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Reducing Higher Education Bureaucracy and Reclaiming the Entrepreneurial University

Part of the International Studies in Entrepreneurship book series (ISEN,volume 53)

Abstract

This chapter documents the worrying trend of increased levels of top-down policies that stifle universities’ innovativeness and autonomy. I highlight the bureaucratization of corporations and higher education institutions, and how this sclerosis results in a widespread sapping of individual initiative and innovation. The chapter next reviews regulation and bureaucratization in higher education with a special focus on commonalities and differences at two levels: university-wide and one sub-unit, the college of business. I describe successful case studies in anti-bureaucracy policies and practices across higher education at the individual, business unit, university, and other levels to highlight cross-level best practices in higher education, including calculating the present bureaucratic mass and administrative burdens of proposed changes, implementing technology solutions, leading change management efforts across all levels, and employing best practices in decision-making. I conclude with a discussion of research directions that will lead to theoretical, methodological, and phenomenological contributions.

Keywords

  • Bureaucracy
  • Business School
  • Decision-Making
  • Entrepreneurship
  • Higher Education
  • University

1 Introduction

A rich literature identifies how greater levels of regulation tend to thwart innovation and entrepreneurship (Bailey & Thomas, 2017), often conducted by scholars in business schools and economics departments. By comparison, there is strikingly little research on the effect of the rapidly growing set of regulations and sclerotic bureaucracy in higher education institutions. This gap is particularly worrisome since business school academics attempt to teach best practices in strategy and structure to the next generation of business leaders, and would want both their institutions as well as their students’ organizations to create and maintain effective, efficient, and entrepreneurial structures.

Bureaucracy is expensive in time, money, and other resources. As anthropologist David Graeber (2015) noted in The Utopia of Rules, in the history of the world, our present population spends the greatest amount of time on paperwork. And this bureaucracy is costly: since 2008, productivity growth has slowed 1.24% annually, even despite the “second machine age” with advanced robotics, artificial intelligence, and the Internet of Things. Bureaucracy is estimated to cost the U.S. economy $3 trillion annually and is “kryptonite for productivity” as individuals at the top of their organizations become more isolated, and consequently, their organizations become less responsive to external stimuli (Hamel & Zanini, 2020). The result is that many employees see themselves as powerless to shape their organization’s strategies, and become resigned to a lack of initiative and responsibility for anything beyond a very narrow role.

Higher education bureaucracy grows exponentially due to both external (e.g., increased regulation of universities, particularly at federal and state levels) and internal (e.g., a labyrinth of time-consuming, low-value-added internal administrative processes) forces. The costs of an astronomical expansion of academic bureaucracy are usually passed on to students, and reflected in the nearly 200% increase in college tuition and fees from 2000 to 2021, as compared with a basket of goods in which some product prices dropped (e.g., televisions by 100%) (see Fig. 1; Perry, 2021).

Fig. 1
figure 1

Price changes for select U.S. consumer goods and services and wages (2000–2021). Source: Perry (2021)

This exponential cost increase is a tremendous burden for students, and ultimately their families who often fund their studies, and also for taxpayers who indirectly support students’ federal loans. Moreover, these costs are often driven by top-down policies, which also stifle universities’ functioning, innovativeness, and autonomy. The costs partly reflect the growing set of full-time administrators within universities, as documented by scholars around the world, and depicted in Table 1. A longitudinal study of the entire population of Swedish universities reports that the number of higher education administrators grew by almost 200% compared to just 23.9% for teachers and researchers from 2001 to 2013 (a nearly tenfold difference), and administrators increased in number another 14% from 2014 to 2018 while the number of teachers and researchers actually declined (Andersson et al., 2021). U.K. analyses reveal that greater administrative intensity leads to lower student satisfaction, suggesting that students would prefer resource allocation to front-line rather than back-line tasks (Andrews et al., 2017). This study also indicates an overall inverted u-shaped relationship between administrative intensity and multiple performance measures such that some central administration is essential, but beyond a certain point, there are rapidly diminishing returns.

Table 1 Administrative growth in higher education

Administrative layers are created for a variety of reasons. For example, new federal or state legislation may require additional reporting that requires an administrative line, which can be fulfilled by either staff or faculty who take on administrative responsibilities. Many assignments once under the domain of faculty can be capably handled by staff. Administrative staff positions sometimes require a certain title to reach a salary range, and also to provide career mobility and trajectory. This phenomenon then manifests in higher salaries, as documented by Andersson et al. (2021): The salaries of Swedish universities’ group administration increased from 6% to 16% of total budget during the 2001–2013 time period.

