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> EDUCATION PRACTICE AND INNOVATION <

Management and Organizational Characteristics of Educational

Institutions
Gabriella Keczer, keczer@jgypk.u-szeged.hu, Duna 6. Szeged, Hungary

Abstract— Schools, universities and other institutions of education and training are different from manufacturing organizations
in two senses. They are providing services, and their core activity is educating. Their peculiarities deriving from these two
characteristics determine they way of management and organizational structure. First the special aspects that should be taken into
consideration when structuring and managing an educational organization are discussed in this paper, then we turn our attention
to higher education institutions. Their management and organizational characteristics are analyzed in the frame of Mintzberg’s
model.
Keywords: educational organizations, leadership, management, professional services, universities, structuring organizations

company’s performance. Balanced Scorecard complements

I. INTRODUCTION
Schools, universities, institutions of adult education and
professional training are different from organizations
manufacturing public goods in two senses. They are
providing services and their core activity is educating. Their
peculiarities deriving from these two characteristics
determine they way of management as well.
II. MANAGEMENT OF SERVICES
Education is a service, therefore to understand the
management of educational organizations one has to be
aware of the specialties of the management of services. The
most adequate definition of ’service’ is: „A service is an
activity or performance one offers to another. …
Performance is intangible and it does not entail the
ownership of the resources of the production. Service is a
business activity that creates value and provides advantages
to the customer … by accomplishing the change the client
wished.” [1].
Education is a professional service, because it is labor-
intensive, interaction and client-orientation is significant.
And it is a mutual service, because it is not possible without
the active cooperation of the client. In the management of
services the priority is the quality perceived by the client.
Thus, the principles of the management of services are the
following [2].
a) Profit is created by the quality perceived by the client,
so the business objective is not external efficiency,
productivity or the economies of scale (in fact, large output –
too many students – can be a drawback), but total efficiency.
It is internal efficiency and external efficiency – including
for example customer relations. Due to this, control in
services should not focus only on financial results, but has to
take other aspects of organizational success into
consideration. The so called Balanced Scorecard reflects this
attitude. Balanced Scorecard is a performance measurement
tool developed in 1992 by Harvard Business School
professor Robert S. Kaplan and management consultant
David P. Norton. Kaplan and Norton’s research led them to
believe that traditional financial measures like return on
investment, could not provide an accurate picture of a
the financial measures with operational measures on
customer satisfaction, internal processes and the
organization’s innovation and improvement activities. These
operational measures are the drivers of future financial
performance. [3]
b) Decision points in the organization have to be close to
the client-organization interfaces. Front staff dealing directly
with the clients (administrators, teachers) must have the
authority to make prompt decisions. Thus, decentralized
organizational structures fit better to service providers than
centralized ones. Centralization and decentralization pertain
to the hierarchical level at which decisions are made.
Decentralization means that the decision authority is pushed
downward from the top to lower levels of the organization.
c) Organizational culture must focus on total efficiency
and must show flexibility in order to mobilize resources for
supporting customer relations. Organizational culture
evolves on the norms, values, beliefs, behavior patterns of
the people. Organizational success based on customer
satisfaction must be in the focus of all these in the case of
service providers.
d) Quality and performance are less standardized than in
industrial organizations, because individual customers need
individual solutions. Thus, working by guidelines is better
than by rigid directives. Consequently, taking responsibility
and making decisions on the part of the employees is more
important than strictly obeying to the protocols. It influences
the proper leadership style as well. The extent of employee
participation and empowerment is the crucial issue in many
major leadership models. Kurt Lewin identified three
different styles of leadership: autocratic, democratic and
laissez-faire. Autocratic style leaves little authority to
employees, while democratic involves members in decision-
making and laissez-faire leaves almost everything to them.
[4] Rensis Likert distinguishes autocratic, consultative and
participative styles of leadership based on the degree to
which people are involved in the decision-making.
Tannenbaum and Schmidt separated five styles of leadership
depending on the involvement and freedom of employees:
telling, selling, consulting, sharing and delegating. In
educational organizations where employees are highly
educated professionals democratic, participative, delegation-
based leadership is proper.

