Raymond Da Silva Rosa: Universities win support of the public by pursuing shared goals
Australian universities are often accused of being run like for-profit corporations — a charge that is only half-accurate.
US economist Gordon Winston aptly described universities as part-car-dealer and part-Church, devoted partly to commerce and partly to ideals that lend it support from stakeholders.
An effective combination of commerce and ideal principles is what enables universities to survive for centuries. The pure pursuit of for-profit commerce is too risky in the long run. During lean periods, it is the support of stakeholders who share the university's vision that allows it to survive.
Two examples: the once great for-profit Hudson's Bay Company, founded in 1670, filed for bankruptcy in March 2025; in contrast, Harvard University, founded a few decades earlier in 1636, is still going strong, fortified by a US$53 billion ($81.6 billion) endowment made possible via generous donations from stakeholders who support its ideals.
UWA's founding in 1911 shows the importance of shared vision. It wasn't the opportunity to make a profit that prompted the establishment of WA's first university. Rather, it was that the great and the good of Western Australia, including Sir John Winthrop Hackett, then-editor and owner of The West Australian, who wanted a university that reflected the State's ambitions. These ambitions are what prompted Thomas Walker, the-then WA minister for education, to urge his fellow inaugural UWA Senate members in 1912 to '… do things on a scale worthy of our great destiny!'
Hackett provided essential funding that seeded UWA's endowment.
Given their hybrid nature, an ongoing challenge for universities is knowing when to act like a charity and when to behave like a for-profit entity, with considerations such as efficiency in operations taking precedence over ideals. It's easy to get the balance wrong, particularly when the impact of misjudgment doesn't show up in the near-term.
Research is one area where universities are at risk of imitating for-profit entities too closely. Managing research activity by using a measure such as the number of publications produced over a set period may appear reasonable to establish accountability and spur performance, but is misguided when pursuing high-impact research.
To be clear, the principle 'publish or perish' has long applied to academics in universities. Historian Steven Turner says that as far back as 1737, a report that the professors at the university in Frankfurt-an-der-Oder were unknown because they published nothing resulted in a command from Berlin to the academics to begin writing.
The issue is evaluating quality. University ranking systems, based mostly on research published in prestigious 'hard-to-get-into' academic journals, have made it easy for university managers to use these publications as a measure of productivity and quality.
The problem is that prestigious journals favour conventional wisdom when accepting papers. Mostly, it's OK because conventional wisdom is mostly right. The drawback is that radical ideas, which happen to be correct, risk getting rejected.
Famously, UWA's Barry Marshall and Robin Warren took years to convince a sceptical medical establishment that gastritis and peptic ulcers were due to stomach infection caused by the bacterium helicobacter pylori. Fortunately, they persisted and weren't sacked for research underperformance in the interim.
It's straightforward to improve a chronically unproductive research team by managing them via the numbers. It's much harder to develop a high-performance culture that identifies talented people and promotes risk-taking and persistence.
In such an environment, breakthroughs won't appear on schedule. There will be many failures and an occasional large triumph. Fine judgment, not numbers, is the key to high performance research management.
Universities win the support of the public not by wholesale adoption of the methods of industry but by pursuing shared goals. Universities can't be held to account too closely and will often disappoint, but in the long run it is vital they win the trust and affection of the community that supports them. It's tricky work.
Winthrop Professor Raymond Da Silva Rosa is an expert in finance from The University of Western Australia's Business School
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