The Business of College

Teaching in a small department in the College of Business (and Computer Science) has some interesting side effects. One is the interaction with other (business) faculty in the College, which you might not get in a larger university, or in a college of arts and sciences. Business is fascinating (for most of my life, I ran my own small business), but I never studied it formally.

One of the business faculty here told me about what he called "efficient markets". As I understand what he explained to me, an efficient market is where all of the players have equal access to all relevant information and can act on it. He did not further explain, but it's not hard to figure out that there's a moral dimension to this. Most Americans (myself included) consider it unethical to profit at another person's expense in an inefficient market. In fact, we send people like Martha Stewart to jail for violating that ethic.

This is not an abstract idea -- at least not for Martha Stewart and Ken Lay, but also not for me. I'm in a labor market: I buy and sell labor, some of it my own, but also when I have employees, their labor. When a buyer of my labor tells me that they will no longer be buying it, and bases their decision on information they choose not to disclose, they have created an inefficient market in which they are making their own profit decisions. If I subsequently attempt to sell my labor to another buyer while withholding critical information (such as that the previous employer fired me), then I am further compounding that inefficient market. Therefore the only Right and ethical action in situations of hiring and firing is to fully disclose all the facts. Employers rightfully fire people who give false or misleading information at the time of hiring.

For the previous employer to insist that a person "resigned" is in fact a lie wrapped in a half-truth: the half-true part is that the employee did in fact sign a document with the word "resign" on it; the other half is that it was after the fact and irrelevant to the termination of employment. The intent of such insistence is to deceive. Nobody is deceived, however, except perhaps those people who have something to hide. I called a state office and asked about the significance of a coerced "resignation". The official was frank. "We see those all the time," she said, explaining that she understood what really happened. Nobody is deceived. Prospective employers see them all the time also. One of them told me, "It's my responsibility to check it out." So maybe he calls up the previous employer and asks, "Just between you and me, off the record, what happened?" What are they going to do, lie to him? Perhaps on paper they might, but "off the record" in a telephone call, with full deniability (phone conversations are not admissable evidence in a lawsuit), they might say as much as I was told: "There were 'issues'." That's all it takes. Would you hire somebody, knowing that he did something bad enough to get himself fired from his previous job? Would you even consider consider hiring somebody who hid that fact from you? The only credible and non-defamatory thing the previous employer can say about the person they fired is to confess that it was wrongful termination, that they were at fault. Who would do that? That's grounds for a mondo lawsuit, and everybody knows it. So they say as little as possible. And when they are looking to hire somebody, and a previous employer says as little as possible, they know what it means.

Education is a business. The university is incorporated as a nonprofit, but they still must bring in as much revenue as they spend. The president never misses an opportunity to remind his faculty "We are a tuition-driven institution," by which he means that the faculty is responsible for crafting a curriculum that keeps the tuition-paying students coming. I cultivate a reputation as a tough teacher, because those are the faculty the students will look back on with satisfaction, and that is one of the reasons new students will choose this university over another. But it's not very pleasant when you're in the middle of it, and the mid-term student evaluations show it. However, nobody dropped out of college because I was tough. At least a couple changed majors, and perhaps had to stay an extra semester or two to make up lost credits. Hmmm, that actually improves the university's bottom line.

Education is a business. When a business has an employee who does not support the business, they get rid of him. If the business practices this undesirable employee is not supporting are in fact unlawful, then you cannot just fire him. Every one of us who has been in business very long knows about the process for getting rid of undesirable employees. First you make his job unpleasant; maybe he will leave on his own. This is of course morally reprehensible [Eph.6:9], so it must be done with caution. If that fails, you start to document every little misdeed and failure. Nobody is perfect, so there will always be something to document. Then present the charges in writing to the employee, as a "warning," and continue to document. Of course this doesn't work if the employee scrupulously refuses to continue the alleged and documented misdeeds. The joke goes that the way to get your boss fired is to do everything he says, exactly.

Each employee is his own little business, in a micro-economic way. He sells his labor, often to the highest bidder, and he buys goods and services (think: food, clothing, and education) as necessary to make his product more marketable. One of the ways I market my labor is with the assurance that it is always with the highest standards of ethics, as taught in the Bible. Subject only to the constraints of God's Law and the law of the land, I wholeheartedly serve my employer's agenda, whatever that is, to the best of my understanding and ability. I tell my students to do the same. If they both do so, and also let their future employer see that as their agenda, they will have no trouble getting and holding a job. It's exactly the same marketing technique as that hamburger chain telling their customers, "Have it your way." A few decades ago the way to say the same thing was, "The customer is always right."

Where this fails is when there are conflicting agendas. If your employer is doing unlawful or immoral things, then you cannot in good conscience continue to work there. If you take the moral high ground and "blow the whistle," you will get fired. The employer could recapture the moral high ground by repenting and doing things right, but that never happens, not even in "Christ-centered" businesses. The same thing also happens in a smaller scale when a lower-level manager has a different personal agenda from his employer. This is where the joke is actually the right way to deal with the problem. If you follow your immediate supervisor's agenda (still within the constraints of good ethics and the law), then you might still get fired, but it would be rather petty of them to do it, and you really don't want to work for that kind of capricious boss anyway.

It is often said that the Golden Rule of Business is "Those who have the gold make the rules." Everybody in business likes the rush of telling other people to do something and having them do it. Jesus told his disciples not to do that, but the temptation is too great. An academic institution tends to attract the opposite personality type -- indeed the very name "collegiality" implies shared authority -- but Original Sin, the desire to "be as gods" infects every one of us. Employees who hew to an absolute moral standard will say "No" when told to do some things. That is a blow not only to the authority of the employer, but also to his ego. Those employees (along with whistle-blowers, who are the same thing) must go. Universities operate the same way. They are first and foremost a business; there is no place here for collegiality, nor for employees who care about Right and Wrong.

In a "College" of Business you tend to notice these things.

As I said, business is fascinating.

Revised, 2004 May 20

In keeping with the principles taught by Jesus, I showed a draft of this essay to the university administrators whose actions it refers. They offered comments, all of which have been incorporated.