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Differences Between Non-Profit Public Universities and Colleges and Business Corporations

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Differences Between Non-Profit Public Universities and Colleges and Business Corporations

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Differences Between Non-Profit Public Universities and Colleges and Business

Corporations

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Differences Between Non-Profit Public Universities and Colleges and Business

Corporations

Background

In any society, public universities and business corporations are among the major

institutions that promote economic development and sustainability. In the United States,

universities, and colleges support over 450 000 jobs over the year through expenditures on

tuition fees, dining, retail, accommodation, and transportation (Arthur, 2017). In addition to

supporting employment, public universities play a vital role in enhancing lives through their

research in typically every conceivable industry. Every year, public universities conduct $44

billion of research driving global progress by disseminating and discovering new knowledge

(Arthur, 2017). Some of the significant discoveries from public universities in the United States

include Lithium-Ion batteries and touch screens used in laptops, electric vehicles, smartphones,

and various antibiotics to treat diseases such as tuberculosis (Shattock, 2020). On the other hand,

business corporations are the lifeblood of the American economy. Over a year, business

corporations in the US create 75% of new jobs and enhance competitiveness and innovation

(Beard & Dess, 2017). Despite having almost a similar organizational structure, public

universities and colleges differ from business corporations in numerous ways. In Birnbaum’s

book How Colleges Work (1988), he states: “Although it is tempting to consider a college or

university, in view of its corporate existence, as being comparable in many ways to a business

corporation, the differences between the two are striking.” (p. 28). This paper will discuss five

ways universities differ from business corporations, including decision making, organizational

structure, regulation, operations management, and leadership style.

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Decision making

Non-profit public colleges and universities' process of decisions making is more

complicated compared to a business organization. Decision-making is making choices among

numerous alternative courses of action (Beard & Dess, 2017). Nearly all public sector

organizations, whether the national government, local authorities, or other institutions such as

universities and colleges, make decisions daily. Conventionally, such public bodies make

decisions based on their specific statutory functions, which may have a considerable implication

on a sector of the industry, community or group, or the public (Birnabaum, 1988). The common

theme for public universities and colleges, among other public bodies in the United States, is that

they must comply with the law (Dearlove, 2018). Thus, decisions made by public universities

and colleges in many cases can be challenged through internal appeal processes set by the

organizations or the statute. In case the internal appeal process within a public college or

university is exhausted, the complainer's ultimate recourse may be to bring the matter before a

court of law leasing into a petition for judicial review, which invites the court of a session for

supervisory jurisdiction ( Yielder & Codling, 2019) . To eliminate or minimize the risk of a

successful judicial review challenge being brought regarding a public university or college,

distinct decision-making processes should be adhered to and every aspect considered by the

decision-makers. For instance, in the United States, public universities and colleges must consult

before deciding (Dearlove, 2018). If the specified consultation exercise procedure is not adhered

to, the organization's decisions may be overturned by the law court. Since the law governing

universities does not provide for consultation with the affected parties within the institution, the

affected parties' views and perceptions on issues affecting are ignored. Carroll, (2019) argues

Table of contents

  1. 01 Differences Between Non-Profit Public Universities and Colleges and Business Corporations 1
    1. Background 2
  2. 02 Decision making 3
    1. Non-profit Public Universities and Colleges Decision-Making Process 3
    2. Business Corporations Decision-Making Process 4
    3. Parties Involved in Decision Making 4
  3. 03 Organizational Structure 5
    1. Structural Frame 5
    2. Political Frame 6
    3. Governing Board and Political Appointments 6
    4. Conflicts in Public Universities 7
    5. Human Resource Frame 8
    6. Traditional Administration in Public Universities 8
    7. Employee Engagement in Business Corporations 9
    8. Symbolic Frame 10
    9. Organizational Culture and Values 10
    10. Culture in Public Universities 11
    11. Corporate Culture in Business Organizations 12
  4. 04 Operations management style 13
    1. Board of Directors and Management Roles 13
    2. Flexibility and Adaptability 13
  5. 05 Form of Leadership 14
    1. Leadership vs Management in Public Universities 14
    2. Leadership in Business Corporations 14
  6. 06 Regulation 15
    1. Regulation of Public Universities and Colleges 15
    2. Federal, State, and Constitutional Laws 15
    3. Regulatory Bodies and Accreditation 16
    4. Regulation of Business Corporations 16
  7. 07 Conclusion 17
    1. Key Differences Summary 17
    2. Organizational Structure and Management Hierarchy 17
  8. 08 References 19

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May 11, 2026
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