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International Journal of Management (IJM)
Volume 7, Issue 7, November–December 2016, pp.98–113, Article ID: IJM_07_07_010
Available online at
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A CONCEPTUAL MODEL FOR GOVERNANCE OF
PRIVATE UNIVERSITIES AS SOCIAL ENTERPRISES
Devang Joshi
Research Scholar, Faculty of Management Studies (FMS),Indukaka Ipcowala Institute of Management,
Constituent of Charotar University of Science and Technology (CHARUSAT), Gujarat, India
Dr. V G Patel
Former Director, Entrepreneurship Development Institute of India, Ahmedabad, Gujarat, India
ABSTRACT
The concept of Social Enterprises has emerged and evolved in last two decades. Their
emergence has gained momentum as the void in services which are not catered by Government and
Business sectors have increased worldwide. Social entrepreneurs, the enterprising individuals, are
filling this void through Social enterprises. While bringing out the phenomenon of emergence and
need of private universities the paper evidences a private university as a Social enterprise. The
changing expectations from Society are the spur to draw the rationale of governing a private
university as a social enterprise.
India requires successful and sustainable private universities to meet its Higher Education
goals. This study proposes a framework covering dimensions for achieving success and
sustainability of a private university governed as a social enterprise.
Analysis of the proposed framework for managing a private university as Social Enterprise is
undertaken. Challenges of managing University as a Social enterprise are also presented.
Key words: Social enterprises, Private University, Governance, Legitimacy, Stakeholders,
accountability, ethics and values.
Cite this Article: Devang Joshi and Dr. V G Patel, A Conceptual Model for Governance of Private
Universities as Social Enterprises. International Journal of Management, 7(7), 2016, pp. 98–113.
http://www.iaeme.com/IJM/issues.asp?JType=IJM&VType=7&IType=7
1. INTRODUCTION
The higher education sector in India and across the world is witnessing major changes. More contribution
is expected from Universities towards their fundamental role of societal transformation. The role of
Governments in regulating and financing the universities is getting redefined. To what extent Government
should fund universities and should the universities be funded at all; are some of the questions indicative of
this changed role. Stupendous development of Information and Communication Technologies has affected
all the aspects of life and higher education is no exception. These changes have precipitated into
considering governance and management of universities with a fresh perspective (Bleiklie&Kogan2007).
A Conceptual Model for Governance of Private Universities as Social Enterprises
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This consideration sets the canvas for this paper. Privatisation in higher education sector adds a different
colour to this canvas.
Being aware of its budgetary limitations, Government has allowed entry of private players to establish
universities to meet need of Society. India, in 2015, had a Gross enrolment rate (GER) in Higher Education
of 24.8 % (British Council - India, 2015).Through its 12
th
Five year plan India envisages to achieve GER
of 30 %. This capacity expansion cannot be met unless Private universities develop in the country. There is
ample knowledge available on different management models for achieving success of a University. These
models focus more on the core processes of University covering teaching and research. A research gap
prevails on management approaches leading to success of a private university maintaining its basic purpose
of societal development. This articleen compasses study of a Private University as a Social enterprise and
sustainability. It attempts to answer several questions like what is the need of Private University, should a
private university prioritise profit making over social mission, what is the role of Social entrepreneurs who
manage the private university to success, does ethical practice affects the success and sustainability, and
what are the operational aspects to be focussed for sustainability.
Social enterprise research has been marked with narratives on need, typologies and governance
approaches. The paper starts with introducing concept and facets of social enterprises as relevant to this
study. It’s followed by perspective on Private university scenario prevalent in India. Taking several studies
into consideration a rationale for governing private university as a social enterprise is developed. The
defining facets of Social enterprise are mapped to analogous facets in a Private university. Through study
of research undertaken in the area of Social enterprises, the dimensions of success paradigm of a Social
enterprise are sculpted. Based on that, a framework is suggested for achieving success of a private
university as a social enterprise. Challenges faced by Private Universities are also discussed to elucidate
about institutional environment required for private universities to flourish. Towards the end, conclusion
and suggestions for further research are presented.
2. SOCIAL ENTERPRISE CONCEPT AND FACETS
The emergence of organizations who have primary motive of social service and who generate income for
their sustenance has gained momentum in last two decades. Such organizations have come to be termed as
Social Enterprise (Satar & John, 2006). Social enterprises have developed in the realms of the “third
sector” other than the government sector and the business sector.