2 Regulation and Bureaucratization in Higher Education

There are two levels of bureaucracy in higher education: (1) externally from regulatory policies from government and other accreditors, and (2) internally in each university’s processes for addressing these regulations and additional rules. Within the first level of bureaucracy, a university is subject to an array of regulations from federal (e.g., Department of Education, Department of State) and state (e.g., for public universities, respective Boards of Governors and other entities) governments, as well as accrediting bodies at university (e.g., regional for two- and four-year institutions: the Southern Association of Colleges and Schools Commission on Colleges [SACSCOC]; other categories include national faith-based and national career-related) and college/school programmatic (e.g., the Association to Advance Collegiate Schools of Business [AACSB] for business and accounting) levels. The second level, internal, captures universities’ unique processes. External and internal policies can be scaled from very poor in terms of heightening bureaucratic administration and bloat to very good in terms of reducing bloat and leading to greater entrepreneurial activities, and there is not necessarily a correlation between the two. The tendency toward inefficient practices at external and internal levels highlights a clear case against Mazzucato’s (2014) thesis of an entrepreneurial state comprised of highly functioning public bureaucracies. It is important to distinguish this bureaucracy from a pure measure of size. That is, economic theory suggests that size positively correlates with performance as greater size enables economies of scale and scope, thereby leading to lower fixed costs of services across a range of activities, greater purchasing power, more favorable fund rates, lower innovation costs, and an improved ability to recruit and retain managers interested in working for large organizations (Jung, 2013; Andrews et al., 2017). The focus of the bureaucracy is on the administrative intensity around empire-building, of which extant research indicates that some administrative intensity is necessary to synchronize the many activities in public organizations.

At level one of external forces, some regulations are necessary to keep university efforts on track for mutually desired outcomes (see Kelchen, 2018, for a review of higher education accountability efforts and results; and Hall, 2019, for an overview of higher education accreditation). One important set of indicators is the U.S. News and World Report’s (USNWR) annual ranking of U.S. state-level higher education, which focuses on students’ completion times for two- and four-year programs, in-state tuition and fee costs, and graduates’ debt burden. To achieve these outcomes, universities require some regulations around key functions such as admissions, financial aid, and registration. These regulations improve inter-state competition, e.g., resulting in Florida’s consistent USNWR #1 rank in the United States, attributed to improvements in three of five metrics: four-year graduation rate, average debt, and tuition and fees (Florida Board of Governors, 2021).

At level two of internal forces, universities have some discretion to shape policies to address the government and accreditor guidelines, but may also exercise considerable discretion in creating a range of policies that exceed any guidance. Universities are large, complex organizations that serve many stakeholders, and require significant integration across areas. Several studies document that university employees have strong prosocial motivations (McNeely & Meglino, 1994; Grant & Sumanth, 2009), and are often intrinsically motivated, particularly in helping students succeed. A recent study of five research-intensive universities describes how major organizational and governance changes to strengthen inter-university coupling, control, and coordination lead to both positive and negative consequences (Maassen & Stensaker, 2019). Zywicki and Koopman (2019, pp. 148–149) highlight that an “inability to measure results and monitor outputs effectively in a nonprofit organization gives an opportunity for academic administrators to pursue their self-interest at the expense of the enterprise, which they do by increasing the size of their discretionary budgets and staffing, much as government bureaucrats traditionally have been thought to do. Yet those developments present a puzzle, as the growth of the administration apparently has resulted in a siphoning off of resources from the university’s academic mission.” Ginsberg’s (2011) Fall of the Faculty argues that a considerable share of bureaucracy is unnecessary, often developed by career administrative bureaucrats with no teaching, research, or service obligations at their respective universities. These individuals with little exposure to the “front line” customer have a tendency to invent work for others, particularly faculty, in the university (Ginsberg, 2011), and the processes and outputs are very unpopular with faculty (Kallio et al., 2016). In a Swedish study, Andersson et al. (2021) noted that even when qualified administrators are hired, teachers’ and researchers’ time spent on administration does not decrease over this time period. One example of new internal administration is the appointment of a chief diversity officer (CDO), usually at the executive level in a vice-president position as a signal of commitment to a university’s diversity and inclusion efforts, particularly around faculty hiring. A recent study examined the effect of a CDO hire using a 15-year panel study of large four-year or higher institutions with high research standards: Carnegie Research 1 doctorate-granting universities with highest research activity, Carnegie Research 2 doctorate-granting universities with higher research activity, and Carnegie M1 with larger master’s degree-granting activity; all with 4000 or more students. Bradley et al. (2018) report that a CDO appointment does not substantially change the pre-existing, organic growth of underrepresented racial/ethnic minority tenure and non-tenure track faculty, faculty hired with tenure, or university administrator hires. By contrast, a meta-analysis of 18 research papers identified that underrepresented minority faculty in academic medical centers benefit from dedicated mentoring programs (Beech et al., 2013). A recent study of four major California research universities found that women and minority Ph.D. students in STEM fields were more likely to publish research at rates comparable to male majority peers if they were well prepared for their graduate courses, accepted by colleagues (both faculty and fellow students), and undertook their studies in well-articulated and structured Ph.D. programs (Fisher et al., 2019). Taken together, these findings suggest that universities should devote time and effort to building the necessary infrastructure in culture and quality content, rather than creating new administrative positions.

