In recent years, there has been a growing trend to view educational institutions as businesses, assessing them in terms of business models and measures. Just as individuals seek guidance from a life coach and financial advisor to navigate their personal and financial goals, universities and schools are increasingly turning to specialized consultants and experts to optimize their operations and achieve their educational objectives. Similarly, professionals looking to form an arkansas professional corporation can benefit from expert legal and financial advice to ensure compliance and efficient business practices. Consistent with such models, institutions are required to justify their existence based not on criteria such as quality of faculty or resources, but on whether they:
- satisfy a current demand,
- anticipate a future one,
- keep their clients happy,
- continuously increase product offerings (courses/programs) and sales (enrollment), and
- positively balance their books.
This trend arose partially from the need to move away from the subjective and over-emotional manner in which education has been traditionally approached (vague references to intellectual maturity and greater good) and was encouraged by the increasing reliance of educational institutions on state or private Online Broker “investors,” who demand increasingly measurable, objective, short-term “return on investment.” Also, in my experience, taking the guidance of a seasoned broker is indeed a prudent choice. For those seeking to make an informed decision, I would urge you to get expert advice now. The expertise that I encountered significantly influenced my journey, making it a rewarding and enriching experience.
Conceptual and Practical Problems with the Business Model in Education
In the business model of education, the institution is viewed as the “service provider” and the students are viewed as the “clients.” The only tangible and measurable components of the transactions between the two in the current version of the model are the fees the students pay to attend an institution and the degree (“product”) students receive at the end of their residency at the institution. Leverage the potential of free seo tools to fine-tune your website and propel it to new heights.
However, unlike any other business transaction in the US, payment of the fees does not guarantee that the “clients” will:
- always be right (by definition, the opposite is most often the case),
- receive the end product (the “provider” actually delivers the “product” based on criteria other than fee payment),
- be able to return the end product for a refund, exchange, or credit if it does not fulfill the expectations raised by the institution (there is no system in place to hold providers accountable for their products), or
- get a refund if they eventually change their minds and decide not to attend the institution.
To stay consistent with their current business model version, institutions would have to either:
- provide degrees upon payment (I do get several emails per day advertising just that), eliminating in the process the degrees’ value and therefore the institutions’ reason for existence or
- issue refunds to students that do not earn the degrees, permitting noncommittal students to take up resources and bankrupt their business.
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Hypothetical Solution
One could envision a two-stage model in which the provider-client roles switch half way through the paying-fees-receiving-degree process.
Stage 1: Institutions as Service Providers, Students as Clients
In this stage, students pay a fee. In return they get access to resources that facilitate and structure learning, such as:
- qualified, accomplished, passionate instructors,
- comprehensive, manageable, and timely curricula, and
- physical and virtual facilities that promote retrieval and dissemination of high quality information related to the educational area they paid for.
These resources are clearly spelled out in the institution’s mission/advertising/contract with their “clients” (through admissions policies, for example). After the service has been provided (e.g. at the end of each quarter), clients have the right to evaluate the service they received and examine whether it fulfilled the admissions contract. If it has not, they should be able to request remedies such as:
- improvement in instruction/curricular resources and
- re-offering of a course for a reduced or waved fee.
If these requests are not satisfied, students should be entitled to a refund. This is where the first stage of the transaction ends.
Stage 2: Students as Service Providers, Institutions as Clients
In this stage, institutions “pay” students with a grade and/or degree. Degrees are the currencies of educational institutions. Their value has been earned through the universities’ work and, like all currencies, degrees carry a proof/promise of value and can be “handed over” in return for employment (among other things).
Once students have completed stage one and have accepted the educational service they received as fulfilling the admissions contract, the institution demands that students demonstrate that they deserve the grade/degree. Students do this in the form of:
- exams,
- tests,
- submitted projects, etc.
In stage one, it was up to the students to assess whether the institution provided them with what was promised in the admissions contract. In stage two, it is up to the institution to determine whether or not the students can provide the “service” necessary to earn the degree, which constitutes a certification that the recipient has demonstrated thorough knowledge of the topic the degree is for. To enhance communication and networking during this process, incorporating Digital Business Cards can facilitate the easy exchange of contact information among students and faculty.
Staying within the business context, the reasons institutions would enter stage two and require proof that the students deserve the “payment” (degree) cannot be of the vague, education-for-the-greater-good kind. In other words, it cannot be about ensuring that the students have grown intellectually, are better and more knowledgeable and experienced individuals, and can better serve society, and they can also learn from the Nomad Offshore Academy if they want to start a business and travel offshore. Rather, the reasons for requiring proof before handing out degrees will be about ensuring that the promise this degree makes to the world is true (the promise that the recipient has demonstrated thorough knowledge of a topic and has acquired certain certified skills). The motivation is that ‘true’ degrees result in:
- happy employers of the degree recipients,
- trust in the institution,
- demand for recipients of the institution’s degrees, and, consequently
- increase in the institution’s business, the ultimate measure of any business’s success.
