Research Forum 2003

Jared L. Bleak
Harvard University Graduate School of Education

The Governance of For-profit Subsidiaries of Nonprofit Universities: A Question of Integration or Insulation

The creation of for-profit subsidiaries by nonprofit universities to deliver online education has caused controversy, with some claiming that the traditional academy is being irreparably altered as shared governance is replaced by a corporate style of management. Using culture as a theoretical lens, this study examined how these subsidiaries were governed in relation to their nonprofit parents. These subsidiaries were governance hybrids, revealing characteristics of both academic and corporate governance. However, the governance and operation of these companies also illustrated the power of academic culture. In essence, culture mediated governance. The greater the disparity in culture between the parent and the subsidiary, the more separate and distinct was governance. Where cultural incongruity was most pronounced, the subsidiary was insulated from the parent institution, and especially its faculty. This was meant to lessen the danger of contagion or cultural contamination between the two institutions. Conversely, where cultures aligned, the subsidiary was integrated with the parent institution.