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Mar 3, 2011

Can the Academy Be Run Like a Business?

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Food for Thought

WSJ

A 265-page spreadsheet, released last month by the chancellor of the Texas A&M University system, amounted to a profit-and-loss statement for each faculty member, weighing annual salary against students taught, tuition generated, and research grants obtained....

As budget pressures mount, legislators and governors are increasingly demanding data proving that money given to colleges is well spent. States spend about 11% of their general-fund budgets subsidizing higher education. That totaled more than $78 billion in fiscal year 2008, according to the National Association of State Budget Officers....

This new emphasis has raised hackles in academia. Some professors express deep concern that the focus on serving student" customers" and delivering value to taxpayers will turn public colleges into factories. They worry that it will upend the essential nature of a university, where the Milton scholar who teaches a senior seminar to five English majors is valued as much as the engineering professor who lands a million-dollar research grant.

Details vary, but colleges typically earn points under such a system for pushing students to take science, engineering and math; for ensuring that they complete classes that they start; for improving on-time graduation rates; and for boosting more low-income students to degrees.

These performance metrics generally affect just a portion of an institution's public funding—but that can be significant. In Ohio, for example, state funding for one community college jumped 11% in each of the past two years because of the new formulas. Several four-year campuses, by contrast, lost about 5% a year. President Barack Obama has pushed for similar incentives on a national level but could not get a proposed $2.5 billion fund for high-achieving colleges through Congress.


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More Comments:

Tim Matthewson - 10/29/2010

The emphasis on the business model promotes the view that the customer is always right. But as every professor knows, students are not always right, and in fact that is why students go to school, to learn what is right and what is wrong, and to learn what should be learned and what should be avoided. The business model will, in the long run, destroy academia.

L. S. Powers - 10/29/2010

Why does everything now have to be run like a business? All we hear from politicians is how they will run the government "like a business". The academy and government and many other institutions do not have the same objective as the "bottom line" traditional business. But since the 1980s the academy has seen an ever creeping presence of a business mindset established. From the top heavy administration to the way students are forced to fund their education with the criminal student loan industry. Now we are seeing an even greater acceleration of this mindset as the traditional brick and mortar, not for profit, college and university having to compete with the online for-profit school. The online industry took off in the last ten years when the Bush administration made it possible for them to receive federal student aid money.

I believe this has done the greatest harm to higher education as both the old and new models are driven with a business ethic which only looks at the bottom line and where student retention is more important than student success. As a historian (and liberal arts in general) this has been a disaster for the profession as more temporary, non-benefited, (aka adjunct) positions are utilized to maximize profit. It does hurt the profession, but the students as well as they take classes from overworked teachers who get burnt out and disgruntled in the process.

I guess its too late to say "don't get me started". Anyway, no it does not have to be run like a business. The most important way to counter the profit driven university is to offer quality.

Jonathan Dresner - 10/28/2010

The Academy could be seen as a kind of diversified investment portfolio: there are short-term high-return holdings (professional/technical training) which sometimes crash, medium-term safe investments (law, writing, social sciences) which supply large middle-class needs, there's venture capital and long-term R&D which now and then pays off spectacularly but usually just adds some marginal returns now and then, and there's cultural properties, investment in aesthetic, historic and literary areas which has little intrinsic value but which nonetheless retains value well, appreciates over time and gives the investor both pleasure and cultural capital.