The Corporatization of Higher Education – Business Models for Academia

16 February 2012

Activism, Effective Living

Effective Living > Education

Summary. The partnership between corporations and higher education can be problematic.

Donor Alliances. Historically, buildings and monuments on college campuses would be named after people who had made a significant academic contributions to the institution. Today, buildings, benches, classrooms, roads, and other facilities are named after those who contribute financially rather than academically. Some believe this places a greater emphasis on money than educational accomplishments and may send the wrong message to students. There can also be a potential conflict of interest created if an academic institution won’t rigorously challenge corporate donors on the ethics and sustainability of their business practices.

Emulation. Enamored with the financial achievements of business, educational institutions often seek to emulate business approaches to operations. What’s problematic in this is that businesses often will seek to skirt environmental best practices and ethical labor standards to create maximum profit. Educational institutions are supposed to instill ethics and social values in young people so they make ethical decisions later in life even if those decisions prove not to be the most profitable alternatives. As academic institutions begin to outsource, downsize, and hire consultants to look for ways to be more efficient, the heart and soul of educational institutions can quickly erode as they embrace purely bottom line thinking and assembly-line efficiency.

Supplier Contracts. When educational institutions sign contracts with suppliers, this creates potential conflicts of interest. Often, bids are evaluated based solely on bottom line efficiency. Other factors such as local sourcing, labor practices, environmental impact, and overall corporate ethics are left out of the decision process. Rather than choice and diversity of products and services, contracts limit institutions and also give unfair advantage to those selected. To the extent that non-profit tax-payer funded institutions are giving more than they are receiving, these partnerships funnel tax payer dollars to support corporations in a manner similar to TIFs. For example, the University of Iowa has a contract with Coca-Cola. Businesses only establish relationships when they are profitable — when the business is gaining more than it is giving. That’s simple economics. Presumably, Coca-Cola will receive an immeasurable value by having their brand exclusively scattered across campus, as a kind of exclusive advertising to a captive audience who have no “opt-out” alternative but to see that brand every day in their public places. The opportunity to create brand loyalty among young people, and remove their freedom of natural brand selection (to possibly choose a more appealing product for them), is enormously valuable. Apparently Coca-Cola pays $50,000 a year for the opportunity to be the exclusive supplier to the University of Iowa. [source]¬†Despite being aware of the conflict of interest issues and the problem of limiting choices, most academic institutions will give in when paid enough.

“We understand that not everyone likes to be limited in their choices and that some people question the appropriateness of such a business deal between an academic institution and a corporation, but we are getting some tremendous benefits.” ~ University of Iowa Spokesperson [source]

Triple Bottom Line. Recently some businesses have begun expanding their decision process to include quality of life factors, such as ethical labor standards and sustainable environmental practices. While sometimes ethical choices reduce overall profitability, the triple bottom line mentality is a different kind of compass that guides businesses to make choices that are good for society even when it might cost a little more. For more information, read our article on the triple bottom line.

Lessons From Business. The business world is driven to innovate, not because of a passion to learn and expand the horizon of knowledge, but because of a desire to survive in a competitive marketplace. For similar reasons, businesses emphasize the importance of selling quality products and offering exceptional customers service. It’s not necessarily because of a passion for excellence and treating people well, but because of a desire to dominate the market.¬†We’re told that smiling, even when we’re not happy, can make use feel better. Similarly, businesses that engage in ethical-emulation eventually can evolve into ethical organisms — at least the potential exists for this to happen.

Academic and Business Operations Compared. The chart below shows some basic differences between characteristics of business and those of academia.

 

When Business Borrows from Academia. It’s actually possible to run a business using academic standards for operation, as the quote below testifies.

“I’ve been running my business for decades using an academic model of transparency, cooperation, collaboration, sharing information, and using quality of life as my bottom line. It’s worked out great.” ~ Greg Johnson

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About Gregory Johnson

Greg Johnson is a freelance writer in Iowa City and also the founder and Director of the ResourcesForLife.com website. He also manages IowaCityWebDesignArtist.com and many other topic specific websites.

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