Saturday, January 15, 2011

Higher Education: Product versus Function

I must admit, my class today was quite interesting. I enjoyed the lecture. More important, I appreciated the discussion on a particular topic: products. For a few years, I have tried to wrap my mind around developing an argument position against the current structure of higher education. This argument is not intended to discredit the existing structure. Instead, I would like to recommend an alternative solution for institutions pursuing better standards in the midst of a sharp reduction of resources – primarily funding. It would be incorrect for me to recommend any organizational suggestions to successful colleges and universities. However, there are several institutions that have either been unsuccessful or ineffective when it comes to improving standards and performance. I believe many of these organizations have some major issues applying their perception of their product with the mission.

Walker and Lorsch (1968) provided a structural analysis of how companies can best achieve efficiency, responsiveness, and the other operational attributes associated with long-term survival. The book, Organizational Choice: Product vs. Function, analyzed organizational structures that were contingent on the institution’s perception of environmental stability or strategy related to the final product. For some organizations, it was better to structure their operation to carry out a specific function, such as delivering mail or offering vaccinations. These systems could function at a high level of efficiency, but only in stable environments, with more constants than variables in the operational equations. Burns and Stalker (1961) influenced this writing by highlighting the differences between, Mechanistic and Organic Systems, focusing on the contingent nature of organizational structure and strategy. The flipside of the coin for Walker and Lorsch’s work is the product-focused organization.

Some organizations are designed to operate with the final product in mind. The two choices may appear to be the same, so let’s look at it a different way. Let’s take a generic company that produces MP3 players. This company would have a team of product developers, engineers, software developers, and other related professionals. The output of the company would be a variety of MP3 players to sell in the marketplace. A company focused on function would organize the operation by like functions – engineering division, software division, etc. All these units would function within their own individual vertical unit. Product-focused structures would organize the operation by product type – sports solutions, home/office, etc. The difference between the two has to do with a term the authors coined, “differentiation and integration”. Sparing you all the details, product-focused structures offer more flexibility to changing environments. Based on this information, I believe many higher education institutions could benefit from a structure that valued product more than function, especially community colleges.

Community colleges are designed to offer responsive and efficient modes of higher education. Although many perceive the value of the currency of community colleges to be inferior to universities, the attempt to compare the two would be similar to comparing net-books to laptops; the price point and functionality are uniquely positioned in the value-chain. Back to the point, many community colleges are structured to mirror larger universities. In spite of their different missions and audiences, community colleges perceive their primary output in society to center on higher education. A closer look at the two can easily present variances in output products. Universities produce three primary products (degrees) geared toward employment. Community colleges have many more products, with some geared toward employment, and others designed to retain employment. Additionally, community colleges have products that integrate with the university product structure. The final product can either be purchased (admitted) by another manufacturer (university) for further development on a more complex product (bachelors degree) to gain a higher price (wage) in the marketplace. The final product can also be sold (hired) direct in the workforce. Or, the final product can be retooled (workforce training, continuing education, etc.) to function better at an organization. In any case, community college products are more complex, due to the many variables. However, these lean organizations often operate by lumping the product development function in one vertical unit, and creating other similar units based on certain functions. Yet, only one division creates any relevant output to support the needs of the entire organization: academics. Not to mention, the ability to make sudden product/service changes can be very difficult, based on the writings of Walker and Lorsch.

I recommend a product focus for community colleges that captures the essence of their final outputs. The diagram below follows more of a matrix structure, which is mentioned in the work of Walker and Lorsch. The solution, in my opinion, establishes efficiencies for many of the support functions, while giving attention to the full development of certain outputs. Most community colleges create products (A.A., certificates, etc.) based on limitations or compliance issues. If the organization was divided by product type, the approach to certain opportunities would (1) develop a more strategic purpose, (2) be more responsive to the emerging need, and (3) quickly educate the support areas necessary for successful outcomes.

I believe this is an excellent opportunity for certain organizations to realize substantial efficiencies to redeploy resources in areas in most need. Please give me your thoughts on this approach. If you know of a higher education example that is based on a product-focused design, please send me the information to insert in future discussions.

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