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College boards turn to business-style approaches

Wednesday - 6/27/2012, 7:54am  ET

By ZINIE CHEN SAMPSON
Associated Press

CHARLOTTESVILLE, Va. (AP) - A popular University of Virginia president is forced to resign because board members thought she wasn't working quickly enough to address diminished funding and other challenges. Purdue University hires as its new president a governor who lacks academic experience but is adept at raising money and cutting education spending. And the president of the University of Texas enlists a committee of high-profile corporate executives to examine the school's budget and operations.

The governing boards of colleges and universities are increasingly demanding that their presidents perform more like corporate chief executives, much to the chagrin of academics who say treating colleges as businesses doesn't fit the mission of higher education. Experts say the recent moves largely have been spurred by federal and state funding cuts.

In Charlottesville, Va., the Board of Visitors ousted U.Va. President Teresa Sullivan earlier this month because some members thought she was moving too slowly to address shrinking government funding, develop more online courses and position U.Va.'s hospital to better compete with private health care providers.

Sullivan was reinstated Tuesday in a unanimous vote by the board nearly three weeks after her secretive ouster. The Faculty Senate and college deans stood behind Sullivan as students, faculty and alumni protested the forced resignation.

In the days before the vote, Rector Helen Dragas said Sullivan's self-described "incrementalist" style stood in the way of the university's long-term success. In defending her performance since she took office in August 2010, however, Sullivan said: "Corporate-style, top-down leadership does not work in a great university."

Late last week, Dragas issued a statement describing the concerns that led the board to Sullivan's removal. Among them were a lack of an overall strategic plan and a list of 10 difficulties the school was facing. The recurrent themes in the list included competition, technology and scarce resources. Many also referenced a lack of planning or leadership.

"For some time, the Board of Visitors has been concerned about the following difficult challenges ... and we concluded that their structural and long-term nature demanded a deliberate and strategic approach, not an incremental one," Dragas said in the statement.

Dragas said Tuesday she supported Sullivan's reinstatement and the two pledged to work together. But the president acknowledged that differences remain.

"I do not ask that we sweep any differences under a rug, but rather we engage each other with candor and respect," she said after the vote.

The ordeal has sparked a debate on the merits of traditional academic leadership versus results-driven management.

"Universities are not corporations. Universities are nonprofit, public entities that have missions of teaching, research and public service," said Matt Hedstrom, an assistant professor of religious studies and American studies at U.Va. who backed Sullivan. "Those are not the same mission as a corporation. They also don't have the same cultures and governance. They're much less hierarchical."

Purdue University's board last week named Indiana Gov. Mitch Daniels as its president, a choice that made faculty members apprehensive. Critics noted that Daniels had appointed seven members and reappointed three to the board that selected him president, calling it a conflict of interest.

As governor, he's linked college funding to performance measurements such as degree attainment, and since 2009 ordered more than $150 million in cuts to public education _ including $30 million to Purdue. But many Indiana GOP legislators back Daniels, a former White House budget director and executive of pharmaceutical company Eli Lilly.

"I think in today's world that the president of a university, No. 1, has to be a great fundraiser, and I think Mitch Daniels has proven he's a good fundraiser," Senate Education Committee chairman Dennis Kruse told Indiana Public Broadcasting.

In addition to improving fundraising, universities are increasingly looking for ways to use resources efficiently, cut costs and develop new revenue sources. More than a third of universities were considering privatizing operations _ such as bookstores or food service _ for short-term revenue in 2011, and more than four in 10 were looking at privatization for long-term revenue, according an Association of Public and Land-Grant Universities survey of 81 research universities plus six university systems.

At the University of Texas, a committee of executives from Accenture, Dell, Boeing and several capital-management firms are developing strategies for efficient use of the school's $2.3 billion operating budget. The group will develop performance measurements, interview university employees and measure efficiency.

Trustees at Ohio State University on Friday approved a proposal to lease school parking operations for $483 million to an Australian company over a 50-year contract. University officials say the deal will give the school more money for salaries, student aid and other improvements _ a contention critics have questioned.

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