Although Governments are mandated to look after welfare of the population they are encumbered with
conflicts of interests, sluggish bureaucracy and policy paralyses; while the Business sector is benefiting
only its investors and customers. These limitations of both the sectors have resulted in many vulnerable
sections of society who are left out from the welfare of the State or who are incapable of buying services
from Business sector. These sections are in need of basic services like food, shelter, clothing, education,
healthcare and employment. The third sector organizations have emerged to serve the needs of these
sections of people. The Social Enterprises are the organisations falling in this category.
A Social enterprise can be understood as an organisation addressing social problems through
innovations and self-sustaining operations. It uses business strategies for generation of income leading to
their self-sustainability (Greene, 2012). A social enterprise undertakes economic activities to generate
income to sustain its social mission.
3. SOCIAL ENTERPRISE: PROBING THE FACETS
Varied definitions and interpretations of a social enterprise are deliberated in literature. These are
embracing different facets like legal structure, their founders and their focus (Wronka, 2013).
The concept adapted for the purpose of this study and based on available definitions is:
Social enterprise sare private organizations initiated byan individual or a groupof people with an aim to
cater to social needs that were not, in their judgement, adequately provided by government or businesses.
Devang Joshi and Dr. V G Patel
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These organizations under take commercial activities for income generation to sustain their primary
objectives (Martin & Osberg, 2007).
This conceptualization captures two prominent facets of a social enterprise. These facets are Social
facet and Economic Facet.
3.1. Social Facet
Social facet of a Social Enterprise in its essence comprises identification of a social need and satisfaction
of that need by efforts of Social entrepreneurs who establish a Social enterprise.
3.1.1. Need and Beneficiaries
Addressing a social need is the primary reason for coming into existence for Social enterprises. This need
is reflected through beneficiaries who benefit from the activities of a Social enterprise. These beneficiaries
may or may not be customers of the business activity carried out by a Social enterprise.
3.1.2. Social Entrepreneurs
Social Enterprises are established by an individual or a group of people who have an urge to address a
social need (Bornstein, 2007). These people are enterprising and altruistic in nature and are termed as
Social entrepreneurs (Martin & Osberg,2007).Explaining Social Entrepreneurs, Dees (2001) notes that
Social Entrepreneurs are entrepreneurs with a social mission. For them mission accomplishment is central
criterion and wealth creation is just a means to that end.
3.2. Economic Facet
Contrasting with not-for-profit organizations, social enterprises do not solely depend on donations and
grants for their income. They generate their own income through offering goods and/or services (Doherty
et al, 2009).Their financial sustainability is dependent on deciding the income generating activities to be
undertaken and efficiency thereof. Professional management practices leading to efficiency are the
important dimensions of the Economic facet of a Social Enterprise. All financial resources are generated
and employed by a Social Enterprise towards achievement of its social mission. Focus on economic facet
of a social enterprise ensures its self-sustainability leading to successful achievement of its social goal.
The facets of a Social enterprise are illustrated in figure 1:
Figure 1 Key Facets of a Social Enterprise
Social Enterprise
Social Facet
Social Mission to cater a
social need
Social Entrepreneurs with
urge to serve society
Economic Facet
Income generation for
self - sustainability
All economic activities
aligned with social goals
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4. PRIVATE UNIVERSITIES: INDIAN PERSPECTIVE
Presently, India is considered as the second largest country in higher education system after China in terms
of number of students enrolled in Higher Education(British Council - India, 2015).The National
Knowledge Commission (NKC) of India in its report of year 2007 had recommended establishment of
1500 universities by 2015 to achieve Higher education goals of Country. At present, up to July 2016, only
761 universities are existent in India.(Wikipedia, 2016)This is barely half of the goal recommended by
NKC. This shortfall indicates that the State and Central governments are lagging behind in fulfilling the
need of Society. This may be because of budget constraints or misplaced priorities or both. Because of
unsatisfied social needs and facilitating government policies, private universities have emerged in society.
Emergence of Private Universities is a phenomenon happening not only in India but it is happening
across the globe. A World Bank report published in March 2008 (Fielden, 2008) – ‘Global Trends in
University Governance’ states that:
“The higher education strategy of many countries recognizes that without a thriving private sector the
national targets for participation in higher education would be simply unachievable. Not only is the cost of
expansion beyond the budgetary possibilities of the state, but in many cases the existing institutions are
vulnerable to respond adequately the changing needs of the market; private providers can move faster and
sometimes more effectively to fill gaps in supply of higher education.”