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e) The basis of performance appraisal and compensation
must be the satisfaction of the clients. Performance appraisal
is the process of observing and evaluating an employee’s
performance, recording the assessment and providing
feedback to the employee. It plays a major role in
accomplishing organizational goals such as satisfied clients.
The term compensation refers to monetary payments and
goods and commodities used in lieu of money to reward
employees. Pay-for-performance, also called merit-pay or
incentive system ties at least part of the compensation to
employee effort and performance. Thus, it is more suitable to
acknowledge and foster good customer relations than
payment based exclusively on the job (like in public schools
or universities).
III. MANAGEMENT OF EDUCATION
Education management has become an independent
discipline due to a new approach: management training can
improve the efficiency and quality of educational
organizations. There is a debate whether the management of
educational organizations differs from that of other types of
organizations. There are two approaches. One considers the
management of educational organizations as one field of
general management, the other regards it as an individual
discipline.
- Theory of common principles: Management has general
principles appropriate in every organization.
- Theory of special case: The management of educational
organizations is special enough to train their leaders
specifically.
Seven features can be listed that make the management of
educational organizations definitely different from that of
others’. [5]:
a) Defining the objectives in educational organizations is
more difficult than in business enterprises. Non-profit
educational organizations do not have the clear objectives of
the commercial organizations: maximizing output and profit.
Plus, they are expected to develop individual skills, while
they should educate people to meet the norms of the society.
In for-profit educational organizations educational objectives
may confront with business objectives.
b) It is difficult to tell whether education has attained its
objectives or not. Success can not be measured in financial
terms: sales, profit or dividend.
c) The fact that ’the student’ is in the center of an
educational organization causes some difficulties. Students
can be regarded as clients, but also as the raw material of
production. But students are different from industrial raw
materials. They can not be processed, and teaching and
learning are based on personal relationships, they are loaded
with individual characteristics and the result is impossible to
predict. This human volatility makes the evaluation of
performance even more complex.
d) Teachers also have characteristics that cause difficulties
for management. Leaders and teachers of schools have
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common education, professional roots, values, experiences.
Plus, teachers demand a certain amount of autonomy in the
teaching process, and their relationship with the students is
difficult to define or control.
e) The agent-client relationship of teacher and student is
different from that of other agents and clients. Student-
clients have only limited opportunity to choose their teacher-
agents. And satisfying students’ expectations does not
always serve their true interests.
f) External actors strongly influence the decisions of
educational organizations. And in large organizations the
different training programs, locations and semesters are all
decision points. These two factors make decision-making
and allocation of responsibility difficult.
g) Many top and middle managers in educational
organizations do not have enough time to deal with
leadership issues. They often have lectures and other
education-related tasks. So their time spent on managing the
organization is limited and it has serious consequences.
When appreciating the extent an educational organization
differs from a typical business organization we can rely on
Carlson’s categories (1975). He describes domesticated and
savage organizations. If pupils are automatically sent to the
local school the institution is a domesticated organization.
The society it serves protects it from the negative factors of
the environment. Thus, it does not have to fight for its
survival. Like a domesticated animal it is fed and cared for,
its existence is guaranteed. Although it has to compete for its
resources its funding is not connected to the quality of its
services. Savage organizations on the other hand are
permanently fighting for survival. Their existence is not
guaranteed, they may close down any time. Their funding
depends on the quality of their services and there is no
guarantee for new clients.
IV. ORGANIZATIONAL AND MANAGEMENT
CHARACTERISTICS OF HIGHER EDUCATION
INSTITUTIONS
There are a large number of models available for the
typology of universities as organizations. Henry Mintzberg
identified five types of organizations on the basis of their
crucial structural characteristics: simple structure, machine
bureaucracy, professional bureaucracy, adhocracy and
divisional structure [6]. Most public universities including
Hungarian ones adhere to the professional bureaucracy type
by and large. It has several advantages but it also limits a
more effective operation. The professional bureaucratic
features of the public universities are the following.
- The most important part of a university is its operating
core, the departments and institutes comprising the staff of
academics. In all Middle-European post-communist
countries such as Hungary, Romania, the Czech Republic,
Slovakia and Poland the power is still in the hands of the
faculty. The main decision-making body of the university is

