Dr. Raynor teaches finance at the State University of New York at Delhi, and is periodically a visiting professor at Universidad Catholica Santo Toribio De Mogrovejo in Peru. He has worked on a number of projects in other areas of Latin America, and was also a visiting professor in China. He is especially interested in international trade and labor issues, and has previous private sector experience in the banking industry.

Recently, much has been written about higher education, but little attention has been given to Institutional Research (IR) as a factor influencing quality and costs. IR is important to both private and public institutions, but often not well understood by those outside of academia.

Ideally, the function of IR Departments at academic institutions is to provide administrators with the data they need to make more informed decisions. This critical area is necessary to keep the institution on track with its purpose and mission statement. IR is not the type of research that professors do in their field of expertise. Nor is it the type of research universities do with grant money they receive. When colleges or universities conduct IR, it is their own internal research, done to support decision making processes consistent with their operating purpose. IR helps institutions engage in a self-study process so they are better able to identify their strengths and weaknesses.

Professor Joseph Saupe (University of Missouri and past President of the Association for Institutional Research) provides a more comprehensive definition of IR: "Institutional research, then, is an essential ingredient of sound college or university governance. It should occur throughout the institution wherever any sort of planning occurs, any type of policy issue is considered and any decision about some aspect of the institution is proposed. Institutional research has been described as an attitude of commitment to the institution's purpose in society and to the value of critical appraisal and careful investigation. Institutional governance is informed and rational to the degree that such an attitude pervades the institution." (Saupe, 1990).

Without an effective IR program, academic institutions can waste large amounts of money and time on unnecessary facilities, questionable programs, etc. Often, they have little value and do nothing to enhance student learning; in some cases, they may actually hinder it. The direct costs associated with these poor decisions are often passed on to students, their parents, and taxpayers via higher tuition bills. The indirect costs--learning opportunities not optimized--are borne by the student and the rest of us concerned about our ability to compete in a global economy.

Typically IR is an important part of the regional accreditation process that colleges and universities periodically go through. However, an institution can have an IR program that meets minimal accreditation expectations, but falls short of functioning well. Historically, regional accreditors were part of the problem, but are currently engaged in a reformation process: "Regional accreditors used to limit their examinations to colleges' financial solvency and educational resources, with the result that well-established schools enjoyed rubber-stamp approval. But now they are increasingly holding colleges, prestigious or not, responsible for undergraduates' grasp of such skills as writing and critical thinking." (Golden, 2006). It will take time however, for enhanced IR processes to seep into the bedrock of many institutional cultures.

What happens if a college's IR function only appears well-structured on the surface, but is not providing services necessary to optimize institutional effectiveness and student learning?

Potential IR problem areas include:

Risk of insignificance - If IR does not report to top management, or is not given sufficient importance, the process may be sidestepped or not taken seriously.

Risk of uncoordinated activities - IR may not be coordinated with other departmental areas on campus. This could lead to either inadequate coverage or redundant research.

Risk of being reactive (vs. proactive) - IR may not be aggressive about pursuing needed areas of investigation, and only passively responding when requested for research assistance. IR may only be used for required or mandated reporting areas, and not utilized to optimize other investigative areas in the institution's best interest.

Ineffective Institutional Research: An Example

College XYZ is a fictitious institution enjoying a long track record of success. They have limited resources however, and are now feeling intense competitive pressures. As a result, XYZ believes it is necessary to significantly enhance campus facilities to attract future students. They too have noticed that "The bidding war also extends to students, with colleges erecting plush dorms, state-of-the-art health clubs, gourmet restaurants and other amenities, all designed to lure the brightest and most talented students, who desire creature comforts as well as a challenging education." (Huffman, 2007).

XYZ's "gut" analysis may be correct--that some type of change is necessary to enhance future competitiveness. In fact, they are so sure of this that they short-circuit the IR process to save time and money. Furthermore, because XYZ never really had to do meaningful IR before, they do not have a comprehensive IR system in place that functions well. Consequently, XYZ makes two important decisions, with minimal IR engagement:

1. invest in upgrades to make the campus more physically appealing (like many other colleges are doing).

2. to help cover these expenditures and generate new revenue, XYZ decides to use existing faculty to expand their share of the adult / distance education market via on-line courses.

Both decisions seem like "givens" with no need for IR, and College XYZ now feels it is better positioned in higher education. But its lack of data, IR, and planning has cost it deeply. As time goes by college officials realize that their operating environment has intensified. "As a result, colleges spend more money making their institutions attractive, and charge more to attend them Normally, competition drives prices down but apparently not in academe." (Huffman, 2007). College XYZ's problems continue to mount beyond this however because:

1. the money spent on campus upgrades was used for frills and aesthetics, not on assets that actually improve learning. Furthermore, XYZ discovered that only a few of their students on campus fully utilize the upgrades, and none of the distance or on-line students do.

2. faculty and staff resources are stretched too thin because much of their time is spent on helping XYZ compete in the adult or distance education market. As a result, contact time and student engagement on campus has diminished.

By not having an effective IR program, management at XYZ made decisions that harmed the institution. Valuable monetary and time resources that made them successful in the first place have been squandered. They have more expensive facilities to pay for and maintain. Tuition dollars from students on campus are now being used to subsidize XYZ's money-making efforts in the distance education market. College XYZ is operating outside of their mission statement and societal purpose, disregarding where their core strengths are. They have lost even more time in their efforts to enhance competitiveness because of their decision to "shoot-from-the hip." Instead of making sound decisions for positive change based on solid IR practices and supporting data, they have set the institution back.

