Arnold Kling  

You Come to Resemble Your Customers

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Tyler Cowen quotes from a wide-ranging essay by David Graeber.

The growth of administrative work [in universities] has directly resulted from introducing corporate management techniques. Invariably, these are justified as ways of increasing efficiency and introducing competition at every level. What they end up meaning in practice is that everyone winds up spending most of their time trying to sell things: grant proposals; book proposals; assessments of students' jobs and grant applications; assessments of our colleagues; prospectuses for new interdisciplinary majors; institutes; conference workshops; universities themselves (which have now become brands to be marketed to prospective students or contributors); and so on.

One of my laws of business is that you come to resemble your customers. If your customers are slow to adopt new technology, then you will tend to be slow to adopt new technology. If you customers have low trust, then you will tend to have low trust, etc.

In higher education, government is often the customer. Grant-writing becomes a bureaucratic process because the entities offering the grants are bureaucratic. If government provided a smaller proportion of the funding in education, my guess is that this would make the structure of education more efficient and better at serving the people who are supposed to be learning.

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COMMENTS (10 to date)
david writes:

Hasn't the proportion of funding of higher ed that comes from student fees/etc. instead of state funds increased, not decreased, over the past couple of decades?

Gabriel Rossman writes:

"you come to resemble your customers"

see "coercive isomorphism" from DiMaggio and Powell ASR 1983 and the roughly 10,000 articles that have cited it.

I thought the original quote was odd because in corporations, most of the people *do not* do fundraising. Only a few specialised people do that.

In fact, I have heard (from several people) that they would not pursue a career in academia and join a corporation because they preferred to not have to fundraise.

AJ writes:

Arnold, once again a very astute observation from you.

Our knowledge of market/organizational dynamics is not nearly as well developed as market microeconomics, but this is instantly recognizable as true by those who have worked with a lot of different tyes of organizations in many markets.


Foobarista writes:

"Who are your customers" is an important one that people don't always appear to understand. An enterprise's customer is the entity that can decide whether the enterprise gets money or not, not necessarily the person who receives work (or even the person who pays the money).

The ultimate example of this distinction are tow lots that work with police. The person paying the tow and storage fee is definitely _not_ a "customer" - the real customer is the police department who gave the tow lot its contract. Prisons and schools (especially K-12) have similar "customer models".

In the case of multiple money sources, the more powerful customer will be the one that gives the most money and stays the longest. For colleges, the government is the customer that really matters, since students are dispersed, just pay for themselves, and pass through the college while the government never leaves.

Another example of "coming to resemble your customer" is nonprofits that get lots of government funding. They assume the bureaucratic shape of the government entity with whom they work most closely.

Les Cargill writes:

So the key is that students are not the customers. They are arguably the product; maybe not even that.

rpl writes:


Is writing grant proposals really all that "bureaucratic"? It's been a while since I wrote an NSF proposal, but my recollection of it was that you had to describe what you were going to do, why it was important, how much money you were asking for, and how you were going to spend that money to achieve the research goals. That doesn't seem too "bureaucratic" to me. In fact, it sounds like a reasonable approach to answering the question, "Why should we give you this money?"

What's more, I don't see how this is any different from the way you do business in the private sector. When, for example, a chip manufacturer negotiates a volume discount with an OEM, it's not as if the deal springs fully-formed from the CEO's forehead. He has to sit down and write a proposal that explains why his chips will be a money-maker for the OEM, why the price he's offering is a good deal, and so on. The criteria the OEM uses to evaluate the deal are different than the ones the NSF uses, but I don't see how one is more "bureaucratic" than the other.

How would you suggest we handle such attempts at persuasion in a "non-bureaucratic" way?


Your description of how "government is the customer that really matters" to a university doesn't fit my experience at all. At the typical university, student concerns and grants are handled through completely separate bureaucracies that rarely interact with each other in any way. Their greatest point of contact is through professors, which split their time working for both of the two sides. To the extent that the research side gets favored, it's not because of any of the factors you cited; it's because the typical university professor intended from the beginning to pursue a career in research, and he only does the teaching part of the job because he has to.

It doesn't really make any sense to say that the government customer is "more important" than the student customer because for the most part they're not really in competition. The one thing they do sort of compete for is professors' attention, but that particular resource is allocated primarily according to professors' preferences, rather than anything to do with funding.

Steve Sailer writes:

"I thought the original quote was odd because in corporations, most of the people *do not* do fundraising. Only a few specialised people do that."

Right. Corporations have more specialized roles. They tend to have a few supersalesman rainmakers and various kinds of worker bees who don't have to sell.

bryan willman writes:

keep in mind that many universities are state created and owned, and by their very legal structure and charter the "customer" and "owner" are branches of state government.
college students are rarely elected officials while attending...

Jacques Trulock writes:

Hi there i am kavin, its my first occasion to commenting anyplace, when i read this piece of writing i thought i could also create comment due to this brilliant post.

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