2.1 Regulations and Bureaucracy Specific to Business Schools

Within the higher education context, regulations come at both university-wide and sub-unit levels such as that of a particular college. This section considers one of the most revenue-enhancing and usually largest units on a college campus: the college of business. Business schools face regulatory pressures from both external and internal bodies. Externally, most high-quality business schools seek accreditation and reaccreditation from one or multiple accrediting bodies that specialize in business schools including the AACSB (for both the entire business school, and sometimes also the accounting school), the European Foundation for Management Development’s (EFMD) Quality Improvement System (EQUIS), and the Association of MBAs (AMBA). Although some universities pursue “triple crown accreditation” by all three entities, the leader is widely considered to be the AACSB, which has accredited 901 business schools in 58 countries (AACSB, 2021). In practice, many large business schools have at least half of a full-time employee (e.g., 20 hours per week full-time equivalent), usually, a staff member, who gathers and curates the required data, using a variety of published AACSB guidance, presently 55 and 67 pages, respectively, for the standards themselves and then the interpretations of these standards. This same employee might provide data for other reports such as the annual request for rankings such as Businessweek, Entrepreneur/Princeton Review (for entrepreneurship centers and programs), Financial Times, and the Wall Street Journal. The AACSB standards almost always exceed university guidelines, for example mandating that a greater share of faculty qualify as “scholarly academic” by holding the highest degree (Ph.D. or in some cases J.D. or Ed.D.) in their respective fields, and publishing regularly in peer-reviewed journals. The AACSB’s other categories are “practice academic,” “scholarly practitioner,” “instructional practitioner,” and “additional faculty.” Given the high number of rankings and the considerable attention directed at them, business schools must be most concerned with key ranking criteria such as graduates’ employment, salaries, value for money, and aims achieved, as well as demographic considerations such as the ethnic, gender, and international diversity of the students and faculty.

Business schools also face serious regulatory pressure internally from their university, often in the form of internal taxes to central administration. For most universities, the business school is typically one of the most profitable business entities on campus. Leaders in well-run business schools can create and run market-rate programs for executive education and graduate education that generate substantial profit margins. Table 2 depicts the varying tax rates for the market-rate graduate programs at several business schools within Florida’s state university system, from 8.6% to over 25%. The tax revenues are then deployed by the central university administration to fund underperforming or startup programs but can risk underfunding the high-performing program, particularly in competitive markets such as business education.

Table 2 Market-rate graduate programs in business schools: internal tax variance across Florida’s State Universities

3 Reclaiming the Entrepreneurial University: Leading Anti-Bureaucracy Policies and Practices across Levels in Higher Education

There are many promising practices that reduce bureaucracies and reclaim entrepreneurial activities in the higher education system. This section provides examples at federal, state, university, school, business unit, staff, and scholar levels, which may inspire anti-bureaucracy, pro-innovation practices at other institutions.

3.1 Federal Level

In the United States, the Department of Education consistently tracks a variety of higher education indicators through the Institute of Education Sciences (IES). One particularly useful website for aspiring college students and their families is the College Affordability and Transparency Center (CATC) (2021), which provides a suite of tools including a College Navigator, College Scorecard, Net Price Calculator, and College Financing Plans. These resources provide instant comparisons across universities for tuition/fees, financial aid, net price, enrollment, admissions, retention and graduation rates, outcome measures, programs/majors, service members/veterans, accreditation, campus security and safety, cohort default rates, and varsity athletics. Figure 2 provides just one illustration of the many CATC tools: the highest costs for net tuition from four-year private and public not-for-profit institutions. The net price captures the tuition and required fees less grant and scholarship aid.

Fig. 2
figure 2

College cost affordability tool: highest net tuition four-year private and public not-for-profit. Source: https://collegecost.ed.gov/affordability (data accessed September 14, 2021)

3.2 State Level

At the U.S. state level, many governments are addressing fiscal challenges by consolidating state institutions’ faculty, administration, and programs. The most recent example is the Pennsylvania State System of Higher Education (PASSHE) merging of six of the state’s 14 public universities into two entities: California, Clarion, and Edinboro united in the western, and Bloomsburg, Lock Haven and Mansfield together in the eastern part of the state (PASSHE, 2021). State-based public university consolidations, including the Pennsylvania proposal, are usually very unpopular with faculty and staff, and some other stakeholders (Whitford, 2021). PASSHE (2021, p. 1) expects tremendous benefits including, “Expand program breadth while maintaining essential residential character at each campus; Capitalize on existing strengths at all institutions; achieve more together than any one of them could do alone; Invest in new areas to serve new students who need our help, growing enrollment, driving regional economic development; Re-tool and strengthen supports for all students; and Reduce administrative costs investing savings in student success” as well as taxpayer cost savings of at least $18.4 million in 5 years. The recent success of the University of South Florida’s consolidation of the main Tampa campus together with the St. Petersburg and Sarasota-Manatee campuses demonstrates the ability to continue to provide a world-class education even through consolidation. Research by Slade et al. (2021), following the 5 years since consolidation in the University System of Georgia, suggests that these efforts must proactively consider strategies to maintain research productivity.

