For more than a decade there has been increasing public concern about the corporatization of the American public university, a process that has been going on for several decades. Articles and public opinion pieces decrying the transformation of public colleges and universities into corporations have appeared in many publications. Many attribute the process to the economic crisis of the 1970s, but it is important to understand that the process is driven throughout society by the proponents of neoliberal ideology. Those proponents set in motion the transformation of American public universities into corporate-like institutions, embedding their political beliefs in institutional practices. Neoliberal ideology holds that the market model is the best way for all organizations, including public institutions, to operate. In a sense, the market model is presented not only as the most effective and efficient model, but as the panacea for all societal ills. Beyond this emphasis, the principal elements of the ideology are: 1) radical individualism, 2) limited government, and 3) flexible labor. I discussed these elements in relation to society in general in the Fall 2017 issue of NEXO, 21(1).

Radical individualism has contributed to reframing higher education as a private good rather than a public good. As such, government should not fund higher education as it is the student who benefits from the educational experience, and it is the student who should pay for it. Fifty years ago, governments covered 75% of the costs of a college education; today it covers 25%, meaning students and their families now cover 75% of the costs. Limited government emphasizes reduced regulation of the economy as well as limited social support for individuals and their families. Tax cuts ensure that governments do not have the revenues to support public higher education as they did in the past.

Finally, flexible labor means eliminating fixed costs such as faculty tenure. This alters the traditional employment relationship between the employing university and faculty by increasing control of the terms and conditions of employment among university administrators. Consider, for instance, the proportion of today’s faculty who are on the tenure system and those who are not. A recent report by the American Association of University Professors (AAUP) on contingent faculty set their percentage of instructional positions in 2016 at 73 percent. This shift raises critical questions about academic freedom, which is what tenure protects, and shared governance.

It is important to keep in mind that corporations and public universities are distinct entities. They differ in terms of status, mission and values, and how they carry out their operations. In business, a corporation is a legal organizational entity granted a charter by a state and exists apart from its owners, the shareholders, while serving their interests. It limits their liability while paying them dividends. Its central aim is to generate profits. As such, both  corporations and their shareholders are driven by private interests, and both have to pay taxes.

Public universities, on the other hand, are institutions established by a state constitution or statute as educational entities that are tax exempt. They are governed by state constitutions and statutes and cannot discriminate or deny individuals their constitutional rights. Their mission is social: to serve the public good by providing a higher education that fosters societal development and builds democracy by educating members of society. Education is seen as a human right and a public good. The missions of private sector corporations and public universities are distinct, one serving private interests and the other the public good.
These missions are grounded in different values. Corporations value individual freedom in the market and stand against government regulation. Universities value individual growth and development as a way of promoting societal progress. By competing on the market, corporations withhold knowledge from others so that they can stay ahead of their competitors. Universities value academic freedom, ensuring that all aspects of society can be studied, and the knowledge that is produced is shared for the good of humanity.

Corporations and public universities also differ in terms of their operations. Day-to-day operations in corporations are organized along hierarchical structures in which the scope of authority increases as one moves up the hierarchy. Moreover, there is an emphasis in corporations which calls for strict obedience on the part of employees, who are to carry out directives without questioning them, although during periods of crisis the tacit knowledge of employees is sought as organizational adaptation is pursued. Once stabilized, however, the organization returns to its previous structure of authority and communications.

Public universities are different. Shared governance is the principal tenet in the operation of public universities. According to the Association of Governing Boards of Colleges and Universities, in its 2017 white paper titled Shared Governance: Changing with the Times, “Shared governance is the process by which various constituents (traditionally governing boards, senior administration, and faculty; possibly also staff, students, or others) contribute to decision making related to college or university policy and procedure” (p. 3). This parallels the view of the AAUP, which holds that an interdependence exists among governing board, administration, faculty, students, and others that calls for appropriate communication and full opportunity among these core stakeholders to engage in joint planning and effort in the operation of a college or university.

What this looks like in practice is a function of several factors at micro, meso and macro levels. Which level is primary depends on the point in time in which one is interested. Today, it is the macro movement of neoliberalism which is primary, as that is the ideology that has pushed and succeeded to a large extent in corporatizing universities. This has had several consequences for the governance of universities: 1) the role of shared governance has receded in importance in the day-to-day governance of universities; 2) the balance of power and authority has shifted toward administrators; and 3) faculty have been subjected to a series of performance measures that disproportionately values productivity over shared governance participation. Corporatization has also had consequences for students, whose role has been reframed from one in which they are co-learners to one in which they are customers.

I first learned of the notion of “students as customers” in 1984, when I heard senior faculty critiquing the idea. Since then the reconstitution of students as customers has not only grown, it is now fully institutionalized in universities, especially in how they are recruited. It also has had implications for the relationship between students and faculty. Given that universities must rely on tuition and fees for their operations, they must actively compete for students, and the way they do this is by utilizing “customer recruitment” practices employed by businesses—branding and investing in “infrastructure incentives” (amenities such as leisure facilities, stadiums, luxury dorms, recreation centers) that will attract potential students.

As well, the student/faculty relationship has shifted from one which Peter Wood, President of the National Association of Scholars, in a brief article titled “Students are Not Customers,” describes as:
…a hierarchical relationship between someone who seeks knowledge and others who teach knowledge. It requires some degree of humility and forbearance on both sides. Students have to admit that they don’t yet know; teachers have to admit that those who do not-yet-know-but-would-like-to are in a worthy position that deserves its own respect.”  

Treating students as customers can shift the responsibility for learning from students to faculty, can negatively impact teaching evaluations, and can lead to transactional relationships in which students do not feel that faculty care about them. This relationship may have implications for the work lives of students after they leave college. For example, a study by Gallup-Purdue in 2014 found that for “graduates [who] recalled having a professor who cared about them as a person, made them excited about learning, and encouraged them to pursue their dreams, their odds of being engaged at work more than doubled, as did their odds of thriving in all aspects of their well-being” (“Life in College Matters for Life After College,” 2014).

These are some of the ways by which neoliberalism has transformed public higher education. Corporatization must be seen as a totalizing process that transforms the public university as a whole: how it frames and carries out its mission; the role of faculty in shared governance; academic freedom and research; the relationship between students and faculty; and the role of public higher education in society. These are core features that are diminished by market logic. Employees of universities should take time to understand how their institutions are being transformed, and what the implications of that transformation are not only for themselves as employees, but also for society as a whole. Do we really want institutions that feel more like expensive resorts, or shall we get back to the university as an institution that serves the public good?