When Universities Pretend to Be Businesses

Since at least the early twentieth century, universities have flirted with America’s penchant for “running things like a business.” But like government, non-profits, and other non-businesses that try to be something they are not, universities’ scattershot copycatting of business practices creates new harms to the institutions and the people within them. 

“The university is a business concern” only so far as it has “fiscal affairs [and] office-work incident to the care of its material equipment,” Thorstein Veblen wrote in 1918. But for “the everyday work of higher learning, little of a hierarchical gradation, and less of bureaucratic subordination, is needful or serviceable.” Since then, universities have expanded in every direction and along every dimension, as a good business would. Their vertical structure, though, remains much the same.

“The university is very flat compared to the org chart of a company. There’s the faculty, the dean, the provost, the chancellor, and the president. It’s a very short pyramid,” Ann Marie Flynn told the Niagara Conference on Workplace Mobbing.

Flynn was the chair of the chemical engineering department at Manhattan College (now Manhattan University). She wonders if her career might have withstood her workplace mobbing if the university org chart had some semblance of proportion.

“The only way you can stop a mobbing is from the top down,” she said. “I’ve seen people try to stop it from the ground up as a grassroots campaign. It makes a lot of noise. It seems successful within that campaign. But it needs the person right above them to say, ‘Stop. I’m not buying it.’”

Flynn’s appeals got nowhere with the class of administrators that Veblen described as “graded subalterns, who share confidence of the chief in varying degrees, but who have no decisive voice in the policy or the conduct of affairs of the concern in whose pay they are held.” 

“If you can’t get past the dean, what do you do?” she asked. “There’s only a couple levels. You think, ‘I didn’t explain it right. He just didn’t understand what I said.’ You go to HR and they’re not getting it either. Then you go to the provost, but by now you have the moniker of a troublemaker. You go to the president and ask directly, ‘Are you trying to get rid of me?’ ‘No, no, you’re a rock star.’” But no action backs that reassurance, and the mob is free to finish the job.

Flynn points out that in an actual business, “there are managers, supervisors, and vice presidents all over the place. You’re bound to find one with cojones.”

Such people can better wield their influence within an actual hierarchy. But their influence comes from the connection they feel toward their colleagues, students, and the institution—not from anything they sign.

Veblen wrote that “under the stress of businesslike management in the universities the drift of things sets toward letting the work of science and scholarship to the lowest bidder, on a roughly applicable piece-wage plan. The result is about such a degree of inefficiency, waste and stultification as might fairly be expected.” Another result is the evaporation of the collegial relationships that preclude elimination-by-mob. 

Dr. Kenneth Westhues is a co-founder of the conference and wrote The Envy of Excellence: Administrative Mobbing of High-Achieving Professors in 2005. He described how university life used to be guided by covenants rather than contracts. On the few occasions when faculty members had to sign something official, it was “too brief, too open-ended, too demanding of trust, to be worth much as a contract.” Covenants relied on a “relationship of trust, governed mostly by unwritten rules [and] reciprocal loyalties.” Yet it all held together for decades, if not longer: “a modus vivendi was achieved, sufficient to let the college’s work proceed.” 

After the conference, he said, “Academic life has grown emptier, merely contractual. A market mentality has penetrated into more and more aspects of life. When everything has a price, nothing really matters.”

Each misapplied business practice further hybridizes these institutions. Universities today are even more the “febrile breeding grounds [for] something scarier and more elemental than occasional instances of professorial misconduct” than they were when Westhues wrote in 2005 or when Veblen counseled universities to maintain their unique identities. 

“Why universities?” Flynn asked, summarizing my question back to me. “Because you get away with it.”

Management programs are starting to recognize the inaptness of applying all things business to non-businesses. Programs and degrees in non-profit management, sports management, and public administration recognize that not everything with a corporate structure is a business and cannot be successfully run as one. Successful organizations, like successful people, study widely and apply judiciously. Unfortunately, this lesson seems to have eluded the university itself. 

George M. Perry is a sports performance coach, sports businessman, and writer. Before going into the sports industry, he was a submarine warfare officer in the United States Navy and briefly attended law school.