Business Models into the Educational Environment

“University-as-Business” Model

Higher educational institutions, such as universities and colleges, have been firmly established in terms of their organizational culture and purposes. So far, the primary goal of all educational establishments has been to provide sufficient and high-quality knowledge to students and ensure the development of efficient teaching and learning strategies. However, the current shift from a purely educational institution to a “university-as-business” model should provide new roles and functions that will definitely penetrate to the organizational culture of Australian establishment due to the new patterns of running universities as business venture. In this respect, it is a logical outcome that the “university-as-business”model can perverse the traditional values and have an adverse impact on teaching and scholarship in the arts and social sciences because of the enhanced functionality of the new educational frameworks.

The emergence of new business models and their integration to the educational domain can distort the genuine objectives of teaching and education because of the stronger emphasis placed on achieving such business goals as productivity, profitability, and competition. Public sectors are about to introduce New Public Management, which fails to sustain such ideological and strategic concepts as transparency, quality, efficiency, and profitability. Therefore, the business model of education in the public sector ignores the foundational factors of successful education and, therefore, it threatens the quality of an academic process as well. Managerial aspects of educational environment, along with neoliberal views on academic curriculum and scholarship competition will prevent the admission committee from recognizing students’ skills, knowledge, and preparedness for the academic process. Rather, the priority will be given to business-centered purposes, depriving applicants of fair competition. According to Loze, “NPM definition of education ignores the most important aspects of the education process and, therefore, poses a fundamental threat to education itself”. The shifts in traditional values and distortion of old-fashioned images are inconsistent, resulting in inadequate management of educational institutions.

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The organizational dysfunction in educational institutions could be partially explained by improper replacement of educational culture with business models and corporate culture. As Sanderson and Watters argue, “the recent changes in the sector indicate a “corporatisation” of higher education and that this process of “corporatisation” is seeing the loss of “traditional” values and practices”. The latter specifically refers to pedagogical practices, community service, academic freedom, and research, which stand at the core of higher education, developing organizational dysfunction and failure to meet academic requirements. The existing gap between business frameworks and organizational culture is the major problem that poses a threat to the stability and welfare of the educational system. The rapid transition to the “university-as-business” model can destroy the previously existing concepts and principles that ensure successful knowledge acquisition.

The genuine underpinnings for introducing scholarship and teaching in social art and sciences can be distorted because of the significant shifts in organizational culture. In this respect, the cultural discourses rely on two aspects of effectiveness, namely organizational focus and the emerged contrast between control and stability as well as change and flexibility. Both dimensions can be juxtaposed to each other creating a conflicting matrix embracing such attributes as flexibility and adaptability, along with stability and control. In this respect, Sanderson and Watters (2006) single out four basic dimensions of values outcomes with the penetration of business models, such as human relations, internal process, open systems, and rational goal model. All these models explain how moral and ethical values have been transformed to adjust to a new business framework. On the one hand, human relations seem to adhere to the educational objectives and visions of an academic environment because this model views individuals as viable members of a social circle rather than as isolated individuals.

Corporate Principle of Governance in Universities

From times immemorial the idea of education has been closely connected with enlightenment and willingness to expand the outlook. When it comes to the arts and social sciences, stronger reference is made to propagating such concepts as humanity, morally justified actions, and total conception of a university as an ideologically, ethically, and spatially organized establishment. Certainly, the spatial dimension plays an important role in understanding how the surrounding environment influences educational activities. The institutional form of a university is closely associated with the disciplines proposed to students because it shapes an ideological and philosophical background within which new perceptions and attitudes are created. As soon as the model turns into a business-like framework, studentєs perception can wrongly be represented. The corporate definition of a university influences not only its culture but also the very background introduced by the campus. As a result, the corporate nature of educational establishments is associated with academic labor rather than with research demands. In the corporate university, instructors are expected to gain new skills and knowledge in entrepreneurship and management, but they fail to comply with the traditional norms of learning and teaching social arts and sciences. When introducing corporate principle of governance in universities, it is essential for the head of an educational establishment to integrate training programs and educate teachers and academic counselors about the basics of business administration. However, as soon as this gap exists, the corporatization will have a devastating effect on the firmly established values and philosophies.

Reconciling the existing values with the emerging ones should be the main question for educational establishments in Australia because these two dimensions are rigidly juxtaposed so far. However, the “university-as-business” model is often represented as an outcome of the globalization, which is an inevitable process. Nonetheless, it has been discovered that “…even the rapid growth of international trade of education, which supposedly provides the occasion for homogenization of education because it refers to a direct exchange of practice, has created conflicts among education programs”. The economic disputes have been predetermined by the international trade of academic information. At this point, the global market has contributed to the local reluctance of universities to implement business models because the process of corporatization can hinder reaching an economic and cultural consensus between colleges.

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Why Business Model within a University Environment Can be Damaging?

The inevitability of implementing business model within a university environment can be damaging for the sustainable system of scholarship and teaching because of the lack of sustainability supporting funds and investing into new strategic objectives. As a proof, the report presented by Michael (2012) demonstrates that 4 universities out of 15 have more than 50% of support staff rather than educational staff which imposes additional financial expenditures and complicates the process of granting scholarship to students. Moreover, the proposed ratio is constantly increasing, leading to the inability of universities to come up with the rapid changes in the business-like academic business. Hence, the relationship between students and a university becomes much more complicated because of the necessity of paying great tuition fees for education. In fact, a student becomes gradually customized, which distorts the original academic goals and understanding of the purpose of education. Considering students both as customers and as learners is a challengeable perspective because it prevents them from understanding the reasons for achieving scholarship in the arts and social sciences. What is more threatening is that there is a growing tendency of considering universities to be suppliers of students to the international university market.

The problem of estimating the benefits of introducing business models into the educational environment is the major question because it threatens the possibility of engaging into the process of learning and teaching the arts and social sciences. In this respect, Hall-Taylor (2000) refers to the challenge of corporatization as the one that restricts students’ possibility of estimating the veritable value of education. Additionally, the concept of managing the academic environment should be congruent with teaching perspectives. In this respect, the university business in Australia is a relatively new phenomenon which does not permit entrepreneurs and educators to cooperate fruitfully and recognize purposes relating to business and educational environment. The dominance of economic ideology fails to establish a consistent organizational culture that will not be deprived of philosophical and ethical values followed by students and instructors.

The relationship between organizational and institutional factors is essential for filling in the gap between educational model and business models. In this respect, the change in corporate style of Australian universities would imply the threat of depriving academicians and students of academic freedom. To enlarge on this issue, the concept of freedom and equality implies independence from financial issues, with stronger reliance on students’ skills, talents, and abilities. A customized approach, therefore, destroys this underpinning that contributes to the quality of services provided.


In conclusion, it should be stressed that “university-as-business” model creates potential threat to scholarship and teaching in the arts and social sciences because students become customized objects that should pay for the services provided at educational establishments. Specifically, the adverse effects relate to the shifts in organizational culture, the existing gap between corporate governance and educational values, as well as teacher’s lack of competence in governing universities as business organizations. What is more threatening is that students are now perceived as customers rather than as individuals with special learning needs.

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