Universities are not businesses: an implication
July 22, 2007
In a company, you can justify a more expensive thing on the grounds that it never the less makes the company more money, either directly or indirectly (through increased productivity, for example). Because a company makes money, what matters is not the absolute expense but the profit/expense ratio.
(It matters so much that business has a special term for it, and spends a great deal of time and effort working out the numbers.)
Without profits, in a university the force is generally for low expenses, period. Sometimes (if you are lucky) you can get people to take a global view, justifying one expense on the grounds that it reduces another one by more, but this can be complicated if the expenses involved cross organizational boundaries (where group A is paying more so that group B can save money).
(While universities make money, most of it comes in in ways that are difficult to link to anything in specific that the university did. Generally, no one can tell why undergraduate enrollment is up 20% or the like.)
Of course this is not unique to universities; many companies have portions that don't earn money but are just necessary overhead, and I expect that they are subject to many of the same pressures.
Comments on this page:
* * *
Atom feeds are available; see the bottom of most pages.