Universities are not businesses: an implication

July 22, 2007

Part of the peculiarities of the university environment is that universities are not businesses. Well, yes, of course. But consider one of the implications: universities do not directly make money.

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.

Written on 22 July 2007.
« Weekly spam summary on July 21st, 2007
An interesting issue when yum upgraded gaim »

Page tools: View Source, Add Comment.
Login: Password:
Atom Syndication: Recent Comments.

Last modified: Sun Jul 22 23:14:07 2007
This dinky wiki is brought to you by the Insane Hackers Guild, Python sub-branch.