3.3 University Level

Several universities have undertaken university-level activities to develop entrepreneurial practices. Within the United States, Arizona State University is widely regarded as a model for other universities. Arizona State President Michael Crow and co-authors Kyle Whitman and Derrick Anderson (2020, p. 511) describe the “academic enterprise” as “inherently entrepreneurial in terms of the management of the university and its reliance on faculty and student entrepreneurship as a tool for broad-scale social and economic transformation.” Crow et al. (2020) outlined a set of “dominant and emerging institutional logics” in higher education, from the Academy, to Academic Bureaucracy, to the Market, to the Academic Enterprise. They outline how Arizona State University’s success as an “academic enterprise” is due to a complete transformation into highly entrepreneurial entities, including a very conscious effort to limit bureaucracy (Crow et al., 2020). Crow et al. (2020) discuss various forms of university actors and university governance, highlighting their difference in purpose, path to achieving public value, accountability mechanisms, and related assumptions of faculty and management. Specifically, they distinguish between the following:

  • The classic Academy: With its overall purpose being Enlightenment of individual students through immersive instruction, the Academy is run by self-governing professionals whereby management is drawn from and blended with faculty.

  • The Academic Bureaucracy: With its overall purpose being Organizational preservation, the Academic Bureaucracy seeks to achieve state-specified goals by appointing bureaucrats responding to rules. The Academic Bureaucracy is run by public managers (distinct from faculty) and largely governed by audits, public reporting, and standardized testing.

  • The Market: Market actors in higher education are driven by profit for owners and shareholders. Governing mechanisms are characterized by efficiency and cost reduction executed by professional management (distinct from teaching faculty).

  • The Academic Enterprise: This is an emerging hybrid form that may be public- or privately owned, aiming at social transformation by connecting instruction to knowledge-generation and social impact. The Academic Enterprise is managed by so-called knowledge entrepreneurs with management drawn from and blended with faculty, but acting entrepreneurially and seeks to demonstrate economic and social progress.

One example of academic enterprise is North Dakota State University’s Challey Institute for Global Innovation and Growth. In just 6 months and with a generous $30 million in support led by alumni Sheila and Robert Challey, College of Business Dean Scott Beaulier created and implemented a vision for a business-school–based center that enhances economic opportunity and human flourishing. The new center leverages the interdisciplinary expertise of university faculty, including fellows from computer science, public health, construction management, and engineering, as well as business to research areas of innovation, trade, and institutions to identify policies and solutions to better society.

A further example of academic enterprise is that the U.S. universities that spawn the most new companies combine strong research and teaching, and do not necessarily build large structures around these entities (see Rothaermel et al., 2007, for a systematic review of university entrepreneurship, and Fini et al., 2020 for a review of university regulations that foster science-based entrepreneurship). This view is consistent with an emerging literature on value creation spotlighting the importance of knowledge-building proficiency (Madden, 2020). That is, a priority for the design and implementation of university research structures is to enable the development of knowledge and innovation.

3.4 Business School Level

Many business schools employ base plus bonus models to reflect faculty, and in some cases also staff, efforts. A typical model is a base salary, and then an additional annual stipend to hold a chair or fellowship position, which the faculty can apply for periodically based on solid performance. Another example from a private, globally ranked business school in Europe is that faculty receive a base salary and then a bonus at the end of the year based on the quality of their teaching and other efforts. In contrast to other business school models, this bonus can exceed the base, thereby incentivizing faculty to teach the greatest share of classes at the highest quality, as teaching evaluations are used to calculate the bonus. Many other European, American, Australian, and Asian business schools provide bonus pay for faculty who publish in the highest tier of academic journals, typically between $2000 and $15,000 per article, but sometimes scaled to reflect co-authorship (e.g., if co-authors are at the same institution, the funding is split). As a general rule, faculty who are presently high-performing and plan to stay active in the future are more likely to accept innovative compensation models that place excess revenues in a pool such that the business school retains profits from some activities, which are then reallocated based on recent performance.

