How can educational institutions overcome the pitfalls of business models to manage academic goals through effective restructuring?

Abstract

Restructuring educational institutions took on an executive approach based on the principles of business administration to counter budget deficits. Historic evidence shows various factors led to such restructuring options. However, despite immediate cost savings, the detrimental effects of using business models to manage colleges and universities were aplenty. In current times, the institutions most impacted by funding cuts and changing market and technological trends are the liberal arts colleges and universities. An analysis of liberal arts institutions’ choices to restructure, their drivers, and outcomes seemed to follow the same historic pattern as seen in the literature. We thus extracted best practices from the list of Liberal Arts Institutions, other publicly available reports on restructuring and from the literature on organizational structure, culture, and change models. Based on the findings we put forth a series of recommendations to help educational leaders overcome the pitfalls of adopting business models and managing their institutions effectively and sustainably through value-driven restructuring practices. The findings show that over-reliance on a commercialized view of colleges, which sees students as customers and education as an industry, has destroyed the ethos, logos, and pathos of academia, creating more harm than benefit to both students and faculty and eventually to administrators, staff, and society. There doesn’t seem to be a perfect model that fits every institution. But the institutions that remained successful were those that retained their essence, had specializations, and a unique character, like small class sizes, limits on enrolment, or special research investments and dedicated faculty. The paper’s key contributions include the following: a historical analysis of restructuring and its comparison to present-day liberal arts universities and colleges; best practices that can be easily adopted; a collection of sample models from publicly available restructuring reports; and the process of adopting business models effectively and efficiently. It provides several practical self-check lists that will help educational institutions monitor and manage their operations.