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Part - VII
Shall the Government sponsor or order organizations to supply the goods and services at similar ratio to the income levels? Or in another fashion, should not the total of salary and perquisites and other non-cash benefits (such as free travel, free telephone etc.,) be restricted to the Indian per capita income level for all Members of the Parliament and Legislatures?
Self Regulation
In USA, post-secondary education is organized in this way: -
The States give charter to a University to be set up, usually through the Higher Education Commission in each State, which is in form of a License.
Thereafter, the sponsors of the University (or a College or an Institute as the case may be) goes about the business of setting up the institute.
In this period, but before the first degree is granted, the College (or the University) must seek accreditation from the Regional Association of Schools and Colleges. This is a self-regulatory body of which the college is a member.
There are several such Associations for different regions such North East, Southern, Central, Midwestern, Western etc.
These regional associations themselves are part of a central apex body known as COPA, the Council for Post-Secondary Accreditation.
While the State License authorizes a University to grant a degree, no degree can be granted unless the self-regulatory accreditation is completed.
The course design, curriculum, name of degree to be granted, numbers of hours for teaching, salary scales, how many faculty members are employed, the organization structure of the university, the tuition fee, how many students are to be admitted, who are refused admission, the admission process itself etc., are totally left to the College, Institute or the University itself, and the State has no role to play at all!
If we are learning form others, why not learn this as well!
Economic and Managerial Issues
The tuition fee is the main source of revenue for an educational institution. This must be set keeping in view the following paramount requirements: -
All organizations must be self-sufficient.
Organizations depending on subsidy or continuous deficit financing cannot survive (an example is the National Textile Corporation), or at best survive in condition of minimum needed resources for survival.
For educational organizations, especially for those in the field of Professional and Vocational education, the product is the perceived and real value addition as judged by a potential user of that added value, which is the professional, technical and/or scientific competence.
The pricing of this product is decided by the perceived levels of value addition, as evidenced by the quantum of starting salary offered by the user for this product.
The degree or the qualification itself is not the product. That is the reason all degrees are not equal.
Different institutions create different value addition, and hence are valued differently.
Value addition depends on quality of teachers, abundance of latest and relevant technical and academic infrastructure, work culture in the institution, etc.,
As the scope and availability of these inputs varies greatly, so does the cost of providing the service.
Perhaps this is the single most important reason that the best institutions in any country are the most expensive.
Dependence on financial support eventually takes away the right to manage, since the people who control the money seek to control the activity of the institution as well.
If the deserving students cannot afford the fee in the institute to which they are admitted on the basis of merit, and is not able to get a loan, then other mechanisms must come into play, such as Government supported student loans, merit scholarships etc, in which the money spent by the government goes directly to support the student, and not a bureaucracy.
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* Contributed by: -
Prof. P. V. Ramana; BE (Hons) Elec. Engg. from Andhra University, Waltair, India; MBA (Accounting & Finance) from Washington State University, USA; Prof. Engr. (Thermal Power), USA (equiv. to a Doctoral qualification); Receiver of Life Time Achievement award in 2003 for service to Management Education given by World HRD Congress, Boston, USA; Dr. P. N. Singh Foundation has instituted the "Prof. P. V. Ramana" for Corporate Governance; he has also founded ITM in 1991.
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