> if your organization's goal is profit rather than education.
The organization's goal isn't all that relevant compared to the results produced by the folks actually doing the work. Heck, their goals matter more than the organization's goals.
For example, a non-profit can easily be staffed by folks looking to just slide by. Remember - they're being paid just like the folks at the for-profit down the street.
Non-profit is merely a tax and investor-return status. That tells you nothing about what the organization actually does.
I disagree, profit vs non-profit is your raison d'etre and it affects all of your decision making, particularly the topline variety.
Say you're writing the FY2012 budget right now for your moderately successful for-profit degree program. You have an extra 10k. Do you spend it on better lab equipment or on subway ads? Subway ads would seem to be the more profitable choice a lot of the time. Actually, while we're at it, if we have a choice between an excellent and a mediocre professor, why don't we take the mediocre guy for less money and spend the difference on marketing? That's a sound business decision, because it will lead to more profit.
Now, maybe your consumer market will be so discerning as to punish schools who make decisions like this in the long run, but I'm not convinced they will.. good marketing can beat a good product in many industries and especially in something as hazily defined as education. Doubly so when you have customers who just want "a degree", take a look at Western New England University sometime if you want to see the definition of a paper mill. Their entire degree program is cops getting their masters for the contracted pay bump.. the emphasis is very much not on learning.
Again, I'd love to be wrong.. but can you really not see these incentives at work here?
Why do you feel non-profits don't make the same choices? Instead of spending an extra $100k on better lab equipment, they might spend it on empire building. If an administrator has 12 people under him rather than 10, it gives him a better case for a pay raise and makes him feel more important. Spending the money on marketing increases enrollment, and reduces the chance of layoffs/pay cuts.
(This phenomenon also occurs at for-profit companies, but the profit motive of shareholders can sometimes reign it in, e.g. the Gordon Gekko investor. Sometimes it can't, as in the case of GM or MS.)
> Actually, while we're at it, if we have a choice between an excellent and a mediocre professor, why don't we take the mediocre guy for less money and spend the difference on marketing? That's a sound business decision, because it will lead to more profit.
Profit is at most 10% of revenues. Why do you assume that that 10% has more effect than the 90% that goes to expenses?
In fact, non-profits are notoriously lax wrt expenses. They often cost more to deliver the same services.
Which reminds me, why are you assuming that it's better to spend 2x as much on an "excellent" professor? Sure, it's great for the folks in her class, but what about the folks who don't get to take a class because you spent all your money on excellence?
Or, if you like, what about the folks who can't afford that class because you spent so much on the professor.
The organization's goal isn't all that relevant compared to the results produced by the folks actually doing the work. Heck, their goals matter more than the organization's goals.
For example, a non-profit can easily be staffed by folks looking to just slide by. Remember - they're being paid just like the folks at the for-profit down the street.
Non-profit is merely a tax and investor-return status. That tells you nothing about what the organization actually does.