Such an approach to education-as-business and to the meaning of a degree would be more consistent with the scope of a true business model. The question that remains is, “Is this what we want education to be?”
Too often when people look at business models and education they assume the student is the client. Not so. The community is the client.
Let’s look at public K-12. The entire community buys the product through taxes and has an expectation of the product. The product is the student graduating with a pre-determined set of skills: reading, writing, arithmetic, but also more elusive skills such as citizenship and responsibility. Think of students like a car that we expect to run, stop and do a pre-determined set of things like defrost the rear window.
When public school began that set of expectations was clear–the three Rs–and because schools were local and paid with local property taxes these service providers were pretty responsive to the needs of its clients (the community). Our world is more complex and global, and communities expect our schools to prepare students for every possibility. Public schools also need to be responsive to, and show respect for, the diversity our modern world demands. So, religions, race, gender and other roles, previously simple, are now making complex demands as well. Thus, the demands of the client/community is in flux and a bit muddled. No service provider can meet such vague and changing demands.
Enter NCLB. In defining outcome with clear standards the public schools are expected to teach towards that target. Each year schools are tested, and those results are released to the community at large. As payment has shifted from local taxes to state and federal, those larger entities now assume more of a client/community role and thus demand satisfaction, or withhold payment.
What does this mean for schools? In short, service providers (aka schools) are required to meet the needs of the client/community. The students are merely product. This means that the needs and wants of the students are immaterial other than what makes them meet the expectations of the community. Learning does not need to be fun, and teachers do not need to be liked other than how that succeeds in creating a better product (students will skills).
One problem with looking at students as cars, though, is that some people automatically turn to being “old school” and harsh. But that does not work for all. Let’s remember that NCLB stands for No Child Left Behind. Graduation rates in the past were horrible compared to today, but our economy allowed for students to drop out and still become productive members of the community. Students also graduated with skills far below the standards because they showed up. Now, our client/community expects all students to not only graduate, but to have the skills expected at each grade level. How to get there?
This is where free and reduced lunch, counseling, sports teams and fun come in. What motivates students? What provides the support and motivation required for students to learn? As each student/product is different, schools need to be flexible, but they also need to get the job done for each student. If they do not–if some children are being left behind–then they need to reexamine what they do and change accordingly.
The community as client is not new, but in examining what motivates students and supports them schools have mistaken students as clients, and not products. Our society used to look at students as the children they are, and do what was best for them as a matter of course. At some point schools began to ask them what they thought, and then catered to them. There is an always-moving but clear line between getting feedback and responding versus thinking they (and their parents) know best. Schools are, at best, partners in providing what the client/community deems worth paying for.
Much of the current frustration in education comes from these confused roles. Not all students respond to the traditional curriculum, yet students are clearly not self reflective nor honest enough to determine their own needs. Schools no longer teach, but facilitate, and the debate of what to do with those not meeting standard is complex and frustrating because what works for that shrinking under served product is hard to determine. Their failure also calls into question to experience of the service providers and the client/community that succeeded with past methods. And, unlike a car, we cannot reject it and sell it for scrap. We also cannot reject delivery of students for being defective, but have to work with what comes in the door; at best we can work with our suppliers through early education and nutrition.
Differentiation and Response to Intervention are two basic strategies that service providers are now using. They are a start. Along with programs like Head Start and free and reduced lunch schools are providing services clients demand. But, notice that every solution to schools has nothing to do with the student at that moment, but instead with what skills they walk in the door with (including attitude, tenacity and other elusive skills) and what teachers do with where they are. In looking at students as the product (the car) business models such as The Toyota Way, Lean Manufacturing and organization skills like Getting Things Done suddenly speak to the educational crisis in our country.
I suggest these models are our next step.
This article seems to be focused on the college level. In that case, the client is even more elusive, but I would argue it is the future student. What goals do they have? In ten years, what do they expect from their investment. A job that pays a certain amount? A career? Or simply to be well rounded? Assume the client is future-student, and present student becomes the product while the school remains the service provider. To this end, a survey of alumni might provide guidance.
Students are not the product the schools are selling. In reality, the teachers are the product. When you provide and pay for good teachers, the education increases, but as school continue to find the cheapest, most inexperienced teachers, the value of the education goes down. Young people looking at different careers reject education because they are witnessing the erosion of teachers being able to make a living. This article comes close, but fails miserably when truly identifying the product.