3.5 Business Unit Level

Business schools and other entities can also develop entrepreneurial policies at the business unit level. One example with six subsequent years of data is a memorandum of understanding (MOU) to establish online programs that resulted in nationally ranked programs and a strong revenue pipeline. In March 2014, Florida Atlantic University’s (then) Provost Gary Perry, (then) CFO Dorothy Russell, and Dean of the College of Business Daniel Gropper signed a memorandum of understanding (MOU) that provided for the College of Business (COB) to develop a self-sustaining Online Bachelor’s in Business Administration (OBBA) that would result in a 38.3% portion of total tuition and fees paid by students in the online BBA classes. The university did not provide any faculty lines or other resources from central administration to grow this online program, and the College of Business paid for online delivery technology, equipment, and personnel for tech support, as well as registration, advising, and other necessary support for students taking online business classes. At the time, the OBBA tuition was $261.29 per credit hour, including an e-learning fee of $60. The MOU specified that the COB would receive $100 per credit hour ($77 from tuition, and $23 of the $60 e-learning fee), and thus 38.3% of revenues, and providing 61.7% of revenue—equivalent to $161.29/credit hour—to the university. Since the OBBA MOU, the OBBA has grown into a self-sustaining program that has allowed the College of Business to be entrepreneurial and responsive. For example, FAU President John Kelly asked the colleges to offer classes over winter holidays, and the COB immediately offered multiple OBBA classes for this “intersession.” The OBBA revenues allowed the COB to establish the Center for eLearning (CEL), which became the Center for Online and Continuing Education (CoCE), providing $549,000 in 2015–2016 and over $1 million in 2019–2020. In the most recent 2019–2020 academic year, OBBA generated over $7.6 million for FAU, of which $3 million went to the College of Business. The OBBA program also achieved Florida Atlantic University’s highest ranking in the U.S. News and World Report at #27 in the nation for online undergraduate business education.

3.6 Individual Level

Faculty and staff can undertake individual-level efforts to reduce bureaucracy. When Professor Robby George served as a tenured chair of political science at Princeton, he established two centers through which to implement his work: one on-campus James Madison Center, and the other off campus. As another example, individual scholars from several universities who choose to apply for government, private, and other grants can select which university is the host for the grant (and therefore conducts the majority of the administration and receives the largest share of these fees), and then the remaining institutions receive sub-contracts. Faculty can also choose how to direct external funding of gifts and grants to support research and teaching activities, commonly choosing between the foundation office (which typically comes with low administrative hurdles) and the office of sponsored programs (typically more paperwork, but may be preferred for signaling purposes). Universities’ Carnegie research status variables include the HERD (Higher Education Research & Development) survey of research expenditures which can include both the office of sponsored programs and foundation funding. Professional staff members at universities can be empowered to play a key role in reducing bureaucracy and increasing ease of navigation for students. At Rice University’s Jones Graduate School of Business, Executive Director Adam Herman relies on strategic management practices to lead the 20-member Academic Programs and Student Experience team. On the importance of considering input from team members, Herman (2014, p. 497) wrote, “[O]pen communication between all levels of the organization can lead to key information holders sharing important information.” Student-facing team members, and process owners, first need to be empowered to share information, and to feel that it will be thoughtfully received, valued, and utilized.

3.7 Non-University Level

There are also many efforts among non-university entities such as think tanks and advisory organizations. One example is the independent, non-profit American Council of Trustees and Alumni’s (ACTA, 2021) database, How Colleges Spend Money, which allows stakeholders to access the aforementioned federal IES data. ACTA then calculates ratios of administrative bloat and outcomes including administrative cost per student, instructional cost per student, administrative/instructional cost ratio, inflation-adjusted tuition, tuition as a percentage of state median household income, and graduate rates for students pursuing bachelor’s degrees.

4 Toward Best Practices in Higher Education

There are many solutions to radically de-bureaucratize higher education. Faculty and staff can aspire to work in post-bureaucratic higher education institutions characterized by best practices including compensation tied to pay and profitability; support services offered to operating units at cost (or are optional); a culture of competition, collaboration, and mutual responsibility; aversion to formal titles and job descriptions; significant and ongoing investment in front-line employee skills; high levels of transparency; multiple channels for lateral communication; and radically simplified planning and budgeting.

4.1 Calculate Bureaucratic Mass

As Thomas Paine (1776) wrote in Common Sense, “A long habit of not thinking a thing wrong gives it a superficial appearance of being right.” The first battle against indifference involves challenging accepted but cumbersome internal bureaucratic practices by gathering data—often a catalyst as bureaucrats focus on activities that can be measured. An emerging literature explores bureaucracies in for-profit organizations (e.g., Hamel & Zanini, 2020) with an increased focus on public administration (e.g., Battaglio Jr et al., 2019), but thus far limited attention to higher education. Recently, management scholars Hamel and Zanini (2020) proposed a “Bureaucracy Mass Index” (BMI) by which to measure the bureaucratic nature of organizations’ overhead, friction, insularity, disempowerment, conservatism, and mistrust, with suggested ways to measure these systematically across organizations:

  • Overhead: Number of management layers, Average span of control, Management compensation as a percentage of total compensation.

  • Friction: Percentage of time non-managerial employees spend on internal compliance, Number of functional staff as a percentage of total headcount, Average review time for budget requests.

