Published on 2012/07/06

Should Universities Be More Business-Like?

When the University of Virginia’s Board of Visitors voted to oust President Teresa Sullivan in early June, the debate over business-style management in higher education was brought to the fore once again.

According to Zinie Chen Sampson’s story in the Associated Press, they voted to remove Sullivan because some members thought she did not respond quickly enough to shrinking state funding, and was a step behind in developing more online options. In fact, the university’s Rector Helen Dragas said in a statement before the vote that Sullivan’s lack of overall strategic plan was a major factor in their loss in confidence. Critiques from other quarters noted a need for risk-taking and “strategic dynamism” according to Sampson.

However, the board voted unanimously to reinstate Sullivan last week after she received ardent support from the Faculty Senate, college deans, faculty, students and alumni, who condemned the board’s decision. The major question this raises is whether colleges and universities should be run like businesses.

“Universities are not corporations. Universities are nonprofit, public entities that have missions of teaching, research and public service,” Matt Hedstrom, an assistant professor of American Studies at the University of Virginia told Sampson. “Those are not the same mission as a corporation. They also don’t have the same cultures and governance. They’re much less hierarchical.”

Other universities are certainly moving in a more business-minded direction. Purdue University recently named Indiana Governor Mitch Daniels as its president. Governor Daniels has been outspoken over instituting performance metrics like degree attainment and has cut major chunks from the state’s higher education budget, but his business-minded resume, including his experience as White House Budget Director and as an executive at Eli Lilly, a pharmaceutical company.

The University of Texas brought in a committee of executives from Dell, Boeing, Accenture and a number of capital-management firms to develop strategies for the effective use of the university’s $2.3 billion budget.

According to the President of the American Council of Trustees and Alumni, Anne Neal, there have been major shifts in the higher education landscape which demand a new management style from institutions.

“This is really a question of changing ways of doing business,” she told Sampson.

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