After students at Howard University took complaints about the operations of their much-loved college viral, an economist took notice.

It looked familiar.

The concerns raised at Howard as school started last week covered a wide range: broken air-conditioning, WiFi down, lost paperwork at the financial aid office. The university’s president responded quickly to resolve the problems, some of which couldn’t be fixed overnight.

Jason Coupet, an assistant professor of public administration at North Carolina State University, does research in efficiency theory and measurement, strategic management in the public sector, and historically black colleges and universities (known for short as HBCUs). 

He got interested in studying the efficiency of HBCUs after hearing friends and family members echoing similar themes: They loved their schools and the education they got there. But it was so hard every semester to register for classes (or get financial aid, or log into the network, or get a problem fixed in their dorms).

Coupet, a staunch believer in the contributions such schools make in furthering scholarship of students who might otherwise not have the same opportunities, decided to look into whether there were structural problems that were clogging things up and slowing things down.

Here is his take on how to use the lessons of organizational economics to make HBCUs more nimble.

By Jason Coupet

Recently, students at Howard University took to Twitter to shed light on systemic issues making staying in school and day-to-day activity difficult.

There isn’t much research on the efficiency of HBCUs, but early results suggest that HBCUs are at least as efficient as their peers. There is also evidence of good labor market outcomes for graduates of HBCUs, as well as a well-noted competitive advantage  for graduating students.

To be sure, students at many non-HBCUs struggle to navigate cumbersome bureaucracy and governance issues. However, HBCUs primarily serve African American students, who have much more limited wealth than average when they enter college.

African American students can be more sensitive to the kinds of issues pointed out by the students at Howard recently. Students from families with little or no wealth, for instance, have limited resources to fall back on when financial aid resources take months longer to process than necessary, and they are much more likely to drop out or transfer for nonacademic reasons.

The kinds of issues described by the students at Howard — bureaucratic stalling, cumbersome policies and inconsistent information — can be seen as “transaction costs,” or organizational frictions that make movement of resources and ideas through an organization slower.

HBCUs are severely under-resourced, and this plays a large part in issues that appeared in many of the Twitter comments, like facilities management.

However, early research shows that there is one notable organizational factor embodied at many HBCUs that make them, and thus their students, predisposed to transaction costs: top-heaviness.

HBCUs have historically endowed executives and administrators with far more power than non-HBCUs do. Presidents and board members tend to exhibit heavy-handed behavior at many HBCUs, something accreditation boards have noted in recent evaluations.

This is borne out by financial data, as well. According to the data collected by the National Center for Education Statistics, HBCUs spend more money on executive and administrative operations per student than other universities.

That means that HBCUs are vulnerable to many of the transaction costs that plague top-down organizations.

Top-heavy organizations are less nimble, slower to respond to day-to-day operations that typically require flexibility. It also means that even minor crises, like leaks in buildings or software disruptions, are typically slow to be resolved if every issue needs to be barked up to the top of the administrative ladder.

Top administrators and executives should have their time mostly consumed with strategic issues like fundraising and macro organizational goals. With so much concentrated power, issues pile up at the top instead of being resolved by administrators and staff farther down the organizational chart and more local to the problem.

This can be highly problematic for students.

Early research seems to support this empirically, showing that when other factors are held constant, increases in administrative expenditures at HBCUs tend to accompany a decrease in graduation rate, a phenomenon not observed in non-HBCUs.

Like in most top-heavy organizations, it also means that it is difficult, or impossible, to evaluate the performance of units that report to executive administration.

It also makes personnel and facilities decisions, such as who should be promoted from the financial aid office or what company will design new buildings, more susceptible to the political factors that executive boards and top administrators are usually concerned with. After all, despite having local decision-making power, they are farther away from the day-to-day issues and less likely to know what works best than more local staff.

So, how are these issues repaired in organizations with limited resources?

Work by organizational economist William Ouchi at the University of California at Los Angeles and others in educational management suggests that transaction costs are minimized when power and resources, especially when they are limited like in the case of HBCUs, are disseminated to staff farther down the organizational chart so that they can best address issues in day-to-day operations.

After all, the faculty and staff of a department or unit surely are more in tune with day-to day needs than administrators who have more limited contact.

Progress of units and departments can then be held to key performance indicators, agreed-upon goals to improve the organization’s performance. These can include larger goals, like retention of students, as well as day-to-day operational assessments like student satisfaction with organizational processes, which can be easily assessed by survey.

The performance of any institution can also be benchmarked against that of other HBCUs, who can then be contacted for best practices.

Much of what ails HBCUs in general can be explained by discriminatory practices in the external environment. This doesn’t suggest that public or private resources should be accompanied by external reform demands. After all, this adds another heavy-handed administrative body to an already top-heavy mix.

Labor market discrimination and wealth inequality also suggests that financial issues at HBCUs can’t necessarily be fixed by ramped-up giving campaigns.

However, there has been a movement to move HBCUs toward shared governance. Doing so would make HBCUs more nimble, which is surely a worthy goal when the mission is so crucial.