Stockholder/stakeholder models to improve decision-making in universities

ABSTRACT

Business schools teach stockholder and stakeholder perspectives for ethical decision-making, but what are the implications of those perspectives for the management of business schools themselves? From the stockholder perspective, faculty are agents in an organization financed by two types of principals—private donors and governments—with goals based on education’s social and economic benefits. The essay addresses the stockholder perspective’s issues of open and free competition, deception and fraud, and the role of required or desirable objectives. Some business school competition is open and free yet some is not. Deception and fraud do not appear significant. Objectives not specified by the principal may be required or desirable in pursuing educational objectives. Next, the stakeholder perspective suggests further parallels between business and academia. Three market failures—externalities, moral hazards, and monopoly power—are readily found in academia. Decisions do not incorporate all costs, there are numerous moral hazards, and monopoly power may arise.

Book version of article in dominant design / technology commercialization / innovation literature which made an early distinction between direct and indirect network externalities, and how network externalities influence strategic choice.

Re-orienting competitive strategy with a “double-diamond” model of strategy (competences, customers, competitors + environment) + change (goals/policies, culture, leadership + structure/systems).

The ability to define and guide the activities which turn the inputs to a business into outputs is the essence of management.  At one extreme, these activities are manageable on a day-to-day basis, with managers responding to problems and minor changes in operating conditions; this is operations management.  At the other extreme are management decisions that will launch the firm on a trajectory that is expected to continue for a number of years. The long-term character of these decisions is what makes them ‘strategic’. The notion of a firm’s distinctive or core competence (Prahalad & Hamel, 1990) is used here as the anchor to develop an analytical framework–the strategic “double diamond”–that can provide a useful structure for considering fundamental strategic issues about competition.