7.a more


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

7.a more

  1. 1. The current issue and full text archive of this journal is available at www.emeraldinsight.com/0888-045X.htmBL RETURNS AND INVESTMENTS24,2 A more robust view of the revenue stream: are students a118 tool for corporate finance?Accepted May 2011 Terry Cottrell University of St Francis, Joliet, Illinois, USA Abstract Purpose – The purpose of this paper is to explore the viewpoint that college students serve the same function as customers purchasing products from corporations. Design/methodology/approach – This paper gives comparisons and differences between the process of students learning through higher education and the process of customers buying a consumer good. Findings – This paper recommends that while similarities exist between students and consumers, a more robust view should be maintained and communicated as a means of preserving the true nature of the academic enterprise above and beyond simple consumer activity. Originality/value – This paper presents a clear acknowledgment that while all students consume knowledge, they are also all held to the expectation to return new knowledge. This reciprocity is not part of the ordinary consumer interchange. Keywords Customers, Students, Colleges, Libraries, Finance, Product Paper type Viewpoint Students at enrollment-driven institutions are not only the fuel for growth, but also survival. There is no large endowment on which institutions such as these can rely during registration or fundraising shortfalls. Student enrollment must always remain a priority until an endowment suitable to maintain existing operations can be built from years of tuition dollar savings. Many major corporations carry large sums of cash, in a manner similar to university endowments, as a means to mediate times between failed product launches and major strategic changes. Even large companies like Microsoft have utilized large cash reserves to restructure during revenue shortfall periods. After years of winning the consumer software wars with their popular Windows and Office products, Microsoft all of a sudden found itself in need of new strategic direction in the wake of Apple’s rise to rise to dominance (Tweeny, 2010). Company cash reserves ultimately allow for the reinvention of corporate missions that lead to new products that can preserve solvency in the marketplace and relevancy to customers. Managers in the library world are keen to keep their eye on developments in the corporate world, like the Microsoft/Apply dynamic, because this is place where coreThe Bottom Line: Managing Library financial lessons can be found. Younger and younger students are entering universityFinances halls and libraries with a differing set of expectations that drive services and collectionVol. 24 No. 2, 2011pp. 118-121 offerings. These expectations are partially driven by consumer experiences andq Emerald Group Publishing Limited0888-045X influence a new viewpoint that must be engaged. The expectations of paying students,DOI 10.1108/08880451111169160 and the perspectives of librarians and other university employees collecting fees and
  2. 2. tuition, can sometimes appear much less complex than simple financial statements or Robust view ofbusiness model correlation analyses may show. The question is: how truly similar are the revenueuniversities, their students and their service offerings to corporate products andcustomers making purchases? streamA closer look at customers and studentsWhen a company like Microsoft loses ground to a competitor, it pulls cash from 119reserves to develop new products to meet consumer needs and increase sales.Managers of libraries everywhere, and especially at enrollment-driven schools, canlook at this financial strategy and find similarities in scope along with significantdifferences. Libraries are subjected to their funding sources as much as corporationsare reliant on customer wallets. There are, however, no customers at universitiesdirectly funding research and development in a one-to-one exchange. Consumers findproducts they think they will enjoy – either through leisure pursuits or productivity –and give funds for acquisition. A company uses revenue from the sale of its products todevelop new tools for future monetary exchanges with the returning clients while atthe same time trying to garner attention from new customers. Libraries are more complex in the sense that there appears to be a one-to-onecustomer exchange, but at universities there is truly no singular product beingdeveloped for consumption. The viewpoint between producer and consumer here is notlinear. It is in the product development process and delivery where corporations beginto differ greatly with institutions of higher education and their libraries. In libraries,and university classes, students search for the information they need out of a desire toexcel in courses bearing a minimum set of requirements. Students’ approach to libraryand university offerings is significantly different than their approach to consumerproducts, because students’ primary source of motivation with collegiate studies isfound in a mixture of inquisitiveness and forced compliance with assignment demands.Seeking pleasure or greater efficiencies are not primary views for students in librariesas with consumer goods. How can libraries use the framework of corporate interactionwith their customers juxtaposed against students interacting with universitydepartments and libraries to show a more robust method of valuing students apartfrom mere revenue sources? The answer is found in encouraging a perspective andpoint-of-view the embraces the fact that students do consume the product of librariesand scholarship, but they also contribute something back to the organization fromwhich the purchase has been made.Strategic maneuvers: librarian views vs administrative focusMany collegiate administrators find the idea of equating university operations withthose of corporations to be very appealing (Kenney and Khanfar, 2009). Education cansometimes be seen a commodity like corn or wheat. Students can therefore be prized astools for revenue generation and funding sources before the recognition of their valueas change agents and creators of the future of knowledge is considered. Libraries andlibrarians are generally opposed to this profit-centered idea. It is true that, as payingcustomers, students at institutions of higher learning drive the development of newproducts and services. Increased headcount for an enrollment-driven institution meansa new major may be born, or a new simulation lab may be created. It is also true thatnot focusing on student needs through survey responses (now currently seen on every
