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This analysis of American higher education today lists students, faculty, and consumers first because of their historical precedence. Administrators soon arose as a specialized occupation for the convenience of students and faculty.
Historically, the chartering organizations came next, raising the barriers to entry. In a hierarchical and hereditary society, they ensured exclusivity. In other words, a rich man's son got educated even if a poor man's daughter had more talent and drive.
After practical knowledge became complex and crucial, industry outsourced its R&D in the form of direct research grants or indirect government grants. To ensure quality, accrediting organizations became necessary.
See visual model of stakeholder relationships.
The chartered institutions in the U.S. enroll fifteen million students, women and non-Hispanic whites being disproportionately represented. The proverbial baccalaureate student who takes a 120-hour degree in eight consecutive 15-hour semesters between the ages of 18 and 22 at the same institution is in a distinct minority. The median age of today's baccalaureate students is a little over 26 years, they take well over six years to complete their degrees, and few do all 120 credit hours at the same institution.
They're on their own. Few students at any college or university present the same set of courses at graduation. If they do, they didn't take them in the same order from the same teachers.
Note: These numbers are soft as well as rounded because there are several ways of counting. For example, when you say students, do you mean human beings or full-time equivalents? FTE: number of credits enrolled for divided by 15. Or by 12, which is considered full-time for financial aid purposes.
In 1998, these institutions contracted with 550,00 full-time, 380,00 part-time faculty, and 200,000 graduate assistants. Of the full-time faculty, 400,000 worked at public institutions and 150,000 at private. Their academic ranking goes from instructor to assistant professor to associate professor to professor. A little over half have tenure.
source: AAUP's Improving Teaching: Tenure Is Not the Problem, It's the Solution
The typical faculty professional services contract mentions showing up for class, submitting grades, and advising students outside of class. It makes no mention of research unless it affects teaching schedule or compensation, which is rare.
Higher education was able to survive the Industrial Revolution and the corporate training movement of the late 20th Century by providing, in both graduates and in applied research, much benefit to the graduates' families, to their employers, and to society at large. This European model has been adopted worldwide, though often with culture-specific modifications.
In April 1998's Reaping the Benefits: Defining the Public and Private Value of Going to College, the AAHE Bulletin describes the economic and social benefits. Two snippets:
In 1995, for example, high school graduates earned an
average of $21,431 annually, while bachelor's degree recipients made 73% more --
$36,980. This trend is consistent at all education levels. ...
Children whose parents have attended college have a considerably higher quality
of life.
See note below on the difference between consumers and customers.
These institutions employ almost three million staff, more than the automotive, steel, and textile industries combined. A million are non-professional staff. Of the two million professional staff, slightly less than half are administrators. They are responsible for the quality of student life outside of the classroom, including student housing, recreation, and athletics. They schedule the classes and other events.
They administer the government subsidies and student tuition for salaries and for MRO (maintenance, repair, and operation) of the physical facilities.
By authority of the chartering organization, these institutions grant credit and award degrees based on a paper trail of a transcript supported by grade reports supported by graded tests and recorded hours of seat time. For example, a degree from any college or university in New York, public or private, is granted by the authority of the New York State Board of Regents. You will hear that clearly at every commencement.
This chartering process keeps the barriers to entry very high. It does not stop people from private learning or corporations from in-house training. It stops them only from getting or offering college credit for the experience.
Government, private industry, and foundations sponsor research. The awards process is competitive and the rewards though patents, licenses, and prestige can be enormous. Beyond that, the practical applications of this research permeate every fabric of our society, making the ROI (return on investment) astronomic.
As an example, take the new media world, the premier university research effort is M.I.T.'s Media Lab, led by Nicholas Negroponte. Their list of corporate sponsors is impressive. The well-sponsored World Wide Web Consortium (W3C) is also at M.I.T. The research into things that think (TTT) and toys of tomorrow (TOT) will help transform our lives in the next century.
These state, federal, and professional organizations periodically examine institutions' records, procedures, and policies. For example, Medaille as a whole is accredited by the state education department and Middle States.
The New York State Education Department authorizes new degrees and monitors the curriculum for appropriate instructional objectives. It also reviews the faculty, library and other resources, academic advising and records, administrative oversight, physical facilities, and financial resources.
The Commission on Higher Education is the unit of the Middle States Association of Colleges and Schools that accredits degree-granting colleges and universities in the Middle States region. Recognized by the U.S. Secretary of Education and the Commission on Recognition of Postsecondary Accreditation, it examines the institution as a whole, rather than specific programs within the institution.
Medaille's MBA program is in the process of gaining accreditation by the International Assembly for Collegiate Business Education (IACBE).
list of accrediting agencies
A long list; two examples:
MRO vendors such as the food service industry and the
textbook publishing industry
regulators such as OSHA, unions, and professional
associations
In this business model, the faculty is the customer and is at the center, represented here by the white ball. The faculty is driven (the four arrows on the left) by the chartering and accrediting organizations and by the income from consumers (tuition), research sponsors, and government subsidies. The faculty produces (the two flatter arrows on the right) students and knowledge.
To account for the other stakeholders here, the administrators budget the income and schedule the facilities. The consumers of the students and knowledge, that is, the families, employers, and civic society, provide all the revenue:
direct tuition (and endowments) - 25%
research
grants included by industry in the cost of goods and services - 25%
various
tax-subsidized income ranging from work-study to not-for-profit tax
status - 50%
Learn more about how this model came to be.
Hospitals, courts, and universities. All three of these institutions are highly successful because they are so customer-focused.
Who are the customers at the hospital? The doctors. Who are the customers at the courthouse? The lawyers (including the judges). Who are the customers at the university? The faculty.
Don't confuse the customer, the person the institution centers around and must please, with the product, the thing that must be improved and have value added to it by the institution. As with any production process, the failures validate the successes. The patient can recover or die, the criminal can go free or go to jail, and the student can graduate or flunk out. A university is still an institution and students are institutionalized, as are patients and convicts.
You go to a hospital when you're sick. You go to a court when you did wrong. You go to a school when you ____ ? How would you finish that sentence? At the Bistro, you can talk about it.
In private-enterprise retail business models, the customer pays. In public-enterprise, government-subsidized business models, the customer doesn't necessarily pay. Nor does the revenue come from the customer, though the value added by the doctor, lawyer, and teacher is important "income" in the nebulous sense of expertise or intellectual capital.
In higher education, don't think that the student is the customer just because the student pays tuition.
We have health insurance. Why not tuition insurance?
Higher Ed,
Inc. : The Rise of the For-Profit University
by Richard S. Ruch
Johns Hopkins University Press, 2001
Lack of clarity about who is the customer continues to be a fundamental challenge for many colleges and universities. ... In contrast, the for-profits do not struggle with the question of who the customer is. The customer is the student, and everyone—from the faculty to the librarians to the financial aid office to the students themselves—is clear about it.
other pages in this Higher Education web
industry portrait | history
factory model | apprentice model
present and future pressures | distance education
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