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Universities as Commercial Enterprise, an Ongoing Case Study

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This essay on the current experience at the University of Michigan published on Inside Higher Ed, made the rounds last week. Titled “Corporate Values”, it includes several quotes that speak directly to my ten year experience at my current institution. To wit:

America’s public research universities face a challenging economic environment characterized by rising operating costs and dwindling state resources. In response, institutions across the country have looked toward the corporate sector for cost-cutting models. The hope is that implementing these “real-world” strategies will centralize redundant tasks (allowing some to be eliminated), stimulate greater efficiency, and ensure long-term fiscal solvency.

As I’ve argued in the past, the experience in Britain serves as both a model and a warning to my colleagues in the United States. Decisions are taken purely on a revenue-stream criterion. If eliminating one undergraduate program will allow resources to be shifted to another, thus resulting in a marginally enhanced revenue stream on a per-student basis, then such a move has appeal. Those of us providing the “content” are treated as interchangeable parts, have superficial input in decision making (which is typically window dressing as one of many “stakeholders” in the institution, designed to assuage concerns of consultation). Management decisions are conducted with no transparency, and handed down as edicts. There’s no entertainment of feedback, let alone constructive criticism.  Again this resonates:

They frame departments as “customers” of centralized services, perpetuating the illusion that the university can and should function like a market. This premise devalues the local knowledge and organic interactions that make our units thrive. Indeed, it dismisses any attribute that cannot be quantitatively measured or “benchmarked.” Faculty members who reject these models quickly become characterized as “change resisters”: backward, tradition-bound, and incapable of comprehending budgetary complexities.

Adopting the corporate model is analogous to Margaret Thatcher’s “There Is No Alternative” policy prescription of neo-liberal economics in response to “globalization”, however one defines the concept.

Of course, if there’s a need for “retrenchment”, “streamlining”, “doing more with less”, or whatever cliche du jour masks the reality of “layoffs”, it’s never the fault or responsibility of senior management. Rather, we need to continually reposition the institution in the face of a dynamic “sector” in order to retain our position as a world leading university. More recently, the fault is placed solely at the feet of the government, and the policy to eliminate central government funding for higher education at once, and allow for the trebling of tuition fees. The degree to which tuition was increased was left up to each institution. Of course, all but a handful increased tuition from around £3000 per year to the maximum of £9000, mine included. I’m not arguing that the universities are to blame for government policy, which simply did in one day what has been a gradual erosion of state support in the US for the past decade or two. However, I think that there might have been an opportunity to price ourselves marginally lower than the overwhelming majority of our “competition”, thus limiting the need for the ongoing layoffs which have characterized my institution since 2008. A google search of my institution and redundancies finds stories every year between 2008 and 2012, including two on our own web page celebrating the lack of resorting to compulsory redundancies in 2009. The VC is quoted: “I consider that the University is now much better placed to achieve its strategic objectives and vision to become a first-choice first-class university serving the city and region and I am confident that we can now look towards a bright and sustainable future.”

That was 2009.  After I wrote most of this post yesterday morning, an email was sent to staff at noon outlining the need to “reshape our academic offer” which will “drive our investment strategy with investment in some areas, and divestment in others, which we think may include some redundancies”. Said email was also couched in the usual fuzzy business speak about sustainability, strategy, and the need to be “fleet of foot”.  Revealing here is, to my knowledge, that this is the first time one of these memos from senior management explicitly admitted that there might be layoffs. It’s already hit the local media here, and here. So, in addition to 2008 through 2012, we can now include 2013 on the Google count of media stories about redundancies at my institution. I think we did not have any compulsory redundancies in 2009, but we did have over 200 voluntary redundancies during the “strategic review” from 2008-09.

Let’s look at that 2009 statement again:

“I consider that the University is now much better placed to achieve its strategic objectives and vision to become a first-choice first-class university serving the city and region and I am confident that we can now look towards a bright and sustainable future.”

Now let’s compare it with that released yesterday:

“From January 2014, we will be commencing the combined Academic and Research Review with the objective of shaping a new and sustainable academic business model.”

Bluntly, a university run along its interpretation of a commercial model will feature employment insecurity as a daily reality. Again, every year since 2008, employees at my institution, be they academic, professional services, or support staff, have faced the prospect of getting sacked.  Maybe this is understandable if it only has to happen once. However, either the original plan failed — and we have to call this a failure as that bright and sustainable future didn’t last very long at all: during 2011/12 a large number of professional services staff were made redundant, and now we have the prospect of sweeping redundancies among academic staff (in addition to what my colleagues in sociology are experiencing right now). If the original plan did not fail, then this is the new normal. And again, it’s not only my institution. A google search reveals a dozen or so institutions in England that are experiencing similar chaotic insecurity in search of the elusive business model that is both sustainable and bright.

Yet, a university is not a business. We do not have shareholders, nor do we sell a product. Universities are a public good, which add value to individuals and society writ large. Assuming that this is the new reality, why in hell would one want to pay the opportunity costs involved in earning a Ph.D. in order to work in an industry where your job security isn’t that far removed from Dominos Pizza, and where your pay is significantly lower than a similar position in the private sector?  Why go into this “sector” when the fickle year-to-year interests of students, or the shifting business models of senior management, can render your contribution redundant?

