainly secondary
beneficiaries – those who purchase the goods. The main procedure of business
includes doing everything that will allow maximum profit on a product, which is
able to maintain its place in competition with similar products. If a product
is priced too high that it looses its positions, either the price might be
reduced, which may require more proficient methods of production, or the
quality might be made superior to competitors’ product quality, which also
requires more efficient procedures.
point is that those who work in business better fit into McGregor’s theory X.
and so management involves seeing to it that they are supposed to do “to the
maximum”. There are two methods to achieve this – coercion and incentives: you
either force people to do what they are supposed to do by using different
sanctions, or persuade them by offering benefits or extra money.
business involves setting policies regarding the nature and quality of the
product, production procedures, setting levels of incentives and determining
sanctions. Administration involves applying set policies (Westmeyer, 1990).
collegial theory implies that all the scholars are involved in a situation
discussing all points of view until they reach consensus on what should be
done. This is far from possible, so a modification of collegial theory is the
inclusion of democratic decision making. So the first basic key is the open
forum discussion, where everyone who has a viewpoint to be expressed has a
chance to present his case, and if it is not possible to reach consensus, there
is an opportunity to vote.
A second key
of collegial theory is professional authority. A university is nothing else but
a collection of experts, each is a specialist in a field of study. The expert
in a given field is a person in the best position to make decisions related to
that field. A professional in a university is expected to continue research and
add to the knowledge in his field, so should not be burdened with
organizational restrains on this productivity. Thus, the argument for a
collegial system in higher education institutions says that all represented
professional point of view must be heard before the decision is made.
situation, deans and provosts, vice presidents and other officials must realize
that their authority stems not from the position but from the delegation of the
power to make certain limited choices based on the governance of the faculty,
the policies set by the faculty discussion and consensus (Westmeyer, 1990).
1. Colleges and universities should not model their planning and
decision making on successful for-profit organizations because they greatly
differ in nature and the way they are governed and administered.
There are two different cultures – one favoring competition, strategy
and outcomes, and the other prizing independence, reflection, and process.
that best reflects the ways in which institutions of higher education differ
from other organizations is governance. The times when Boards of Trustees
exercised full authority are gone. Decision making is now spread among
trustees, presidents, and faculty, and there is a great deal of ambiguity as to
who has more power.
trustees have different backgrounds and values. About 40 % of board members are
business people (College Governing Boards, 1986), who are very likely to see
their institutions as business organizations and support the idea of top-down
management. On the other hand trustees do not fully understand and support the
idea of academic freedom, and believe that certain decisions do not require
involvement of the faculty in decision making process (Birnbaum, 1988).
universities became larger and more complex, faculty do not any more assume
administrative positions and then return to the classroom as they used to do
earlier. Now they do not deal with federal regulations or student financial aid
procedures. Faculty and administrators fill different roles, they deal with
different aspects of the environment, and have different backgrounds, and it is
not uncommon that their goals contradict.
March describe the university, only partially in caricature, as follows:
“Teachers decide if, when, and what to teach. Students decide if, when, and
what to learn. Legislators and donors decide if, when, and what to support.”
Decisions, made within the university, are the consequence of the system “but
[are] intended by no one and decisively controlled by no one” (Karol and
control is another problem of academic institutions. There simultaneously exist
two structures within the universities: the conventional administrative
hierarchy and the structure through which faculty make decisions regarding
those aspects of the institution over which they have jurisdiction (Birnbaum,
business organizations, major goal activities are directed and coordinated by a
hierarchy of administrators who decide critical operational questions. This
authority derives from their position in the organizational structure that
implies directing the activities of others.
There are two
lines of authority in organizations – administrative and professional.
Administrative officers direct the primary goals of organization activities,
and professionals provide secondary support activities and knowledge. If a
conflict arises, it is resolved by recognizing the supremacy of administrative
This is not
the case with professional organizations like colleges and universities.
University’s professionals are not only responsible for producing, applying,
preserving and communicating knowledge, but also for setting organizational
goals and maintaining standards of performance.
have to consider several major areas while setting its policies: structures for
governance/administration, budgeting, procedures related to construction of
buildings, academic programs, promotion, tenure and salary increments, athletic
programs, student matters, research, public relations, parking, security and
other services (Westmeyer, 1996). Some of the areas above are academic and some
are not. It seems hardly possible to implement business management approach to
all of these areas.
2. Colleges and universities should model
their planning and decision making on successful for-profit organizations
because they are similar to business organizations, operate in the same
environment and obey the same organization development laws.
business theory are present in institutions of higher education today: competition
for clients (purchasers), the need for cost-effectiveness, sanctions and
incentives (less in the form of money, but more likely in the form of rank and
prestige increases or denials), and the departments are structures in terms of
the nature of the service or product (department of students life, special
education department, or department of leadership, policy and organizations) (Westmeyer,
education is a multi-billion dollar enterprise and as any other enterprise it
is governed by the financial realities of income and outlay, and by the market
realities of supply and demand.
of higher education are exactly the same as the resources of any business
entity: personnel, physical plant, and capital. When higher education learns
how to manage its resources, it will be able to maintain costs, improve
productivity, and enhance non-student related issues (Lenington, 1996).
As we entered
the twenty first century, the major forces of a larger societal environment are
reshaping the nature of postsecondary education. Competition, which is
primarily an element of business world, has become one of the major issues to
consider while governing institutions of higher education. The major forces that
shape the competition within postsecondary education industry are similar to
those that influence competition in a business world and as follows: the threat
of entry into industry by new organizations, the bargaining power of suppliers
(students clientele), the bargaining power of customers (employers, funding
sources), and the threat of substitute services (Peterson & Dill, 1997).
governance has become increasingly complex as more and more external
constituencies demand that higher education respond to their interests.
rapidly changing legal, social, economic and technological environments, boards
increasingly are turning to business leaders and government officials, who they
believe know something about navigating conflict and who share their sense of
the urgent need to respond to changing conditions (Ferren, 2001).
and 1990, business scholars proposed two dozen management innovations, some of
which were adopted by institutions of higher education. The management
innovations considered were Planning, Programming and Budgeting System,
Zero-Based Budgeting, Management by Objectives, Strategic Planning, Total
Control Management, Business Process Reengineering, and Benchmarking (Birnbaum,
2000). Some of them, or their elements, have proved to be useful in higher
education environment and are still considered by university authorities.
development and advocacy of new management approaches in academic world
continues, and at an increasing pace. The fact that academic and business
organizations have a lot of common features and that they are influenced by the
same external environment forces and the experience of the past show that
business theories might be successfully implemented in the academic setting.
Peculiarities of academic institutions that make them different form for-profit
organizations suggest that business management innovations should be tailored
to the nature and needs of postsecondary education industry and not be used as
universally applicable quick-fix solutions.
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К содержанию номера журнала: Вестник КАСУ №4 - 2006