Page 131 - Crisis in Higher Education

102 • Crisis in Higher Education

passing a licensure exam. As shown in Table 5.1, missing a key customer
group impacts all root causes. It leads to a poor understanding of the
universities’ missions, less support for government subsidies, and less
pressure to control costs. When employers are involved, standards are
maintained and enhanced, students focus on outcomes, and there is
support for having high performance standards.
• Chapter 9: Government’s Role in Higher Education: No entity exists
without some government oversight, and higher education is no
exception. It is impacted more than usual because the federal gov-
ernment and, in the case of public universities, state and local gov-
ernments provide substantial funding. Over the past several years,
federal subsidies have increased while state and local subsidies have
declined as a percent of university revenue. Table 5.1 shows that
government impacts nearly all of the root causes. As a customer,
the government has a right to expect the efficient and effective use
of resources, determine how much support it provides, be con-
cerned about the cost and quality of degree programs, and maintain
standards.

5.2 ORGANIZING PARADIGM FOR HIGHER EDUCATION

When organizations, like universities, have multiple customers and offer a
knowledge-intensive service, they need a different approach—one that can
rapidly adapt to new ideas and meet the needs of all customers. The orga-
nizing paradigm is listed here and discussed in the following sections.

1. Mediator: Universities mediate relationships between students who
want to learn and potential employers who want to hire qualified
employees.
2. Professional service organization (PSO): Universities are PSOs with
highly educated experts who provide assistance to address complex
problems; specifically they conduct research and develop high-quality
curricula.
3. Service dominant logic (SDL): These highly educated experts have
frequent interaction with customers and suppliers. This exchange of
knowledge continuously improves the value that customers receive.
This is sometimes called value co-creation.