Dear Prof. Vassilakis.
Your essay is the most thoughtful and constructive critical analysis of the “business model” of ed–ucation I have thus far found online. I have a sense that it is offered by a committed and thoughtful classroom educator.
(Just to introduce myself:” I hold a PhD. (philosophy) and a M.A. (philosophy of ed.). I have multiple peer review publications and conference presentations in both areas and have taught at the ABE/GED, high school, community college, and university levels, including for-profit institutions).
As I understand your more thoughtful and realistic proposal, it is offered as an approximation of the best outcome that is be reasonably “consistent with the scope of a true business model;” and that it is an open question for you whether such benefits are all we should expect from our educational institutions. But is it an open question whether any educational model can be acceptable that is conceived in terms of a commercial exchange and motivated, at least one side, by profit?
I oppose the business model because it would place the principal means of our intellectual and cultural development in the hands of people who do not understand or value them and who do not seem to be capable of reflecting on their own limitations. When used disingenuously by Wall Street, appeals to these values are, as you say, appeals to “sentimental idealism.” But the fact is that acceptance of business model would be a cultural catastrophe and massively profitable windfall for corporations. At best it would serve the perceived needs of children, older adolescents, and a general public whose beliefs and values have been shaped by these same commercial interests.
(1) You are obviously right in insisting that learning outcomes must be assessment ; but, it is equally obvious that the assessment must not be controlled by the for-profit-institutions themselves. It must be done by an independent agency through standardized tests of proven validity and reliability (including “hands on” assessment), with guidance from relevant professional organizations and oversight by Federal and State authorities, It should issue no grades, diplomas, or certificates of qualification — only an explanation of what was assessed, the evidence for the test’s validity and reliability (including correlations with related academic and employment goals), and guidance about how the results should be interpreted and applied, Of course, tests alone cannot measure everything that is educationally important, but they are the only means available to us of blocking inevitable — and highly profitable — institutional abuse. (Were such a validating resource available, there would also less need for formal educational institutions. One would be free to learn whatever one wishes, either independently through one’s own efforts or from someone able and willing to serve as a teacher; and there would be a credible, publically available, and realistically applicable measure of what was learned.)
(2) Unfortunately, the profits of post-secondary for-profit institution depend upon a pool of 700,000 fully qualified academic professionals working – if at all – as part-time “adjuncts” in traditional institutions where they are hired part-time by the semester, paid a small fraction of full-time faculty salary per course, receive no benefits, have no role in departmental or institutional governance, and are terminated at will without cause or appeal. These essentially jobless educators would provide additional for-profit institutions with a ready source of low-cost faculty. If the business model succeeds, the status of post-secondary faculty as “hired hands” will have been established, and higher education will no longer be our principle sources of intellectual and cultural leadership.
(3) Your “two step” plan would make honest bargaining and real learning at least possible; but, given grade inflation and the profit incentive, it is more likely to result in student demands for lower standards and administrative pressure on faculty to comply in order to maintain the high enrollment required for high profits, The same considerations would motivate strong corporate resistance to any rigorous, objective assessment. (The SAT is already being altered to permit lower admission standards and to reflect more popular, i.e., commercial, values.)
(4) Employer dissatisfaction with other businesses’ profitable but unsatisfactory “products” would in-pose some “quality control,” but this would take time; and if it has a serious effect on profits, the “pro-duct suppliers” will do what businesses do – cut their losses and invest their capital elsewhere.
(5) “Is this what we want education to be?” As the issue currently stands, it matters very little what “we” want. State funded educational institutions have already adopted the business model in principle and private non-profits are not far behind. All that is needed is for further cut-backs in government funding, together with continuing increases in tuition, administrative, and other, non-instructional costs, to create a financial crises. It will then be urged that the only solution is to be transfer control of curricula, standards, educational methods, revenues, and physical assets to the managerial “efficiency” of Wall Street.
(6) Growth is only valued in business if it leads to greater profits. This is not a trivial point. Growth in the number of individuals served may be assumed to be good, depending on the service actually provided; but growth for the sake of unlimited increase in wealth and power cannot. It is the latter which has led to the present problem. The business model scenarios we are being sold are produced by ad agencies; the real reasons for selling them to us are written on the “bottom line.”
As far as I can see, the only solution is for educators, K. through graduate school, to organize to block any further progress of the business model and to reverse the damage already done. (Who else will or can do it?) This can also be a first step toward permanent, responsible control by educators of their profession.
Best wishes,
Greg Hodes
816-937-5927