In the few years I have been president of Gutenberg College, I have slowly come to an important realization about higher education: Most of the other institutions of higher education are businesses. This has come as a bit of a surprise since, on the face of it, universities and colleges do not appear to be businesses. They look like nonprofit organizations devoted to their educative missions. Under the surface, however, and in fundamental ways, their missions are subservient to their business goals. While students and families are understandably interested in purchasing the product offered by these businesses, they should understand what they are buying—and what they are not.
By “business,” I do not mean that these universities and colleges are profit seeking. I mean that many colleges and universities have adopted the attitudes and mindset of a business, for instance, the following:
- Businesses structure their operations around the most efficient means to earn profit. Businesses may also have other goals, but for the large majority, these goals are subservient to profit. So, for instance, a business may have the goal of excellent customer service, but this goal is a means to an end: profit.
- Businesses are market-oriented. They try to respond to market demand and to influence that demand. They engage in advertising. They are constantly analyzing their sales and modifying their product lines to generate the most profit.
- Businesses are transactional with customers and employees. Relationships are for the sake of business, not the other way around.
Higher education shares all these characteristics. Colleges and universities describe themselves as nonprofit teaching and research organizations. And, of course, this is true. But fundamentally they are businesses with products: degrees. What takes the place of “profit” in higher education is growth and reputation. Their customers are students. Their sales team is Admissions. Their corporate executives are the chief administrators. To be clear, nothing is wrong with colleges improving efficiency or advertising. We at Gutenberg also do these things. The issue is goals. In a business, products and customers serve the profit interests of the business. In a college, it should be the other way around; a college should serve the interests of its students. But when students exist for the sake of the college instead of the college existing for the sake of the student, the college’s goals are inverted. Such an inversion has a profound impact on all aspects of higher education.
Numerous telltale signs reveal this business orientation. Consider costs. In an article about the rising cost of college, the New York Times reported, “while the total number of full-time faculty members in the C.S.U. [California] system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183.”1 The growth in numbers of administrators is coupled with growth in salaries and bonuses. A report on salaries in The Washington Post said, “What higher education is doing is mirroring the behaviors of the corporate world.”2 Some of this administrative growth is no doubt due to changes in state and federal regulation and oversight—but not all. Most is due to the increasing business orientation toward advertising, non-academic services, alternative revenue generation, and strategic planning. The rise in costs of higher education has far outpaced inflation, but those increases have not improved the education.
Campus construction also indicates a college’s business orientation. The University of Oregon, for instance, has been engaged in major building projects for at least twenty-five years without a break. But few of these building projects improve the teaching of foreign languages, for instance. They are more like the leather seats and stereo systems in upscale cars than the engines or suspension systems. They increase the UO’s curb appeal and enhance brand desirability to attract students and increase market share.
Consider also how reputation is measured in higher education. What makes one school a “good school” and another second-rate is largely based on nebulous cultural beliefs circulated by word of mouth. The complexity and variety of institutions makes it difficult for a student or family to make an independent, informed judgment. Students and parents are left in a position similar to that of a car buyer trying to compare the mechanical quality of Ford and GM engines. In both cases, reputation is a decisive factor, and reputation is cultivated through advertising and brand awareness. Winning a PAC 12 football championship is probably one of the best means of obtaining growth and reputation because it enhances the brand.
Colleges and universities exhibit a wide variety of other business orientation indicators as well. For instance, they are ever broadening their degree and course offerings to cater to consumer demand while abandoning a core curriculum in liberal arts. Student consumers purchase the degree “product” because of its usefulness in the marketplace. Academic demands on students are curtailed to improve the “customer experience” at the expense of learning. Faculty and administrators are often hired and promoted for their potential to improve reputation and growth (profit), not for their educative benefit. Athletics is an enormous independent subsidiary corporation providing income and advertising, not an activity to enhance health and build character. Student retention is pursued as a key indicator for college ranking, not with the good of the student in mind.
The business model has “worked” for many institutions. Colleges and universities devote resources and talent to increase applications and reputation, and they make gains in these areas. But in the process, central, traditional goals of college have been devalued. To help students mature in character and wisdom, to help them gain an understanding of themselves, to help them know what is true—these are the casualties of business. A college’s proper business should be serving students. This is the model that Gutenberg subscribes to. For, as former president David Crabtree has said, “A student is not a customer. A student is a soul. And a soul is a precious thing.”
1 Campos, Paul F., “The Real Reason College Tuition Costs So Much.” New York Times, April 4, 2015. Accessed March 28, 2019. https://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html?_r=0.
2 Svrluga, Susan, “As college costs keep rising for students, so does presidential pay. Could that change?” The Washington Post, Grade Point blog, January 5, 2018. Accessed March 28, 2019. https://www.washingtonpost.com/news/grade-point/wp/2018/01/05/as-college-costs-keep-rising-for-students-so-does-presidential-pay-could-that-change/?noredirect=on&utm_term=.385e4f18085e.
This article first appeared in the Spring 2019 issue of Colloquy, Gutenberg College’s free quarterly newsletter. Subscribe here.