116111 K. Wennberg, C. Sandström (eds.), Questioning the Entrepreneurial State, International Studies in Entrepreneurship 53, https://doi.org/10.1007/978-3-030-94273-1_7 S. Terjesen

112since business school academics attempt to teach best practices in strategy and structure to the next generation of business leaders, and would want both their institutions as well as their students’ organizations to create and maintain effective, efﬁcient, and entrepreneurial structures.

Bureaucracy is expensive in time, money, and other resources. As anthropologist David Graeber (2015) noted in The Utopia of Rules, in the history of the world, our present population spends the greatest amount of time on paperwork. And this bureaucracy is costly: since 2008, productivity growth has slowed 1.24% annually, even despite the “second machine age” with advanced robotics, artiﬁcial intelligence, and the Internet of Things. Bureaucracy is estimated to cost the U.S. economy $3 trillion annually and is “kryptonite for productivity” as individuals at the top of their organizations become more isolated, and consequently, their organizations become less responsive to external stimuli (Hamel & Zanini, 2020). The result is that many employees see themselves as powerless to shape their organization’s strategies, and become resigned to a lack of initiative and responsibility for anything beyond a very narrow role. Higher education bureaucracy grows exponentially due to both external (e.g., increased regulation of universities, particularly at federal and state levels) and internal (e.g., a labyrinth of time-consuming, low-value-added internal administrative processes) forces. The costs of an astronomical expansion of academic bureaucracy are usually passed on to students, and reﬂected in the nearly 200% increase in college tuition and fees from 2000 to 2021, as compared with a basket of goods in which some product prices dropped (e.g., televisions by 100%) (see Fig. 1; Perry, 2021). This exponential cost increase is a tremendous burden for students, and ultimately their families who often fund their studies, and also for taxpayers who indirectly support students’ federal loans. Moreover, these costs are often driven by top-down policies, which also stiﬂe universities’ functioning, innovativeness, and autonomy. The costs partly reﬂect the growing set of full-time administrators within universities, as documented by scholars around the world, and depicted in Table 1. A longitudinal study of the entire population of Swedish universities reports that the number of higher education administrators grew by almost 200% compared to just 23.9% for teachers and researchers from 2001 to 2013 (a nearly tenfold difference), and administrators increased in number another 14% from 2014 to 2018 while the number of teachers and researchers actually declined (Andersson et al., 2021). U.K. analyses reveal that greater administrative intensity leads to lower student satisfaction, suggesting that students would prefer resource allocation to front-line rather than back-line tasks (Andrews et al., 2017). This study also indicates an overall inverted u-shaped relationship between administrative intensity and multiple performance measures such that some central administration is essential, but beyond a certain point, there are rapidly diminishing returns.

Administrative layers are created for a variety of reasons. For example, new federal or state legislation may require additional reporting that requires an administrative line, which can be fulﬁlled by either staff or faculty who take on administrative responsibilities. Many assignments once under the domain of faculty can be Reducing Higher Education Bureaucracy and Reclaiming the Entrepreneurial. . .

Fig. 1 Price changes for select U.S. consumer goods and services and wages (2000–2021). Source: Perry (2021)

capably handled by staff. Administrative staff positions sometimes require a certain title to reach a salary range, and also to provide career mobility and trajectory. This phenomenon then manifests in higher salaries, as documented by Andersson et al. (2021): The salaries of Swedish universities’ group administration increased from 6% to 16% of total budget during the 2001–2013 time period.

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Table 1 Administrative growth in higher education Key Findings Sample Study U.S. universities 1985–2005 Changes in supply of and demand NCES 2006, cited in for administrative services Ginsberg, (2011) +240% staff +85% administrators +56% student enrollments +50% faculty +50% # of degree granting institutions +57% # of BA degrees granted Changes in supply of and demand Swedish universities (entire Andersson et al., population) 2001–2018 for personnel (2021) +23.9% researchers and teachers (2001–2013) +200% Administrators (2001–2013) 2.5% researchers and teachers +14.3% Administrators (2014–2018) Changes in wages +275% Administration (2014–2018) +52% researchers and teachers (2014–2018)

2 Regulation and Bureaucratization in Higher Education

There are two levels of bureaucracy in higher education: (1) externally from regulatory policies from government and other accreditors, and (2) internally in each