In the last forty years, there has been a revolution in management theory, largely driven by insights of W. E. Deming and the Quality Circles model, first implemented successfully in Japan and largely responsible for the revival of Ford in the U.S. This new model flattens the hierarchical structure of management, eliminating layers of middle-level bureaucrats and providing both more autonomy and responsibility to front-line teams of workers and supervisors. Such managerial reforms are long past due in the world of higher education.
The basic structure of higher education management contains many elements deriving from the Middle Ages (chancellors, provosts and deans) and has changed very little in the twentieth century. There has instead been a huge expansion in numbers of administrators in the last fifty years, as colleges and universities have added hordes of vice-presidents, vice-provosts, associate and assistant deans: “deanlets” and “deanlings” as Benjamin Ginsburg has labeled them in his recent The Fall of the Faculty. As Ginsburg documents in some detail, most of these academic middle managers act primarily to justify their own existence, engaging in an endless cycle of meeting to plan and planning to meet. From 1975 to 2000, the cost of a college education tripled, and much of this cost represents the support of administrators, whose numbers increased by 85% during this period, and whose total salaries skyrocketed 240%. According to a 2010 report by the Goldwater Institute in Arizona, inflation-adjusted administrative costs per student increased 61% from 1993 to 2007 at leading universities. Middle management salaries have reached truly shocking levels. A generation ago, associate deans received exactly the same salary while serving for a short term in the administration that they had received as professors, with just an addition of one month’s summer salary. Now, it is not unusual for associate deans to serve in perpetuity and to be paid two or even three times as much as the average professor.
Based on years of experience in academia, I have concluded that both deans and “colleges” (as administrative sub-units of the university) are obsolete and costly relics. Universities could save something in the neighborhood of 10% of their total costs by simply eliminating this middle layer. Not only would this represent no loss of educational value, it would, to the contrary, free departments to pursue excellence without interference from uninformed and self-serving administrators. Deans rule their colleges as absolute potentates, free to starve some programs in order to feed fashionable and politically favored ones. This is the academic version of crony capitalism: instead of pursuing excellence in teaching and research, departments are motivated to engage in rent seeking behavior, earning the favor of powerful administrators.
The university president’s office could manage the essential university-wide services: student accounts, physical plant, libraries and museums, student records, dorms, and parking. Everything else can be pushed down to the departmental level: advising, curriculum, hiring and promoting, even admissions. Each department should have its own autonomous budget, keeping a fixed percentage (say, 80%) of the tuition generated by its classes, and 100% of all outside grants its members bring in. We can merge all smaller departments and ‘centers’ into larger, more traditional departments. Presidents could maintain small funds for seeding new departments.
Such reform would bring about real competition between departments, since each department would be incentivized to maximize its quality of instruction. Grade inflation could be controlled by imposing a fixed grading curve on all core courses and a financial penalty to departments for inflated grades in all subsequent courses.
A further reform in the same direction would help to control tuition costs, bringing true price competition to the process: allow each department to offer tuition rebates tied to specific courses. Departments would then be motivated to offer the highest possible quality of instruction at the lowest possible price.
In the case of very large departments (such as history, English, physics and chemistry), economic competition could be made more nearly perfect by dividing the departments into several independent, self-governing units, free to complete with each other on the basis of quality and price.
By introducing market discipline and providing departmental faculty with direct responsibility for managing their enterprises, such reforms would bring a further advantage: that of educating professors in the nature of the free enterprise system. As long as professors are dependent on a top-down, highly bureaucratic system, they will continue to see free enterprise as alien and frightening, attitudes that they will transmit to their students. Once the faculty has been freed from their serfdom to outdated bureaucracies, they will begin to appreciate the intrinsic value of participating as full partners in small and autonomous enterprises.