Home Trade school Why academic administrators should learn the language of business

Why academic administrators should learn the language of business

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Which college majors are, on average, the smartest?
Philosophy majors, followed by physics and astronomy, economics, and math majors, score the most standard deviations above the mean on the GRE.

Which college majors make the most money mid-career (who didn’t earn a graduate or professional degree)?
Economics, engineering, and math majors rank highest, followed, yes, by philosophy majors.

Which college majors are experiencing the fastest salary growth?
Philosophy majors, naturally, followed by math, economics, political science and, believe it or not, art history majors.

As observed by Matthew Yglesias, the widely read business and political blogger and journalist with a BA in philosophy from Harvard, a philosophy degree signals intelligence, which is why big tech companies like Google often hire technology majors. philosophy for managing algorithm developers, computer graphics and visualization. specialists, coders and others with technological skills.

It turns out that the study of epistemology, ethics and metaphysics is not only valuable on its own, but as a proxy for other attributes, especially logic and reason-based thinking. rules.

Instinct, hunches, and intuition are usually poor guides for decision making. In today’s challenging economic environment, it is essential that academic administrators at all levels gain a solid understanding of data-driven decision-making and academic program evaluation and management.

A good place to start is with Robert Gray Atkins Start, stop or growan eminently digestible guide to understanding university program finances, course and departmental economics, changing market demand, and strategies for deciding which programs to launch, sustain, end, or expand.

This book also outlines the process that campus leaders must follow if they hope to strengthen their relationship with faculty and improve the financial health of their institution by optimizing costs, increasing retention, and pursuing growth strategies by launching new major news and entering new markets.

Let me note, externally, that the Atkins book is partly a sales pitch for Gray Associates, a higher education data analytics, software, and strategy consulting firm. Generally, I hesitate to refer to literature that can be dismissed as self-serving or self-serving, but in this case allow me to make an exception. The information provided by this book is far too valuable to be dismissed as bloat, sales, or mere marketing pablum.

Atkins begins by discussing a concept that deserves far more attention than it typically receives: the trade-offs, inevitable compromises, trade-offs, sacrifices, and opportunity costs that academic decision-making entails.

Economics is, after all, a matter of trade-offs, since every choice involves a cost, whether in terms of forgone options or alienated stakeholders, and the economics of higher education is no exception.

The book reminds us that the road to financial health or the sustainability of an institution is strewn with pitfalls.

  • Between emphasizing career-focused education or more traditional liberal arts and science education.
  • Between investing in existing programs or launching new ones.
  • Between directing resources to academic programs, faculty research or support services and scholarships.

Precisely because trade-offs are painful, ethically and politically, directors must handle decisions with skill, fairness, diplomacy and respect.

Along with the concept of trade-off, Atkins emphasizes the notion of margin, the difference between the revenue generated by a program or course and the staff, laboratory, and support costs it incurs. Not-for-profit colleges and universities, of course, do not generate profits. But these institutions must still generate sufficient revenue – a margin – to pay the cross-subsidies and overheads that allow the institution to operate.

Calculating each program’s margin is not an easy task, and much of Atkins’ book explains, in easily accessible language, how to do it. As Atkins explains, markups should generally be at least three times the cost of teaching.

Contrary to what you might think, some programs with lower cost teachers and high enrollment classes, such as English and History, tend to have lower than average markups, while some programs at higher cost, such as IT and nursing, produce above-average margins. . In fact, nursing has margins 40% higher than average, despite high costs and enrollment limits imposed by accreditors and clinical providers.

So what should administrators do? The President or Chancellor, Provost, Deans, Department Chairs and Program Directors shall:

▪ Cultivate a common framework of understanding.
Without a common set of accepted facts and a shared framework and language for interpreting the data, building consensus is likely impossible. Even then, however, it will be difficult to reach an agreement as priorities clash and interests collide.

