Viewpoint: Why education is not like business
By Seth Rosenblatt
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Government institutions exist for a different purpose than businesses, and they should operate by a different set of rules.
Much of the recent political chatter has claimed that government is inefficient, inept, and wasteful, and the oft-cited remedy for such failures is to make government—including public education—act more like business. After all, isn’t it capitalism—the enterprising spirit, the competition, and the focus on the bottom line—that has made this country great?
As someone who studied economics and worked in business for 20 years, I am very much a capitalist, so on the surface this point of view has appeal. But even a cursory review will demonstrate that these arguments miss the point: Government institutions exist for a different purpose than businesses, and they should operate by a different set of rules. These distinctions are not trivial and are not just based on a mindset, but rather by specific design and for specific purposes. I have grouped these distinctions into four specific areas to consider when we evaluate the effectiveness of our governing institutions and our elected leaders. These areas are (a) mission and focus, (b) risk profile, (c) decision-making, and (d) measuring value.
Mission and focus
In business, the mission of the organization is to deliver return to shareholders (i.e., make money). Of course, “mission statements” are often presented as the way in which that organization will create value (e.g., Google’s mission is to “Organize the World’s Information”), but these mission statements are a means to an end—the end being to maximize shareholder value. This profit motive is the driving force behind capitalism and the catalyst for innovation, efficiency, and competition.
For more on school reform, see:
If education were a business…
Readers sound off on value-added model, district efficiency
Government agencies, on the other hand, are not motivated by profit, but rather by a “mission” in the more literal sense of the word, e.g. to educate children, to fight fires, etc. In this way, government agencies are more like nonprofits than for-profit corporations. This very purpose shapes the goals set by the organization, the types of people it hires, and the context in which those employees work.
sarosenblatt
February 18, 2011 at 1:49 pm
I appreciate all of the comments on the article and the lively debate! I would argue that we are all generally in much agreement (including the person who mentioned the rebuttle). I am in no way suggesting that education (or government) can’t learn from business. They absolutely need to look at processes, the right metrics, accountability, just like a business does. And I also agree that there are a lot of structural and legal issues (like the lack of flexibility on how teachers are hired, paid, etc.) which inhibit the education community from utilizing some of these best practices from businesses. These notions are not inconsistent with the premise of the article, which was to remind us that even if one were to adopt all of the best practices of business, there would still be fundamental differences on many dimensions between a private business and a public institution. Please do not take the article as giving excuses for poorly run government institutions — absolutely not! And I agree that we are failing many of our students in this country! It’s just that we need to focus our energies on making improvements in the context of understanding the unique requirements, goals, and environment of public institutions, which are not always identical to those of their private counterparts.
sarosenblatt
February 18, 2011 at 1:49 pm
I appreciate all of the comments on the article and the lively debate! I would argue that we are all generally in much agreement (including the person who mentioned the rebuttle). I am in no way suggesting that education (or government) can’t learn from business. They absolutely need to look at processes, the right metrics, accountability, just like a business does. And I also agree that there are a lot of structural and legal issues (like the lack of flexibility on how teachers are hired, paid, etc.) which inhibit the education community from utilizing some of these best practices from businesses. These notions are not inconsistent with the premise of the article, which was to remind us that even if one were to adopt all of the best practices of business, there would still be fundamental differences on many dimensions between a private business and a public institution. Please do not take the article as giving excuses for poorly run government institutions — absolutely not! And I agree that we are failing many of our students in this country! It’s just that we need to focus our energies on making improvements in the context of understanding the unique requirements, goals, and environment of public institutions, which are not always identical to those of their private counterparts.
Dennis Pierce
February 18, 2011 at 7:00 pm
John, the answer to your second comment can be found in this article. Private schools are so sought after because they can pick their own “customers,” i.e. students. Public schools don’t have that luxury. It makes sense that private schools would outperform public schools, because they can accept or reject students at their will.
Dennis Pierce
February 18, 2011 at 7:00 pm
John, the answer to your second comment can be found in this article. Private schools are so sought after because they can pick their own “customers,” i.e. students. Public schools don’t have that luxury. It makes sense that private schools would outperform public schools, because they can accept or reject students at their will.
knmuray
February 21, 2011 at 5:03 pm
I so wish that people would realize that the business of teaching cannot be compared exactly to that of running a corporate organization that mass-produces products. :-{
We DO need to look at accounting, and the lack of procedural checks/balances…we DO need to look at protocols–consistency of rules/regs…we DO need to consider levels of management, and clean up top-heavy admin, so that monies (and manpower!) are focused tw our classrms and sts, where the resources would be most effective–an extra tchr in the sch/clssrm benefits the sts far more than a resource tchr in an administrative office, lowering class sz and directly working w/sts to help them understand and master content standards.
I am still waiting for State/Fed Gov’t to see that their data anaylsis is flawed–comparing “oranges and apples”–and that they need to track the same grp of sts longitudinally, if they are going to really see accurate, equitable movement of scores/progress…no business would measure their gains using mismatched data, so why do we constantly see different groups of sts’ scores compared to ea-others’?
I.e., this yr’s 8th gr scores will be compared to last sy’s 8th gr scores, BUT those sts are now 9th graders, totally different individuals who took the test.
Imagine, if this flawed analysis were corrected, we could see more accurate data on progress of sts, as they go thru our sch system…longitudinal data anaylsis, a very basic, common business research practice, currently NOT being followed by our Gov’t DOE. :-{
knmuray
February 21, 2011 at 5:03 pm
I so wish that people would realize that the business of teaching cannot be compared exactly to that of running a corporate organization that mass-produces products. :-{
We DO need to look at accounting, and the lack of procedural checks/balances…we DO need to look at protocols–consistency of rules/regs…we DO need to consider levels of management, and clean up top-heavy admin, so that monies (and manpower!) are focused tw our classrms and sts, where the resources would be most effective–an extra tchr in the sch/clssrm benefits the sts far more than a resource tchr in an administrative office, lowering class sz and directly working w/sts to help them understand and master content standards.
I am still waiting for State/Fed Gov’t to see that their data anaylsis is flawed–comparing “oranges and apples”–and that they need to track the same grp of sts longitudinally, if they are going to really see accurate, equitable movement of scores/progress…no business would measure their gains using mismatched data, so why do we constantly see different groups of sts’ scores compared to ea-others’?
I.e., this yr’s 8th gr scores will be compared to last sy’s 8th gr scores, BUT those sts are now 9th graders, totally different individuals who took the test.
Imagine, if this flawed analysis were corrected, we could see more accurate data on progress of sts, as they go thru our sch system…longitudinal data anaylsis, a very basic, common business research practice, currently NOT being followed by our Gov’t DOE. :-{