  3. 3. BL retail restaurant chain receipt), or other tricks of the trade in use the traditional24,2 commercial world, can be disastrous for enrollment goals and accreditation reviews. College and universities want feedback from their students as much as for-profit corporations want feedback from their customers. Imagine, however, if every library checkout receipt had a survey offer printed on the back. Imagine if every phone call to the library ended with the phrase, “Thank you for calling. Would you be willing to120 answer a quick survey about our services today?” These ideas may initially seem like good ways to adopt corporate customer policy and implementation within the library and other areas of the academy. The issue at hand is not to disparage these ideas completely, but to challenge library and other collegiate administrators to acknowledge the debate, and then strategize accordingly. For some institutions, these ideas work with their culture. For many, however, they are simply too close to the sterile and disingenuous corporate customer relations methods often disparaged and ignored by everyday consumers. Library managers must find which viewpoint fits with their own institutional culture, and decide to work from the inside for support or change. In the classic text The Art of War, by Sun Tzu, it is advised that negotiation is both an offensive and defensive enterprise. Librarians are generally best kept in accordance with the ending of this ancient writing on strategy – the acquisition of intelligence (Tzu, 1910). Although library managers may feel negatively about the idea of viewing students solely as tools for revenue, it is important to realize the middle ground and to explain the entire situation of higher education to all parties involved in debating this viewpoint. A consumer view of students is truly an overly simplistic way to streamline the learning process, and the products created from displays of education. Students are essentially both the creators of and contributors to their respective fields of new knowledge while at the same time being the revenue steering growth and university development. The key to a student’s long term satisfaction with their degree-granting institution, and the instilling of good memories of services performed by groups like libraries, writing centers, tutoring centers, and IT support, is the viewpoint and communication of former. This will eventually lead to the financial success seen in the ladder. Helping others see the wisdom of this viewpoint takes time to develop, and careful execution to permeate throughout an organization. Longer-term vision leading to shared expectations Is it best that to tell students that they are the customer? Must they be told that since they pay for a service, they are always entitled to a very specific and easily-anticipated result? Is this a good lesson to teach students? Institutions of higher learning cannot expect to clearly transmit the same message that a company like Microsoft sends when it tells customers that if they do not like the company’s products they may return them for a refund. Librarians, faculty, and educators form a relationship that is much larger than the revenue stream born from tuition dollars. The entire academic enterprise must be acknowledged during the “sale” to the customer in addition to the degree they obtain at what appears to be the end studies. Universities are unique in that they provide services, but also expect contributions in return (Burns, 2009). The familiar customer satisfaction survey on the back of a retail receipt, as it were, is established a priori when students research, write, codify and demonstrate how the academy’s teaching and learning resources enable them to create new understandings and
  4. 4. viewpoints of their own. Companies like Microsoft and Apple sell products, and expect Robust view ofnothing in return from their customers besides dollars leading to the development ofnew products the companies hope will command return dollars at a later date. This is the revenuethe corporate view of the product and revenue lifecycle. Universities charge tuition streamwhile also giving students a charge to develop themselves over time through practiceand demonstration. This more robust viewpoint denotes a much more refinedrelationship than any corporate financial figures can show at the end of a fiscal year. 121This viewpoint also shows each student’s field of study, professors, libraries, and almamater as a whole, as inviting them to an intimate cooperation extending throughout alifetime. There is no benefit to students, or their degree-granting institutions, inreducing this richness of perspective. Doing so changes the core mission of academiaentirely, and does a disservice to future students who will reap both the benefits ofknowledge shared in addition to tuition paid.ReferencesBurns, G. (2009), “The customer’s not always right at every B-school”, Chicago Tribune, December 17, available at: www.chicagotribune.comKenney, M.G. and Khanfar, N.M. (2009), “Antecedents of repurchase intention: propositions towards using marketing strategy to mitigate the attrition of online students”, Services Marketing Quarterly, Vol. 30 No. 3, pp. 270-86.Tweeny, D. (2010), “Apple passes Microsoft as world’s largest tech company”, available at: www. wired.com/epicenter/2010/05/apple-passes-microsoft/Tzu, S. (1910), The Art of War, translated by Lionel Giles, available at: www.gutenberg.org/files/ 17405/17405-h/17405-h.htmCorresponding authorTerry Cottrell can be contacted at: tcottrell@stfrancis.eduTo purchase reprints of this article please e-mail: reprints@emeraldinsight.comOr visit our web site for further details: www.emeraldinsight.com/reprints