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the senate with the representatives of the professors and the
students.
- As a typical feature one should mention the relatively
large size and weight of the support staff (including various
administrative offices and other non-training organizational
units) running separately from the operating core. In
Hungarian universities administrative and functional units
operate on different terms: differing regulations concerning
wages and promotion, opening hours, financing. The support
staff with its parallel hierarchic structure, differing culture,
norms, values and rules of operation is often involved in
conflicts with the training units. These conflicts often surface
in complex projects that involve both faculty and
administration. Bringing these two subsystems closer to each
other would be crucial to a service provider university.
- The various operating units deal exclusively with their
own clients (students). In Hungarian universities the
cooperation between the different departments even of the
same faculty is not always smooth and depends on the
willingness of the heads and the members.
- The primary coordinating mechanism that ensures the
appropriate operation of a university are the standardized
skills and knowledge of its employees. Quality in higher
education is assured by the fact that each instructor has
acquired the necessary skills. These skills are determined in
the application requirements for a job. They are specified
outside the university with little space for action left for the
university within the legal framework. In Hungary university
employees have the legal status of ‘civil servant’ with
detailed job requirements set by the laws of civil service and
higher education. These requirements are rather inflexible.
They are not adapted to local needs and fail to respond to the
constantly changing challenges in a flexible way. In Hungary
the job requirements for an instructor in higher education are
the same regardless of the type of the institution (community
college or research university). Furthermore, these
professional requirements relate only to the moment of
awarding a job or a degree. Thus, they fail to foster
continuous development. In Hungary performance appraisal
of faculty is not wide-spread.
- There is a strong division of labour and job specialization
at the universities which is a consequence of the activity
involved: teaching different disciplines. However, professors
should not work in separation from their peers, and the fact
that they often do so decreases the efficiency of teaching and
research. As there are several specialists working within the
same discipline but in different units in a university there is
an evident need to cooperate. Nevertheless the chance to
capitalize on synergy offered by mutual work has been
recognized only rarely. What is typical instead is
professional jealousy and adherence to one’s „ivory tower”.
- Decentralization is also a natural phenomenon in
universities. But decentralized organizations are only
capable of working efficiently if they could adopt a common
strategy which represents the long-term interests of the
organization as a whole and the decentralized units are
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willing to set their particular interests aside and act for the
common goal. This is not the case in most of the Hungarian
universities. The main decision-making body is the senate
consisting of the representatives of the faculties. Thus the
particular interests of the faculties are more prominent in the
strategic decisions than the overall interest of the university.
- Power is essentially tied to expertise. An administrative
manager can maintain power only if he is a qualified
member in the professional field concerned: He is either
directly elected by the academic staff or the position is
awarded upon their approval. In Hungarian universities
administrative managers (e.g. financial director, attorney
general, functional unit heads) are elected by the senate.
Lack of strong managerial control over an instructor’s work
is one of the basic features of higher education. It naturally
has its positive sides as direct control makes creative work
very difficult to accomplish. Yet the lack of performance
criteria and assessment entails abnormalities of operation
and is, in my opinion, the reason for the obvious absence of
motivation in the case of some members of the academic
staff.
- The organization of a university is bureaucratic in
character. In other words its typical features include
formalization and standardization of the relevant procedures,
associated with a high level of control. It is a necessity to
ensure appropriate quality in mass higher education. Neither
the current volume of activities, nor the size and articulated
structure of the organization allow an organic architecture.
Nevertheless typical disadvantages of a bureaucratic system
must also be taken into consideration, for example a lower
level of innovation, creativity and entrepreneurship.
Formalization is antagonistic to the spirit of education and
research.
- Universities can be characterized by an informal yet
standardized attitude. The academic staff assumes a standard
behaviour owing to the fact that they get socialized into
academic culture when they are admitted to the university.
Therefore they acquire the standards of behaviour by the
time they start their academic career.
Mintzberg considers professional bureaucracy an ideal
organizational setting in a complicated yet stable
environment. But contemporary Hungarian universities
operate in a complicated environment changing dynamically
and constantly. According to Mintzberg adhocracy is the
ideal type of organization in a complicated and dynamic
environment. Thus, universities should adopt some features
of adhocracies to be more efficient in a changing
environment.
A related objective may include the stronger coordination
of the work performed by the support staff and to connect it
more closely to the operating core. Flexibility in the structure
and organizational architecture is also to be increased. In
addition to a flexible structure there is a clear need for
flexibility, speed, creativity, entrepreneurship in decision-
making. Scopes of decision-making competence should be
revised. Making decisions by those who have the

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competence (expertise and due consideration of the long-
term interests of the organization) and assume responsibility
for the consequences of such decisions could be a guiding
principle. Entrepreneurship of the top management is to be
strengthened. Because of the drop in the number of students
it is important to explore new markets (adult training, foreign
students) and a stronger cooperation with industry and local
society is necessary. These all need an entrepreneurial
attitude on behalf of the institutions.
V. CONCLUSION
In most of the countries there are basically three types of
educational organizations: public institutions (schools and
public higher education institutions, regional training
centers), commercial organizations (such as limited liability
company, incorporated company), non-profit organizations
(e.g. foundations). Public institutions and nonprofits are
closer to domesticated organizations in Carlson’s model and
commercial organizations are the savage ones, but education
systems have recently shifted toward being savage.
Nowadays not only market-oriented commercial
organizations compete for clients and funds. Non-profit and
public institutions also have to find alternative funding.
Their existence also depends on how attractive they are for
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the clients. Hence, we think that the management of
educational organizations should apply theories and practices
of the business world taking into consideration all the special
characteristics deriving from being the providers of a special
service: education. Because the introduction of too much
market mechanism into educational organizations will make
them conform to the present situation but not provide any
real vigor for progress in society. This is very true for public
universities as well, these professional bureaucracies should
take on some progressive features of the more flexible
adhocracies while protecting the academic values.
REFERENCES
[1] C. Lovelock, L. Wright: Principles of Service Marketing and
Management. Prentice Hall, 2001. p. 6.
[2]. B. Heidrich: Szolgáltatás menedzsment. Human Telex Consulting,
Budapest, 2006. pp. 35-37
[3] Encyclopaedia of management. Gale Cengage Learning. Michigan,
USA, 2009. p. 29.
[4] Encyclopaedia of management. Gale Cengage Learning. Michigan,
USA, 2009. p. 459.
[5] T. Bush: A menedzsment fontossága az oktatásban. OFI, 2009. 06. 17.
[6] H. Mintzberg: The structuring of organizations: A synthesis of the
research. Englewood Cliffs, NJ: Prentice Hall. 1979.