  • Insularity: Percentage of total headcount that is not directly customer-facing, Percentage of time that managers devote to internal versus external matters, Cultural and professional homogeneity of the senior leadership team.

  • Disempowerment: Percentage of employee time that is not self-directed, Average size of units with direct P & L responsibility, Percentage of employees who feel that they have little or no influence over key operational decisions (e.g., staffing, pricing, compensation).

  • Conservatism: Extent of perceived disincentives to personal risk-taking, Percentage of spending devoted to projects that are incremental rather than innovative, Percentage of time functional staff spend on ensuring compliance versus supporting innovation and growth.

  • Mistrust: Percentage of employees who do not have access to detailed financial performance for their unit and others, Degree to which compensation decisions are opaque rather than transparent, Percentage of employees who do not have the opportunity to weigh in on key policy decisions.

Traditional for-profit organizations’ BMIs range from 20 to 100 based on 20 questions, where 60 represents a moderate level of bureaucratic drag, and less than 40 represents an absence of bureaucracy. Hamel and Zanini (2020) report that less than 1% of traditional organizations have a BMI under 40, and that BMI strongly correlates with organization size such that 5000 or more employees tends to result in BMIs at around 75. BMIs for the large U.S. public universities seem to fall in the range of 75 or higher, particularly when considering the most hierarchical divisions, which suggests that the BMI could be a tool for measuring and reducing university bureaucracy.

4.2 Calculate the Time Burden for Stakeholders

Most university faculty and staff face significant paperwork burdens, often led by good intentions. One helpful tip here comes from the U.S. federal government’s 1980 Paperwork Reduction Act, designed to reduce the paperwork burden on private business and citizens, by requiring that the Office of Management and Budget (OMB) preapprove any information-collection burden on the general public such as a paper form, website, survey, or electronic submission. The OMB then considers the amount of time (in minutes and hours) it takes to submit this paperwork. For example, the U.S. Government’s student aid website (Federal Student Aid, 2021: https://studentaid.gov/help/collecting-info) notes the average time burden for the over 100 questions Free Application for Federal Student Aid (FAFSA) is an “average 50 to 55 min for applicants who use FAFSA on the Web to complete and submit the application, an average of 40 to 45 min for an applicant who has previously used FAFSA on the Web and completes a renewal FAFSA, and an average of 5–10 min to make FAFSA corrections.” This logic could be applied to other processes such that university administrators could streamline operations by considering the burden for stakeholders. For example, if an internal university process requires that every faculty member’s teaching be directly observed and documented by another department faculty member annually, and includes the planning, observing, documenting, and related administrative meetings, this action easily results in at least 20 additional hours of work per faculty member per year.

4.3 Implement Technology Solutions

There is a range of off-the-shelf and customized technologies that can streamline processes for universities. Some software can be deployed for multiple purposes; for example, Arizona State University deploys Salesforce across its four campuses, online learning, and global entities to manage the end-to-end student experience from recruitment through advancement and corporate relationships (Salesforce, 2021). Universities such as MIT use blockchain technology to issue recipient-owned digital credentials (Durant & Trachy, 2017). Andersson et al.’s (2021) study of the entire population of Swedish university administrators reveals that administrative roles that can be automated then lead to a decline in the share of employees in these profession codes, and also in a corresponding decline in the share of wages over the 2001–2013 time period. As the number of administrators grew during this time period, Andersson et al.’s (2021) findings suggest that technological change helped universities to redistribute resources from automatable roles to higher-value work for administrators. One important feature is that technology should be able to talk to other systems, such that an individual does not have to use two different systems to complete the same activity. An illustration is the large suite of available research proposal software to universities: Some software is fully integrated and a researcher can enter detailed information for a grant proposal and submit automatically to a government or another grant-maker, while other software is only internal to a particular university, and does not interface with other programs, and thus the researcher must complete the paperwork twice to apply for the same grant.

Technical solutions can also involve automatic notifications for faculty and staff. One caution here is the potential for “robotic bureaucracy” defined as “automated systems generated by organizations, often lacking a human name as a sender, with the objective of streamlining work, reducing the administrative burden on employees or clients or customers, reducing the number of administrative employees required, and sometimes, saving money by shifting burden away from organizations to clients and customers” (Bozeman & Youtie, 2020, p. 158). Originally developed for online medical records and commercial airline check-in, robotic bureaucracy in a university consists broadly of meeting federal research regulatory guidelines. As noted by Bozeman and Gaughan (2011), university scientists spend twice as much time on grant proposals and research administration as on student-related activities such as teaching and advising, and an important solution is staff support and the standardization of automation across universities. Faculty can also employ solutions that support their own rubrics. For example, if a faculty member recognizes emails sent from certain members of an entity on campus, the faculty can use a mail filter to automatically direct those emails into a folder and then address those issues in bulk, rather than as the emails arrive, resulting frequently in one-off interruptions to the flow of one’s work. Certainly, no technology solutions will solve all issues. As Nobel Laureate Robert Solow (1987) noted as a productivity paradox, “We see computers everywhere except in the productivity statistics.”

