Business Model and Higher Education

In the past few weeks, I have been thinking about a couple of issues that we brought up in the last class. “Business model” is definitely one of the issues that has been hanging in my mind. In the class, we discussed that it is not appropriate to apply business models to higher education institutions because business settings and higher education institutions have different missions and operational methods.

Reacting to social changes slower than normal businesses seems to be a unique and common feature in higher education. But it’s a fact that higher education institutions have survived and have been able to face various challenges over times. In the article entitled, “The 'Crisis' Crisis in Higher Education,” the author also indicated that the problems we face now are not much different from the problems of the past (Birnhaum & Shushok, 2001). Even so, would this assumption apply to every crisis in higher education? The trends of higher education in the 19^th century are probably different from the trends in the 21^st century. So the question is how to implement some business or organizational strategies/models in higher education institutions in order to make the institutions adapt and face problems more effectively.

I personally think that higher education institutions can benefit from implementing business models. Even for non-profit institutions, the administrators still have to consider how much revenue they can generate for their institutions. The administrators in non-profit institutions might not have as much pressure as the administrators in for-profit institutions since non-profit institutions normally receive financial support from the state or federal government. But how to operate institutions in a more effective way should be considered for both non-profit and for-profit institution administrators.

If it is feasible to implement business models in higher education, what type of model or business strategies can be applied in higher education? The first two models that come to my mind would be “The Learning Organization” and “The Fifth Discipline.” Argyns and Schon (1978) were the first to propose the model of the learning organization in the 70s. The idea of learning organizations are focus on how individuals continually expand their capacity to create the results they truly desire within an organization. Peter Senge (1990) also incorporated the organizational management idea in his book “ The Fifth Discipline.” The disciplines of a “learning organization” are systems thinking, personal mastery, mental models, building shared vision, and team learning. All these elements are helpful for an organization continually to create its future.

The ideas of “team learning” and “learning organization” sound very appealing to me. But implementing the models require individuals in an organization to expand their capabilities through learning continuously. However, it is possible for an organization to have limited learning ability. The limited learning ability might be one of the reasons to have a higher education institution respond to social change rapidly. According to Argyris, the action of learning extends from individual behavior to organizational contexts. When most individuals seek unilateral control to protect their positions or power, they create organizational behavioral worlds that are consistent with, and protect, the use of these same controlling patterns of thought and action. Consequently, they create organizational systems that limit learning rather than facilitate it (1997). This might explain why higher education institutions always respond to social changes slower than businesses.

Higher education institutions are different from private businesses. A large number of the institutions have existed for a very long time. In higher education, we are so used to the pattern that we have been using for many decades. I just wonder if we can increase an institution’s organizational capabilities and run the organization more effectively by revising some business models and implementing them in higher education.

Argyris, Chris. (1997). Initiating change that perseveres. The American Behavioral Scientist, 40(3), 299-309. Retrieved February 27, 2010, from ABI/INFORM Global. (Document ID: 10598919).

Birnbaum, R., & Shushok, R. (2001). The “Crisis” Crisis in Higher Education. In defense of American higher education. MA: Johns Hopkins Press.

Senge, P. M. (1990). The fifth discipline: The art and practice of the learning organization. New York: Doubleday.