It would not be fair to say that College XYZ stopped thinking like an academic institution, and more like a commercial institution. It is much worse than that. College XYZ is operating like a poorly managed business enterprise that can go on continuously with little regard for product quality, price, market conditions, availability of future customers, etc. Does any of this sound familiar?

Where have we seen this before?

There are a number of similarities between academic institutions that do not have effective IR practices and the path that Detroit's "Big Three"--General Motors, Ford, and Chrysler--took 25 years ago. Consider the following:

1. Over-priced products or products of questionable value: For a long time, the Big-Three sold many vehicles of questionable value. They often emphasized unneeded options and extra "bells and whistles." Where is the value for XYZ students when so much of their tuition dollars are diverted to non-academic expenditures? Do XYZ students want to pay back student loans over many years for attending college, or a country club?

2. Disregarding customer needs by emphasizing short-term gains instead of long-term sustainability. For many years, the Big Three emphasized short-term return-on-investment (ROI) and quarterly dividends at the expense of their customers and a longer-term vision. Ironically, students on campus at XYZ are paying more money to help the institution make more money in the adult or distance education area. When XYZ faculty are distracted by spending time to expand this market, are the needs of students on campus being met? Will XYZ be able to maintain their established reputation and role in higher education?

3. Bypassing / ignoring research: the Big Three did not do their homework to determine what types of cars people really needed. Often, they only made cosmetic adjustments, while avoiding substantive product change, such as improving vehicle quality and enhancing fuel efficiency. Are higher education institutions really doing their homework via IR when so much money is spent on aesthetics instead of things that actually improve learning? Is this the type of education students really need?

4. Over compensated bureaucracies: Remember excessive CEO pay and the book, On A Clear Day, You Can See General Motors, by John DeLorean? Is academia heading in the same direction? "In its annual survey, the Chronicle of Higher Education found that 112 chiefs pulled down at least $500,000...up from 73 last year." (Sahadi, 2006).

5. Excuses and disdain of outside critics: For a long time, the Big Three claimed that aggressively improving fuel standards was unrealistic. Those external to the auto industry just "didn't get it" when it came to building cars. In academia: "A revolt is brewing among college presidents against the influential college rankings put out each year by U.S. News and World Report...At the heart of the matter: A college degree is increasingly expensive, and students and parents want to make informed decisions. But educators worry that the rankings have made college a commodity, creating a false impression that schools can be easily compared..." (Arnoldy, 2007).

Conclusion

It is not the intention of IR to throw cold water on initiatives or stifle development in new areas. In fact, academic institutions have an obligation to look at new opportunities for growth and to enhance their contributions in higher education. New ideas, markets, programs, etc. should and need to be explored via the IR process. If they are not, IR is not being fully utilized to optimize investigative areas in the institution's best interest.

Too often however, IR is not taken seriously enough, which is also unethical, given what is at stake--our future position in the global economy. If reform efforts lead to more attention given to IR, a big step in the right direction will have taken place. This is being addressed by academic institutions and their accreditors, but not fast enough. "Perhaps at some point, universities full of great economists, ethicists, and business school efficiency experts will figure out how to lower their prices. But so far, our finest institutions, including several with multibillion-dollar endowments, say they don't know the answer." (Hong, 2007).

There is reason for optimism however, and there are encouraging transformation efforts taking place: "This month, the US Department of Education is working with accrediting agencies to design new rules, pushing colleges to produce evidence that they're making progress with students and to require accreditors to compare the results with similar schools. Now, many accrediting agencies ask colleges to show how they're measuring students, but not all demand actual data. By Nov. 1, new rules have to be approved, and by July 2008, accrediting agencies must begin implementing the changes." (Wertheimer, 2007). In the interim, more attention and public awareness of IR's importance will encourage greater academic reform. This may also help higher education avoid the rough and difficult road taken by the U.S. auto industry.

Notes and References

Arnoldy, Ben. "Deriding the ratings system as a "beauty contest," dozens of schools have refused to fill out surveys from newsweekly." The Christian Science Monitor. (April 12, 2007).
http://www.csmonitor.com/2007/0412/p01s02-legn.html

Golden, Daniel. "Colleges Seek Better Ways To Measure Learning" (November 13, 2006). The Post-Gazette (a service of the Pittsburgh Post-Gazette),
http://www.post-gazette.com/pg/06317/738027-298.stm

Hong, Peter. "The Fabulous $50,000-A-Year-Education". (February 18, 2007) The Los Angeles Times (LATimes.com).
http://www.latimes.com/news/opinion/Sunday/commentary/la-op-hong18feb18,0,173963.story?coll=la-Sunday-commentary

Huffman, Mark. "Why Does College Cost So Much? A Half Century of Tuition Inflation Adds Up. (February, 12, 2007). Consumer Affairs.com.
http://www.consumeraffairs.com/news04/2007/02/college_costs.html

Sahadi, Jeanne. "Highest Paid College Presidents". CNNMoney.com (November, 20, 2006).
http://money.cnn.com/2006/11/20/pf/college/college_president_pay/index.htm?postversion=2006112009

Saupe, Joe. "The Functions of Institutional Research". (1990). The Association For Institutional Research. Page 6.
http://www.airweb.org/p.asp?page=85

Wertheimer, Linda K. "Testing Harvard: The federal government wants to start tracking how well the nation's colleges teach. This could spur some of the biggest changes campuses have seen in decades--and perhaps threaten the very idea of a liberal education." (April 22, 2007). The Boston Globe (Boston.com).
http://www.boston.com/news/education/k_12/articles/2007/04/22/testing_harvard/

Dr. Raynor is a finance professor at the State University of New York at Delhi and a 2007-08 member of the Association for Institutional Research