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.
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:
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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.
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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.
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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).
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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.