U . S . Entrepreneurial Invisible Colleges : Infused and Disassociated Cultures

Small, nonselective, resource-poor colleges and universities educate approximately one-quarter of the undergraduates in the United States. Due to increasing costs, a greater use of technology, and a more competitive market, these institutions will likely face a difficult environment in the coming decades. One way that a few of these colleges are addressing these problems has been to build or acquire nontraditional sources of revenue – businesses that may or may not be a core piece of their original mission. Graceland University and its ownership of the world’s largest seminar company and Brigham Young University – Hawaii and its origination of Hawaii’s most successful tourist attraction work as excellent case studies for discovering the ways in which a nontraditional revenue source can impact institutional planning and the organizational culture of the campus. While these two examples illustrate the range of connectedness between the nontraditional revenue generator and its college, it was found that the institutions were comparable in their overall adherence to the principles found in the entrepreneurial literature. The differences in that adherence between the two institutions provide a good cross-case analysis for other institutions that may be looking at this technique for raising revenues. Additionally, it was discovered that an entrepreneurial invisible does not have to compromise its own educational character in order to maintain a successful nontraditional revenue stream, although the two have an impact on each other’s culture. Additionally, although there are benefits for a college that acts entrepreneurially, the additional expertise and budget variability create new challenges for institutional leadership and planning. Definitions Invisibles In 1972, Alexander Astin and Calvin Lee coined the term, “invisible colleges,” in reference to four-year higher education institutions in the United States that were neither big nor selective, and therefore, though playing an important role in the higher education landscape, were not as noticeable as large and medium-sized public universities and prestigious private colleges. At that time, the authors predicted an extremely rough road for these institutions in the eighties and nineties. Because of an even more competitive environment, increasing costs of technology and the replacement of an aging physical plant, and the public necessity to have a wider variety of offerings, those colleges with non-selective small enrollments and limited endowments will likely face an environment even more difficult than what was presented by the last three decades. Entrepreneurial Invisibles Large research universities and prestigious privates have been able to supplement their revenues through government and corporate research. This is not an alternative open to most invisibles. And, while there are a number of ways these unseen institutions might ensure their survival and success, one possibility entails the discovery and development of revenue sources other than through the customary methods of tuition, fees, and fundraising. These “entrepreneurial invisibles” are attempting to create revenues by looking in areas outside the usual practice of most institutions in higher education. The nontraditional revenue sources for the purposes of this research do not include the categories of distance education, satellite campuses, and web-based learning programs. From a historical standpoint, these are relatively new styles of delivery and could be seen as “disruptive technologies” (Bower and Christensen, 1995; Christensen, 1997; Adner, 1999) by some in the higher education industry. Yet, the outcomes and products are not significantly different from what would have taken place behind ivy-covered medieval walls using chalk and slate. These innovations are still in conventional areas – delivery systems, campuses, and disciplines using essentially the same collegiate administrative model. More importantly for this discussion, these different types of delivery have also become so common in the United States as to virtually define the word, “traditional. ” Even as early as the late 1990’s, at least 1,680 institutions offered 54,000 online courses enrolling 1.6 million students in the U.S. (Wood, 2001). Entrepreneurial invisibles for this research also exclude other specific practices by private higher education institutions that some would say utilize a business model or an adoption of a market practice. For example, several Figure 1: Similarities between Clark’s Entrepreneurials and MBM Components Clark Market-Based Management Strengthened Steering Core Mission System Enhanced Development Periphery Open Communication Discretionary Funding Base Internal Markets Stimulated Heartland Roles and Responsibilities Entrepreneurial Belief Values and Culture From Clark (1998), and Gable and Ellig (1993) colleges and universities have made dramatic reductions in their tuition prices, hoping to utilize the price cuts as part of a marketing campaign to bring in more students. Others have changed their focus to market-driven majors or have put much more emphasis on satisfying their “customers” by developing strong on-campus student life programs (Chronicle, 2003). These practices may indeed be similar to how some businesses perform, but they are not necessarily entrepreneurial. Entrepreneurial invisible institutions have attempted to create or purchase revenue-producing organizational units that are related to education, but are extended far beyond seats in the classroom on in front of a computer. Examples include managing large study-abroad programs, running large tourist attractions, sponsoring performing arts series in large metropolitan areas, establishing on-campus public recreation centers and public equestrian centers, and building public seminar programs. This new concentration on an expansion of revenue through nontraditional sources reduces the risk inherent in relying solely on tuition dollars and endowment income to meet expenses, and may also contribute to increasing levels of endowment. Expanding nontraditional income streams may also provide funds for operating expenses, lower tuition costs, and may increase the distinctive nature of the institution (Clark, 1998). Problem Although finding the answers to the questions “what do all the entrepreneurial invisibles do” and “what do all the entrepreneurial invisibles look like” would certainly be valuable to struggling post-secondary decisionmakers, such questions are beyond the scope of one piece of research. A more appropriate place to start is found in a subsection of entrepreneurial literature that suggests the importance of an infused entrepreneurial attitude and mission throughout an organization. Burton Clark’s (1998) Creating Entrepreneurial Universities addressed this finding for large, European universities. He found that a significant part of the university’s “pathway to transformation” includes the need to “develop a work culture that embraces change. ” That new culture may start out as a relatively simple institutional idea about change that later becomes elaborated into a set of beliefs which, if diffused in the heartland, becomes a university wide culture” (p.7). Market-Based Management (MBM) is another significant entrepreneurial organizational behavior theory suggesting that individual firms utilizing the framework of a free market economy in their internal systems will increase their chances for success. MBM purports that “through a well-developed and well-defined mission system, an organization can achieve a harmony of interests among its employees very similar to the harmony of interests that exists in a market economy” (Gable and Ellig, 1993, p.24). These key sources of research into entrepreneurial organizational behavior both cite the importance of a complete immersion of the entrepreneurial attitude through the entire institution. Figure 1 illustrates the similarities of the two theories, and the combination of the two will act as the “lens” through which the final case study institutions will be examined. Yet, it is very evident that some colleges in the United States embark on entrepreneurial ventures with little change occurring on the original home campus, and certainly not a complete immersion of entrepreneurial thinking in their citizenry. Students and staff at these schools are often oblivious to the sources of support, even when those sources come from very nontraditional means. This disassociated culture combined with the requirements of running an ancillary business would seem to wreak havoc for institutional planning. Therefore, the primary question that will be addressed for this paper is: What effects do nontraditional revenue activities have on an invisible collegiate institution, especially in terms of its institutional planning and organizational culture? Must these effects be infused in both the college and revenue generator, or can they be disassociated from each other? Structure of Investigation In considering the research framework for exploring the character of entrepreneurial invisibles, two questions can be used to establish the structure of the problem: Who are the entrepreneurial invisible colleges and universities in the United States (resource-poor, non-selective, with high nontraditional revenue streams)? Which of these emerge as being particularly good examples for case study analysis? Initial Screens to Find Invisibles The most appropriate manner of determining which colleges and universities warrant a more in-depth examination is to scan large amounts of quantitative data for information on institutions that have been successful in exploiting market niches and obtaining nontraditional sources of revenue, as well as meet the invisible (Astin and Lee, 1972) criteria. These numbers are readily available through database mining. By constructing a formula that compares nontraditional revenues wit