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Higher Education and the Balance Sheet: An ECU Professor Examines the Debate

By Karen Shugart

Academics often chafe at the notion that higher education should operate more like a market-driven corporation, but many politicians, taxpayers and even university trustees beg to differ. With state budgets tight, calls efficiency and balance sheet-driven management aren’t likely to die down anytime soon.

A recent three-volume book, “The Business of Higher Education” (Praeger), examines how business models affect higher education. Edited by David J. Siegel, an associate professor of education leadership at ECU, and John C. Knapp, Mann Family Professor of Ethics and Leadership at Samford University, the three-volume text brings together a range of business and academic perspectives. By e-mail, Siegel answered a few questions on the subject.

Why do you think so little research has focused on the application of business models in higher education?
For starters, there is something of a revulsion factor at work. The very idea that higher education can – or should – be cast in business terms is patently offensive to many in academe. As Gordon Gee, President of Ohio State University, put it in the foreword to The Business of Higher Education, “Teaching that profoundly changes lives and research that expands the boundaries of the knowable universe cannot be reduced to dollars and cents.” Meanwhile, pressures mount daily for colleges and universities to be defined, operated, and valuated as business organizations, suggesting that much of the public sees us not as a distinctive social or cultural institution but as just another version of a corporation. A good deal of the resistance to research and experimentation, then, can be read as a rejection of the proposition that this is a legitimate way to think about the academy.

A second reason, related to the first, is that there is a long history of uneasy relations – including outright enmity and suspicion – between the education and business sectors. The two have been pitted as natural enemies, or at least as possessing incompatible value systems. Predictably, this has had the effect of causing many academics to question whether there is anything to be learned from our counterparts in the private sector. The skepticism is reinforced when we see examples of business practices being used on campuses in a clumsy, heavy-handed fashion that doesn’t appear to respect or even to take into account unique academic traditions.

Finally, interdisciplinary approaches, which are vital for a full consideration of the topic, tend to be under-rewarded in most tenure and promotion schemes. Business research, not surprisingly, has focused almost exclusively on the for-profit setting, although there is a rapidly developing niche in the non-profit or “social enterprise” arena. Likewise, few scholars of higher education (as a field of study) have shown much interest in strategy, management, and other elements of organizational behavior. Consequently, too few of our best academic minds are investigating what is arguably the central challenge facing higher education: the relentless push to be more like business. There is enormous potential for truly interdisciplinary thinking, theorizing, and research in this domain.  

Does this relative lack of research present problems, particularly in light of state budget crises and cuts to education across the country? How?

The lack of disciplined inquiry in general is problematic, in the sense that it denies opportunities for a clearer understanding of the enormous pressures we face and the response options we might utilize. Few of us fully appreciate the larger context in which higher education is being asked to embrace new ways of thinking and behaving. More and more stakeholders are demanding more – and different – outputs of our colleges and universities: cutting-edge research, economic development, workforce preparation, and public accountability primary among them. At the same time, we are expected to reduce costs, increase productivity, hold the line on tuition, generate revenues from new sources, and realize greater efficiencies, all in a climate of heightened scrutiny. Scholarly analysis is a critical means of educating ourselves about these forces and mobilizing the academic community to take action with respect to them.

As just one example, Cary Nelson, current president of the American Association of University Professors (AAUP) and a contributor to our project, has called attention to the increasing use of part-time – or contingent – faculty appointments in American colleges and universities. In fact, non-tenure-track positions now account for nearly 70% of all faculty appointments in postsecondary education. Nelson and others argue that this “casualization” of academic labor threatens the student learning experience and several of our most cherished institutional values, including academic freedom and shared governance. The AAUP is actively engaged in trying to reverse the trend toward contingency, and it is a clearinghouse of sorts for studies, commentary, and best practices designed to inform and activate campus coalitions and leaders.

Whatever one thinks of contingency or of the AAUP’s methods in particular, the key point is that a robust program of scholarship and communication serves to inform the academic community and the wider public about the critical issues that affect higher education. Lean economic times intensify the need to study and discuss proposals or practices that may erode academic autonomy even as they solve pressing financial problems.

Considering the criticism (and, in some cases, investigations) of some for-profit colleges, do you foresee much backlash to market-focused approaches to education?
The demand for some form of postsecondary education is expanding far beyond our capacity, and new suppliers of education and education services have arrived on the scene to provide what historically has been the province of traditional institutions. Market-focused approaches to education, of which for-profit colleges and universities are a prime example, continue to be a source of discontent for many in academe, despite the reality that we have always operated in one market or another. That is, we have competed in labor markets for faculty, in “consumer” markets for students, in philanthropic markets for private dollars, and in other markets for various types of support.

We may not always be comfortable thinking of these as markets, of course, but they fairly describe the environment in which we compete for valuable resources. And regardless of our aversion to them, we find ourselves having to adapt to market conditions while preserving what is distinctive about our institutions.

It seems to me that the source of backlash to any market-based approach is the concern that we will simply let external judges dictate what we do as institutions, that we will cease to steer by our own lights and instead blow with the prevailing winds. We require external support for research, for example, but we don’t want our research interests and agendas to be set solely on the basis of their commercial prospects. We understand that some academic majors are more appealing to corporate recruiters than others, but this should never be the determinative factor in the value we place on a discipline. Obviously, we have to be attentive to external constituencies in order to receive critical support and contribute to public welfare, but we also need the fortitude to stand up to outside groups when our integrity or our historical commitments are at stake.

Do you think we will begin to see more research concerning the business aspects of higher education?

Given the rising public hue and cry for institutions to be run as businesses, there is little doubt that research and scholarship – investigation, analysis, interpretation, criticism – will increase in an attempt to make sense of this phenomenon. It is imperative that we continue to question the assumptions and inspect the claims that are driving much of the popular discourse on the topic. In the best academic tradition, we need to adopt a spirit of rigorous self-examination. This includes questioning our own propensity to decry as “yet another example of the corporatization of the academy” any policy or practice we don’t like. Much of what we label as business models or methods has yet to be defined in a very useful way.

One of the things we discovered in planning the book set was that there are many ways to think about the business of higher education. Our contributors represent multiple academic disciplines and fields of study, and they come from higher education, business, and the policy arena. Moreover, they offer contrasting views on whether and how higher education and the public interest are ultimately served by the adoption of business thinking. This diversity of opinion and representation ensures that there are many voices weighing in on the subject and contributing to a more nuanced and rounded discussion. Despite the fact that our three volumes contain a total of 35 essays, we have really only scratched the surface; there’s much more to be said about this issue. We hope others will take up the mantle of thinking and writing from various disciplinary, functional, and sectoral perspectives.

This story appeared originally in the Jan. 29, 2010 issue of Pieces of Eight. An archived version of that issue is available at