▪ Evaluate every program, whether currently in existence or proposed, rigorously and systematically.
Such an assessment involves:

  • Assess student demand
  • Measure student enrollment and success, disaggregated by gender, race, ethnicity, and Pell Grant status
  • Calculation of the cost per credit hour completed
  • Measure service overhead
  • Examine market trends and identify skills that should be incorporated into particular programs
  • Estimation of likely employment and earnings outcomes, including job vacancies per graduate
  • Identification of competitors on campus and online

▪ Stay focused on the mission.
As William F. Massy, ​​Professor Emeritus of Education and Business Administration and former Vice President and Vice Provost at Stanford, says, a successful strategy for making a university more financially sound must be mission-focused, intelligent in the market and aware of margins. . It must “use market revenues to invest” in its values ​​and its historic mission. Anything less will rightly alienate faculty, alumni and students.

▪ Seek efficiency.
Efficiency is not a four letter word. It is one of the means – along with grants, contracts, patents, partnerships, philanthropy and ancillary revenue – that institutions use to generate the surplus needed to invest in college priorities – existing academic programs and futures, student services, research and community partnerships – as well as in facility operations, maintenance, regulatory compliance, financial aid administration, student mental health and a host of other expenses.

A key to maximizing efficiency is to optimize course offerings, scheduling, staffing, and delivery modalities. In some cases, this will certainly produce a setback: in

  • Reduce the number of course exits
  • Enforcement of registration minimums
  • Reduce the number of under-subscribed sections
  • Eliminate duplicate courses
  • Master the staggering of programs
  • Increased class size caps
  • Offer less popular courses over a cycle
  • Require senior faculty to teach fewer senior and advanced classes and offer more service classes

But in other cases, efficiency can actually increase enrollment and speed up student graduation. Offering more required course sections or pathways at times that students find convenient or online can be a win-win, synchronously or asynchronously, can increase enrollment in departments and eliminate graduation bottlenecks. of a diploma.

▪ Focus on retention.
The simplest and most direct way to improve an institution’s finances is to retain more students. A single failed class that leads to a student dropping out or transferring typically costs a college tens of thousands of dollars in lost revenue. It is much cheaper to keep a student than to find and enroll a replacement.

▪ Be strategic.
To be strategic, directors must be attentive, determined, proactive, decisive, forward-looking and goal-oriented. It involves an awareness of threats and opportunities and a commitment to making decisions based on evidence and informed intuitions. It also means aligning recommendations with the institution’s mission, financial health, and long-term viability.

The techniques described by Atkins can, of course, be used for better or for worse. They are tools, after all, and any instrument, in the wrong hands, can be used for evil: for example, luring undergraduate students to institutions without any guarantee of four years of financial aid or luring students master’s degree in programs that result in high achievement. debt and poor job prospects.

The astute legal education analyst who writes under the pseudonym Unemployed Northeastern described some of the rather nefarious strategies some law schools have adopted to maximize revenue, rankings, and reputation.

At the beginning of the 20e century, elite law schools did their best to discredit and destroy what Lawrence Friedman called “the ethnic bar” – the night schools and correspondence schools that taught blacks, women, and recently immigrant lawyers – while implementing admission tests (which originally included an obligation to translate Greek and Latin texts) deliberately designed to ward off “intruders”.

Elite institutions then pioneered an academic rather than practical or professional curriculum, hired professors straight out of law school rather than the practicing bar, and taught law students “how to think like a lawyer”, rather than actually practicing law. .

More recently, as Unemployed Northeastern explained to me, accredited law schools have responded to a sharp drop in enrollment in JD programs during recent recessions by implementing a slew of Master of Laws degrees – the MLS, the MJur and LLM, among others – of questionable quality. or uncertain value.

Now, to make law school applications easier, a growing number of law schools no longer require the LSAT, and the American Bar Association is considering dropping its requirement that law schools use any standardized test when taking the LSAT. assessment of student applications.

So make sure your institution is striving for financial health and sustainability, it follows the advice of Robert Gray Atkins and William F. Massy: Stay mission conscious and values ​​centered. Anything less is deeply unethical.

Steven Mintz is a professor of history at the University of Texas at Austin.