Abstract
Strategic management as a field of study is part of the curricula at most business schools. Consequently, these schools should practice in-house what they preach for the business world. Yet, public university administrators might argue that the vast majority of universities and business schools are organized as not-for-profit organizations and, therefore, the use of strategic management techniques and tools is inapplicable for developing and growing these types of organizations. While it is true that the economics of the higher education industry differs substantially from the economics of, for example, the banking or the oil industry, these differences—once they are properly understood—do not preclude the use of strategic management techniques in universities and business schools.
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- 1.
Some legal systems do make a distinction between non-profit and not-for-profit organizations (like Germany), while others do not (like the US and the UK, where the two terms are used interchangeably). In Germany, non-profit organizations must not or do not want to make any profits (because of their mission statement or members contract). Not-for-profit organizations (like cooperatives) are allowed to generate a financial surplus. However, making profits is not the primary objective of these organizations. There are other objectives besides generating profits such as benefiting a special group of people or furthering a particular cause that the organization aspires to achieve.
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They (2003, p. 289) write: “Can any of these conclusions inform strategic management in business? Universities seem so different from corporations, as has been noted in a few places. Yet delve into the knowledge work of corporations—the research laboratories, the design studios, and so on—and you find similarities, with corresponding implications for strategies there. Indeed, delve into the many rather loosely coupled corporations, such as 3 Ms and the Hewlett-Packards, and you find that a number of the conclusions here have application there: porous boundaries that let environmental forces in every way, accompanied by considered venturing, devolved strategists and fragmented strategies, an enormous amount of micro changes with relatively little quantum change, and so on. To the extent that this describes their strategic behaviour, so much that has been written about strategic management, with its focus on the planners, the chief executive as ‘architect’ of strategy, and the management of change as driven from the ‘top’, becomes questionable. Certainly all the hype about turnaround and revolution needs to be reconsidered in such contexts. Perhaps these companies change best from the inside out, at their own pace, rather from top down, frenetically.”
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Franck and Schönfelder (2000) point out the credence good character of educational services and the market failures resulting from the asymmetry of information between students and professors about the true quality of education delivered. There are, however, other conceivable ways that we will point out here to significantly mitigate this problem than the type of contractual arrangement discussed by these authors.
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Navarro’s (2008) article entitled: “The MBA Core Curricula of Top-Ranked U. S. Business Schools: A Study in Failure?” documents how little content differentiation even the best business schools in the US. have achieved.
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Lorange (2008, p. 13) also argued in his book that there is sufficient room for business schools to pursue differentiation strategies: “Indeed, in this book, I argue extensively for what might be seen as a viable alternative to the traditional US-Based organizational form. This is because I believe the traditional, axiomatic, discipline-based research to be less valid than it was before and that the interplay between best practice—the prescriptive knowledge coming from the best firms—and research—the propositional knowledge coming from professors—can give rise to an alternative model of academic value-creation. And this alternative model can perhaps challenge the classical, often US-based, business schools.”
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This is in line with the AACSB which “(…) require that colleges obtain input from stakeholders such as administrators, faculty members, students, and employers when developing the mission.” See Palmer and Short (2008, p. 456).
- 8.
Pfeffer and Fong (2004), who work at Stanford University and the University of Washington, respectively deliver a critique of the current dominant organizational mission of US business schools and offer an alternative. They write: “(…) in return for the ability to obtain huge and growing enrolments and large donations, schools have presented themselves and their value proposition primarily, although certainly not exclusively, as a path to career security and financial riches” p. 1503. “In a related but somewhat different role, business schools might take the lead in making management a profession. This would entail articulating a set of professional values and responsibilities and developing standards of professional conduct and even sanctioning mechanisms for those who violate professional standards of organizational or business management. (…) Unfortunately, there is little evidence that business schools are enforcers of professional standards and norms of conduct. In a world in which economic success is frequently taken as the measure of value and merit, there are few sanctions coming from business schools for ethical malfeasance and there is not much evidence of what one might wish or expect in a self-policing profession” p. 1504.
- 9.
See http://trendwatching.com/trends/TRYVERTISING.htm first published April 2005, and http://trendwatching.com/trends/trysumers.htm first published March 2007.
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Pusser and Turner (2002: 6–7) write: “Glaeser (2001) argues that in the face of weak governance structures, colleges and universities have evolved to resemble “worker cooperatives,” representing the preferences of faculty with particular emphasis on the institution of tenure and the rise of the importance of research as a faculty activity. Yet, while this model may have characterized the nature of governance in higher education through the late 1970s, when Jencks and Reisman wrote the Academic Revolution, the revenue shortfalls of the last three decades brought about yet another transformation in academic organization. To varying degrees across colleges of different types, the locus of control has shifted from faculty to professional administrators (Slaughter and Leslie, 1997).”
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Rudolph, D.W., Steffens, U. (2013). Strategic Management for Growing Business Schools. In: Altmann, A., Ebersberger, B. (eds) Universities in Change. Innovation, Technology, and Knowledge Management. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-4590-6_10
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