The flyer attached to this post was sent out by the local branch of our union last week, and those potential redundancies in question are in Sociology (not to be confused with the prospect of additional redundancies released yesterday). The union of course over-states the case; what I’ve heard indicates total redundancies expected by the university can be counted on two hands[*]; regardless, we’re dealing with academic positions held by human beings, and it’s not their fault that the university in general and their subject in particular is in this situation at this point in time. The School of Government is barely four months old, and our Director was hired from abroad and promised a two year grace period to ensure an operative business model. However, after he accepted the position, Sociology were lifted from a different faculty entirely and added to the new school. Sociology used to be in the same school as my department, then in 2009 the social sciences were disaggregated and sent off to three different faculties. And now at least sociology is back with us, for the time being at least. This is a problem created by the complete lack of institutional stability, or as we joke, a Mao-esque permanent revolution. I’m in my 11th year at my institution. Since I was hired, my department has been part of two faculties, was an independent department before those unites were amalgamated into “schools”, of which we’ve now been in four, have had five Heads of School, and our fifth department chair in that period has just retired. Between the seemingly permanent threat of redundancies and the reality of annual institutional reshuffles, it’s amazing that we’re able to get any work done with even a modicum of positive morale, which is especially critical when an important aspect of one’s job is facing students nearly every day during term.

Again, as I’ve written in the past, I don’t believe the entire manner in which my institution responds is down to poor or uncaring management specific to my institution. A part of it is the corporate world view adopted by those running this institution specifically, and most others across the UK. The institution does not exist as a public good, for the creation or dissemination of knowledge, but rather as a business, where success is measured in profit (or loss) and revenue streams. Indeed, it’s going to get worse before it gets better; I learned yesterday that from 2015 there will no longer be a cap on enrollment at any university. What this means for us is our neighbors up the road on the A-38, with a Russel Group reputation and an international ranking significantly higher (at 148) than our 300th, will be able to recruit the level of student that is our bread and butter, for the same tuition fee. As there’s too much pride at stake for senior management to lower our tuition fee, the email sent out yesterday has a compelling logic as a result of the latest restructuring: wholesale scrapping (divestment) of departments, and concentrating on the few subjects where we are competitive with Russell Group institutions. Universities, aside from the handful at the very top of the reputation tables, will specialize in a mere handful of subjects. If this comes to pass, they really won’t be universities any longer, at least not in the classic sense the way the concept is understood.

Three further paragraphs from Michigan essay deserve quotation:

The absence of consultation with regard to the plan is particularly galling given that academic departments previously have worked well with the administration to keep the university in the black. Faculty members are keenly aware of our institution’s fiscal challenges and accordingly have put in place cost-cutting and consolidating measures at the micro level for the greater good.

Whether or not the collective protest initiated by a critical mass of faculty will result in change or reversal remains to be seen. Nevertheless, the past few weeks have been a wake-up call. Faculty must educate themselves about the basic fiscal operations of the institution in these changing times and reassert their leadership. Gardens, after all, require frequent tending.

Otherwise, we remain vulnerable to opportunistic management consultants seeking to use fiscal crisis as a source of profit. Public institutions that remain under the spell of misleading corporate promises will ultimately save little and lose a great deal.

It’s not too late for my American colleagues to ward off some of the excesses of commercialization that are negatively impacting the British system. For starters, the system of governance is still significantly different. American professors have considerably more autonomy, there remains shreds of the model of shared governance, and tenure. Over here, we do not have those advantages. We are fully corporate, and indeed, the onus for recruitment (of students) is largely up to individual programs. (Over one hour of our two hour school faculty meeting yesterday afternoon was spent on ideas surrounding how to enhance recruitment). Yes, there are faculty and even university level initiatives, and “open days” are organized along those lines, but if there is a decline in recruitment for any given program, senior management places the blame on the academics in that program. If we were an automobile company, each of us would be expected to contribute to the literature on advancing fuel cell and hybrid technology, yet also design, build, and sell the car. Yet, to strain the analogy, if gas prices suddenly double, those of us responsible for SUVs all get the sack.

At least we were given a shred of feel good phraseology: “We’re a successful University which has dealt with the volatility of the higher education sector with confidence in who we are and what we do.” However, I find it astonishing that we can continue on “with confidence” when our reality has been the threat of being made redundant for five years running.

I should add that like my colleagues, I take pride in my job, my department, and my university, but it would be nice if the “sector” returned that favor.

[*] As I now occupy precisely zero administrative positions, following nine straight academic years of holding at least one, and for several years two, I’m out of the loop, hence the reliability of that comment should be treated as not 100%.

[**] An unintended consequence of the relatively new “branding” of my institution, conducted several years ago and requiring the help of two private consultancies, is the scope of creativity allowed to precede the “With Our University” to fit different contexts. Let hilarity reign.

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