The soul and the ledger: How private universities will need to balance learning and market demands

This question, once debated in the hallowed halls of Western academia in the 80s-90s, has now entered India’s doorstep, especially amid the current rapid expansion of private universities in the country, and the global race for institutional prestige. The debate is often framed as a stark choice: should a university be led by a venerable academic, safeguarding its scholarly mission, or by a dynamic CEO, ensuring its financial viability and market relevance?

This dichotomy, however, is too simplistic and perhaps even a fallacy. The most resilient and impactful universities globally are not those that choose one over the other, but those that masterfully synthesise the two. They recognise that while a university must have a soul, it also needs a robust ledger.

The two poles of university governance

At one end of the spectrum lies the traditional, academic-led model, embodied by institutions like the University of Oxford or our own Jawaharlal Nehru University (JNU). Here, governance is the domain of distinguished scholars.

The institutional compass is oriented firmly towards academic freedom, intellectual rigour, and what has been termed the core social function of a university: “to develop knowledge, to curate and preserve knowledge, and to transmit that knowledge to society and to students.” This model is the bedrock of scholarly integrity, producing deep, foundational research and upholding the university’s sacred role as a society’s conscience and critic. Its inherent weakness, however, can be a ponderous decision-making process, a potential disconnect from market dynamics, and a vulnerability to financial instability in an increasingly competitive world.

At the opposite pole is the business-driven or CEO-led university. Institutions like Stanford and MIT, deeply enmeshed in their respective innovation economies, exemplify this approach. Leadership often draws from the corporate world, prioritising operational efficiency, strategic partnerships, and the commercialisation of research. This model excels in agility, resource mobilisation, and aligning educational offerings with industry demands. India’s own Indian School of Business (ISB) in Hyderabad is a testament to this model’s success in creating a market-responsive institution. The peril here is the potential for mission drift, what scholars have called “market managerialism,” where the pursuit of profit and rankings could subtly erode the core academic mission, transforming education from a public good into a mere commodity.

The delusion of a for-profit university

The business-led model inevitably raises a more contentious question: should a university operate for profit? The answer must be an unequivocal no. While financial sustainability is non-negotiable for any institution to thrive, the pursuit of profit as an end in itself is antithetical to the very essence of a university. The core mission of higher education is to serve society. As some have argued, business schools and by extension, universities, can best contribute by adopting a corporate purpose of “‘generating profitable solutions for the problems of people and planet, while not profiting from creating problems for either.’”

When profit becomes the primary metric, a dangerous calculus can emerge: courses with lower overheads may be favoured over vital but resource-intensive humanities; admissions policies might prioritise ability to pay over intellectual merit; and research may skew towards commercially viable projects at the expense of foundational science. The ledger, in this case, does not just support the soul; it risks consuming it. A university that loses sight of its core function, as one academic noted, is like a museum that moves “out of the business of preserving cultural works.” Society would cease to support it, and rightly so.

The search for balance

To navigate this complex terrain, we must move beyond simplistic binaries and ask more nuanced questions. The most successful institutions have already done so, crafting a collaborative governance model that marries academic wisdom with business acumen. Harvard University, for instance, has historically been led by a distinguished scholar as President, who works alongside a board of overseers populated by titans of industry and finance. This creates a powerful synergy: academic leaders protect the core mission, while business experts ensure the institution has the strategy and resources to achieve it.

In India, institutions like the IITs and Ashoka University are pioneering similar hybrid models. IIT Bombay, while fiercely protective of its academic-led senate, has increasingly embraced directors with business savvy and fostered a vibrant start-up culture. Ashoka University’s very foundation is a partnership between eminent academics and visionary philanthropists from the business world. This is the path forward: a model where business acumen serves the academic mission, not the other way around.

However, even this collaborative ideal is not without its challenges. To create a truly balanced narrative, we must confront three critical counter-questions.

First, in a collaborative model, who holds the ultimate veto? When a decision pits academic freedom against a lucrative commercial partnership, or when long-term research goals clash with short-term financial pressures, who makes the final call? The answer must be that the academic mission is paramount. The governance structure must have built-in firewalls—perhaps through a powerful academic senate or faculty council—that ensure the university’s fundamental values can never be overruled by purely commercial considerations.

Second, does the infusion of business thinking inevitably lead to the ‘corporatisation’ of academic culture? This is a legitimate concern. A focus on metrics, key performance indicators (KPIs), and return on investment can feel alien in a world driven by curiosity and intellectual exploration. The key is translation. Business leaders in a university setting must learn to translate their strategies into the language of academia, framing efficiency not as cost-cutting, but as freeing up resources for better research and teaching. Likewise, academics must appreciate that fiscal discipline is the bedrock upon which academic freedom is built.

Finally, can this balanced model be scaled effectively, especially in the context of public universities with constrained resources? It can, but requires a shift in mindset. Public universities can actively court accomplished alumni from the corporate world to serve on advisory boards, not just for fundraising, but for strategic guidance. They can create dedicated offices for technology transfer and industry liaison, run by professionals, which operate in service of the academic departments. It does not require a complete overhaul, but an intelligent integration of business expertise into the existing academic framework.

Ultimately, the university of the 21st century must be an ambidextrous organisation. It must be able to hold a research paper in one hand and a financial statement in the other, understanding that the strength of each depends on the health of the other. Our goal should not be to create universities that are run like businesses, but to build resilient academic institutions that are run with business-like competence. This is the delicate balance we must strike to ensure our universities not only survive, but thrive, serving as engines of both intellectual discovery and national progress.

Published – September 03, 2025 04:24 pm IST