Page 266 - Crisis in Higher Education

Reforming Administration and Management • 237

In addition, deans and department chairs often have little or no control
over how revenue that their college or department generates is used. They
cannot use it to hire additional faculty, reward high performers, expand
programs, advertise to attract more students, and other actions that leaders
should be able to do. It is quite common for some colleges and departments
to generate revenue that is far in excess of their costs, even when university
overhead is added. Excess revenue from these cash cows subsidizes colleges
and departments that have substantial losses. How well would a for-profit
company function if one division is very profitable, but it cannot invest
in new technology and skilled people to expand its operations because it
is forced to subsidize another unprofitable division? Colleges and depart-
ments need autonomy, access to resources, and permission to become entre-
preneurial, so they can package and sell instructional programs or research
services that add value and generate revenue.
One college or department subsidizing another might be acceptable if
a new college or department is being created and the subsidy is neces-
sary for a year or two until sufficient revenue is generated. The problem
with universities is that these subsidies occur year after year. The cash
cows, who have to fight to replace faculty who retire or take a different job,
spend countless hours preparing proposals to justify the replacement and
arguing with central administration about the importance of this posi-
tion to its mission and revenue stream. Their time would be better spent
on finding ways to do the following:

1. Generate additional revenue by improving and expanding existing
programs
2. Reduce costs by investing in training and technology to improve
productivity
3. Increase revenue by identifying new programs or new platforms for
existing programs.

11.5.2 Involving Faculty in Planning and
Managing the University
Part of the process to decentralize decision making is creating ways
for faculty to participate in planning and managing universities at the
highest level, including strategic planning. This begins by encourag-
ing and supporting tenured faculty to apply for high-level administra-
tive positions. Outside candidates are appealing because they put their