There are a range of new technology solutions that address specific issues and create efficiencies in the system. Students’ time to graduation is a key performance measure and is improved by placing students in classes that garner credits toward graduation. One of the greatest inefficiencies in higher education is that many universities use placement exams that lack validity and reliability, in order to determine which classes students should take. An unfortunate consequence of these substandard screening tests is that many students, particularly those from underrepresented groups, are unnecessarily placed in remedial courses (Scott-Clayton et al., 2014). Bergman et al. (2021) developed a placement algorithm using predictive analytics to combine multiple measures and demographics into a placement instrument, which was tested on 12,544 students in seven community colleges. This new technological innovation led to substantially better placement rates, resulting in reduced costs for students while increasing college credits earned, and reducing costs for colleges.

4.4 Lead Change Management Efforts across all Levels

Change requires extensive communication and is unlikely to come from within. As noted by Hamel and Zanini (2016, p. 9), “those who’ve excelled at the game of bureaucracy are typically unenthusiastic about changing it. Someone who’s invested 30 years in acquiring the powers and privileges of executive vice-president is unlikely to look favorably on a proposal to downgrade formal titles and abolish the connection between rank and compensation.” Leaders will need to share credible examples of how other higher education institutions achieved the goals of bureaucracy (control, coordination, and consistency) while avoiding costs. One suggestion is that any meeting in which administrators or others propose new rules then provide for how these can be crafted without additional bureaucracy, and ideally while reducing current burdens. Another suggestion is that individuals who are directly impacted by the bureaucracy are actively consulted, and also requested to provide insights from the coal face around streamlining operations.

4.5 Make Better Decisions

Organizations, including higher education institutions, can be seen as “networks of decisions,” and thus decision-making should be structured such that individuals can attain the highest possible goals for their organizations (Shrestha et al., 2019). In general, best practices in decision-making in traditional organizations translate to the higher education industry. For example, decisions should be made for the good of the organizations and its members, and not to help managers save their reputations from damage. As in traditional organizations, when a new leader joins an academic institution, there is often a tendency to implement decisions (e.g., reorganization) to demonstrate ideas rather than because the department will be more efficient or effective after the reorganization. Best practices from decision research frequently indicate that it is best to pass the decision to someone else who may be more appropriate, or even more commonly, to involve others in the decision. Lessons from corporate change management apply: Individuals will spend more time and effort on implementing a strategy that they had a role in creating. Decision-making through consensus is key when quality is far more important than time spent. Consensus is distinct from consulting others; and when only consulting, an individual should communicate that purpose, such as by saying, “Hi Colleague, I am trying to decide whether to move this administrative task from Office A to Office B. As I make my decision, I’m asking any key players, like you, what the effect might be from your perspective” (Dittmer & McFarland, 2007, p. 28). Another take-away from top-performing organizations is to enable decision-making at the lowest level possible, such that front-line employees can spot problems and opportunities, and work toward solving them. Other critical advice is to avoid wasting time and energy thinking about simple decisions, and especially to limit time spent battling over small decisions in group decision-making. Good decision-makers tend to begin with the end in mind and picture future success.

4.6 Reduce Bureaucracy by Staying Close to Customers and Pursuing Open Innovation

Some organizations pioneer a number of promising practices that reduce bureaucracies and create higher-performing organizations and employees. Although revolutionary for many universities, many corporate practices spotlighted in Humanocracy (Hamel & Zanini, 2020) may be particularly promising in academic environments. One recommendation is to keep all employees close to customers in some way, as employees who are not close to customers end up insulated from market forces, and often become mediocre, inflexible, and inefficient. Within a university, this principle would require all administrators to have some customer-facing activity. One illustration here is that many college deans and even university presidents still teach a university course, and therefore stay close to their final customers so they are acutely aware of issues at the coal face. Another example is administrators who can mentor students. Other practical solutions identified from high-performing corporations such as steelmaker Nucor and appliance-maker Haier include developing targets based on the environment, not on the last year’s performance. In high-performing anti-bureaucracy corporations, units within and across the firm are encouraged to pursue open innovation possibilities, internally and externally. For market-facing business units such as executive education, the world’s top-ranked schools provide performance bonuses on a team basis and allow re-investment into the pool. Universities can also follow top-performing corporations by creating opportunities for social collaboration across the entire organization, and with customers, and by setting some standards but providing scope for creative solutions. A final suggestion is to reduce or eliminate internal offices that must be used for some processes, and instead allow a bidding process involving multiple units.