The report not only indicates the phenomenon of emergence of Private universities, it also underpins its
requirements for development of Society.
In India, the private universities are typically established by a registered Trust or a Society and obtain
legal status through State legislature or Parliament (UGC, 2003). A not-for-Profit Company registered
under Section 25 of Company’s act 1956 is also allowed to establish a private university.
The present regulations and laws do not allow Universities to generate profit for personal benefits of its
founders and promoters. Any surpluses generated have to be ploughed back fully for the development of
the university.
5. RATIONALE FOR GOVERNING PRIVATE UNIVERSITIES AS SOCIAL
ENTERPRISE
Universities across the globe are established with a mission of societal development. They can have
significant social impact through contributions in scientific, cultural, economic and political development.
However, till last many decades, Universities were governed and managed with the approaches falling
in the realms of Organisational theories. These approaches are characterised by inside-out lenses where an
organisation functions as per its own perceived needs rather than considering outside needs of Society. The
universities acted in ivory towers underlining their freedom to follow their academic and research pursuits
with little or no attention to the needs of the society. The governments funded universities and obliterated
their dependency on society for funding. There was no ‘’pressure’’ on universities to work with sole
objective of satisfaction of societal needs.
This observation is more clearly emphasised through a World Bank Report on Governance and
Management Arrangement around the Globe 2009. (Saint, 2009) as under:
The dominant model (of University Governance) was characterised as a “republic of scholars’’ in
which academic freedom and the pursuit of knowledge were the overriding values. The institutional
Mission was to preserve knowledge, add to accumulated understanding and transmit this intellectual
inheritance to the next generation. Any attempt to introduce accountability for performance was routinely
rejected as an attack on academic freedom.
This trend of University Governance has been changing since last couple of decades. The Society has
come to expect more from Universities. The Governments have come forward with reforms giving
Universities academic flexibility and at the same time expecting accountability towards society.
Devang Joshi and Dr. V G Patel
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The same World Bank report (Saint, 2009) indicates this by stating:
Overreaching Government Control and public call for reform resulted in the approach to institutional
governance and management in higher education, which may be termed as the ‘Autonomy with
accountability’’ model (Neave and Vught, 1994). On the one hand it seeks to provide institutions with
freedom and flexibility and on the other hand, it strives to ensure that institutions are good stewards of
public fund, provide quality education in return for public support and produce graduates, research and
services that are relevant to the needs of society and the economy.
Bleikie & Kogan (2007) explain this occurrence stating that ‘Organisational and decision making
structures of Universities are organized around two central ideas about governance. Any university may be
seen either as a ‘republic of scholars’ or as a ‘stakeholders’ organisation’. Both the approaches lead to
different outcomes. ‘Republic of Scholars’ approach prioritises academic freedom and institutional
autonomy. Whilst, the ‘Stakeholders’ Organisation’ approach primarily considers interests of all the
stakeholders.
The analysis of published theories and practices points towards the ‘Stakeholders’ Organisation’
approach alternatively reflected as ‘Autonomy with Accountability’ approach for the Governance of
present day University. The existing Government universities are found incapable of responding towards
changing expectations of Society conforming this approach (Singh, 2011).Whereas, this approach becomes
aninevitability for the governance of Private Universities as they directly depend upon Society for their
funds and sustainability. With this come explicit and implicit expectationsfrom different stakeholders of
society for delivering as per their need. This is the rationale leading to the approach of governing private
universities as a Social Enterprise.
6. PRIVATE UNIVERSITY CHARACTERISING A SOCIAL ENTERPRISE
Indicating commensalism in a social enterprises, the social missions and economical activities are mutually
beneficial.(Gonin, Besharov & Smith, 2013). A private University resonates this hybrid character of a
Social Enterprise. Figure 2represents facet-based mapping of a Private University reflecting the
characteristics of a Social enterprise. It indicates that the conception of a Private University and its
activities echoes the characteristics of a Social enterprise. The rationale of governing a private university as
a Social Enterprise is validated by this analysis.
Figure 2 Facet-based mapping of Private University as a social enterprise