5 Conclusion and Future Research Directions

This chapter identifies some underlying causes of the growing bureaucratization in higher education and offers a range of solutions at individual, business unit, university, and other levels. Although higher education bureaucracy is most often identified by academics, researchers, and policymakers, a growing share of the public is becoming aware of the phenomenon, thanks in part to the new Netflix show The Chair, which follows a new academic chair for an English department facing the often bureaucratic demands inside her department, school, and university. The Twitter account Associate Deans (2021) has also noted a tendency for bureaucracy, with near daily tweets such as: “From my annual review: ‘an almost savant-like aptitude for bureaucratic administration!’ Finally, they are noticing my skill set!”

Many possibilities, such as calculating the present bureaucratic mass and administrative burdens of proposed changes, implementing technology solutions, leading change management, and employing best practices in decision-making, can be implemented and studied. There is incredible potential to research promising practices to reduce higher education bureaucracy and reclaim the entrepreneurial university. These future research directions can be categorized by theoretical, methodological, and phenomenological contributions.

Future enquiry can test existing management theories within the higher education context. For example, upper echelons theory (Hambrick & Mason, 1984) suggests that managers’ background characteristics can lead to organizational outcomes in the form of strategic choices and performance. This theory could be tested, for example, to determine whether new university presidents with a background in leading businesses or business schools are able to improve their universities’ financial performance, and whether new university trustees with particular expertise are able to help their universities expand on these capabilities. The attention-based view (ABV) (Ocasio, 1997) could be extended to higher education contexts to explore how decision-makers’ concentration of time and effort results in certain organizational outcomes. This could examine university leaders who focus on particular metrics for development into distinct strategies that create value.

From a methodological standpoint, researchers can utilize an “action research” (McNiff, 2013) approach to simultaneously seek to research and transform their organizations. For example, researchers can create new programs in a skunkworks-like structure apart from the university bureaucracy, and directly test hypotheses about how to create knowledge and value through this new component. Future enquiry can utilize a variety of both quantitative and quantitative methodologies. Empirical researchers will be drawn to existing databases, particularly at federal and local levels, but also maintained by individual universities and colleges for internal and external reporting purposes. Qualitative methodologies such as case studies and ethnographies offer a unique opportunity to probe certain phenomena.

There are many new phenomena in higher education that merit future enquiry. I highlight future research directions for three key trends: long-term economic recession, new third-party players in the higher education industry, and corporate entries. First, researchers could explore the effect of economic recessions on higher education outcomes. An economic recession typically leads organizations to pursue greater efficiency, often taking the form of cost-cutting and de-bureaucratization. For example, the 2008–2009 recession led to reduced bureaucracies in traditional organizations such as corporations (Hamel & Zanini, 2020), as well as to cost-cutting and redundancies in higher education (Friga, 2020). The most recent global economic slowdown resulted from lockdown policies regarding Covid-19 (Robinson et al., 2021). However, at least in the United States, the 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES) Act and subsequent supplements provided $2.59 trillion in government relief (DataLab, 2021), including over $14 billion for higher education. The loss of only 650,000 higher education positions during the Covid-19 pandemic (Bauman, 2021) suggests that the extensive CARES funding limited the actual effect of the severe economic recession, and inevitably stalled many higher education institutions from further layoffs and permanent closures. Future research can explore universities’ financial management during the COVID-19 era.

A second key trend is the entry of third parties into the university market. In the online graduate business education market, there are roughly three models that explore the classic make, buy, or ally decisions that traditional companies face when seeking growth in new markets. For business schools, the make choice involves the organic development of internally building activities which range from recruitment through the development of curriculum and pedagogy. Two examples of in-house development of highly ranked graduate and executive programs in business are Indiana University’s Kelley School of Business and Florida Atlantic University’s College of Business. The buy option is rarely used, but one example is the Shanghai-based China Europe International Business School’s (CEIBS) purchase of the Lorange Institute of Business in Zurich to build a European footprint (Murray, 2019). The most common path is an alliance, whereby an external party conducts the majority of the marketing and other administrative activities and takes a share of the revenues, which typically range from 33–66% of gross tuition, as at American University’s Kogod School of Business (with a 66% revenue share with 2 U) and at the University of Maryland’s Smith School of Business (with a roughly 50% revenue share with Pearson, although select services can be bundled or unbundled). A promising line of future research explores the long-term sustainability of these third-party–run programs, and their effect on the universities’ other offerings, as well as the overall market for graduate education.

Another important phenomenon is third-party actors which can contract with higher education institutions, but also develop their own non-university solutions. Corporations have noticed rapidly expanding academic costs and bureaucracy, and many have responded with their own education solutions. For example, Google publicly eschews university credentials when hiring new staff, and recently created its own education certifications (Dishman, 2020). This line of research could examine the effectiveness of third-party entries and universities’ responses.

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Terjesen, S. (2022). Reducing Higher Education Bureaucracy and Reclaiming the Entrepreneurial University. In: Wennberg, K., Sandström, C. (eds) Questioning the Entrepreneurial State. International Studies in Entrepreneurship, vol 53. Springer, Cham. https://doi.org/10.1007/978-3-030-94273-1_7

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