Why Can’t Schools Be Like Businesses?

Dissecting the wrong assumptions and ill-conceived logic of business-minded reform proposals for public education by Larry Cuban

In answering the question posed in the title, I begin with a story that businessman Jamie Vollmer told to educators a few years ago:

“I stood before an audience filled with outraged teachers who were becoming angrier by the minute. My speech had entirely consumed their precious 90 minutes of in-service training. Their initial icy glares had turned to restless agitation. You could cut the hostility with a knife.

“I represented a group of business people dedicated to improving public schools. I was an executive at an ice cream company that became famous in the middle-1980s when People magazine chose its blueberry flavor as the 'Best Ice Cream in America.'

“I was convinced of two things. First, public schools needed to change. They were archaic selecting and sorting mechanisms designed for the Industrial Age and out of step with the needs of our emerging 'knowledge society.' Second, educators were a major part of the problem. They resisted change, hunkered down in their feathered nests, protected by tenure and shielded by a bureaucratic monopoly. They needed to look to business. We knew how to produce quality. Zero defects! Total Quality Management! Continuous improvement!

“As soon as I finished, a woman's hand shot up. She began quietly, 'We are told, sir, that you manage a company that makes good ice cream.'

“I smugly replied, 'Best ice cream in America, ma'am.'

“'How nice,' she said. 'Is it rich and smooth?'

“'Sixteen percent butterfat,' I crowed.

“'Premium ingredients?' she inquired.

“'Super-premium! Nothing but triple-A.'

“I was on a roll. I never saw the next line coming.

“'Mr. Vollmer,' she said, leaning forward with a wicked eyebrow raised to the sky. 'When you are standing on your receiving dock and you see an inferior shipment of blueberries arrive, what do you do?'

“In the silence of that room, I could hear the trap snap.

“I was dead meat, but I wasn't going to lie. 'I send them back.'

“'That's right,’ she barked, 'and we can never send back our blueberries. We take them big, small, rich, poor, gifted, exceptional, abused, frightened, confident, homeless, rude and brilliant. We take them with attention deficit disorder, junior rheumatoid arthritis and English as their second language. We take them all. Every one. And that, Mr. Vollmer, is why it's not a business. It's school.'

“In an explosion, all 290 teachers, principals, bus drivers, aides, custodians and secretaries jumped to their feet and yelled, 'Yeah! Blueberries! Blueberries!'

“And so began my long transformation [from business executive into school reformer].”

A Rare Transformation
The conversion of former CEO Vollmer from caustic critic to stouthearted advocate of educators remains an exception. Had most business leaders and educators learned the painful lesson that Vollmer learned, I would not have written The Blackboard and The Bottom Line. But they haven’t. So I wrote this book to explore the thinking and actions of serious and well-intentioned business leaders and educators, past and present, who sought to turn around inefficient and ineffective school districts and schools to answer the question that I posed at the outset.

In examining business involvement in U.S. school reform, I looked at the 1890s through 1920s and the 1970s to the present — two points in history when business leaders and educational entrepreneurs, fearful of the United States losing out in the global marketplace, sought major school reforms.

Nearly a century ago, business leaders and progressive educators reorganized school system governance by creating small, non-partisan, corporate-like school boards that hired professional managers. They invented junior high schools and created large comprehensive high schools where they installed newly developed vocational curricula to prepare students for an industrial labor market. They compiled test scores that compared students from one district to another so taxpayers would know that their monies were being spent efficiently.

In short, these early 20th century educational entrepreneurs copied successful business practices and used findings from the latest scientific studies to change public school goals, governance, organization, staffing and curricula to tie public schools to the nation’s economy more closely. Many of those changes still exist today.

Now, push the fast-forward button to the 1970s when Japanese and German cars and electronic equipment outsold U.S. products. Another generation of business leaders linked weak sales in the global marketplace to declining scores on international tests and poor schooling. The economy was changing from an industrial base to an information base, and schools were failing to keep pace.

These business-minded reformers, no longer interested in vocational education, wanted every child in cities and suburbs to complete a rigorous high school program and go to college. To achieve this expansion of educational opportunity, districts and schools needed to copy successful businesses that raised their productivity and profits through efficient management and accountability. So state legislatures, aggressively lobbied by business groups, set high academic standards, tested students and established penalties for failure. They introduced choice and competition for students through charters, private entrepreneurs running schools and vouchers.

Redefined Equality
By the first decade of the 21st century, the federal No Child Left Behind law incorporated many of these state measures and ratcheted up testing and accountability to touch every public school in the country — with the same purpose of graduating all students prepared to enter college and a knowledge-based economy.

By focusing on urban children, both generations of business-inspired reformers have redefined equality of educational opportunity. A century ago, entrepreneurs were concerned about poverty and slums eroding educational hopes. The solution that generation sought was providing schooling for immigrants and the poor beyond the age of 12. Anyone could graduate from high school, except in segregated schools in the South and elsewhere, if they completed the newly invented junior high school and went on to high school where job-linked vocational education had been added to the curriculum for those who wanted practical work.

Now entrepreneurs are redesigning recalcitrant urban middle schools into K-8 organizations and big urban high schools into small ones to get everyone into college. In language that condemns the “soft bigotry of low expectations,” KIPP schools, Teach for America, New Leaders for New Schools, charter management organizations and small high school pioneers see opening college doors to poor and minority children as a virtual civil rights struggle.

Parents, of course, seldom disagreed with these business-inspired reformers then or now. They wanted their sons and daughters to get a schooling that would lead to jobs paying good wages and financial security, if not higher status. What civic and business elites wanted for the public good, parents wanted for their children.

As a consequence of these two periods of business-driven school reform, the strong belief that schools and businesses are alike has remained fixed in the minds of most corporate and civic leaders, parents and educators. And both institutions are seriously entangled with one another.

School districts buy products and services daily from local and national companies. School superintendents meet with chambers of commerce and business representatives testify at budget hearings. Vocational education teachers send students into local businesses every day for on-site learning. Businesses release employees to tutor and donate products to schools.

School districts behave as business organizations and even perform similar functions — managing people, planning, budgeting, etc. Yet school districts are expected to meet public obligations and are held politically responsible for their actions and student outcomes, an accountability absent from for-profit institutions.

It is these public/private distinctions that I inspect more closely because those who favor copying businesses to improve schools need to grasp clearly these fundamental differences in values.

Multiple Purposes
Three basic differences separate businesses from schools: The multiple purposes of tax-supported public schools; public responsibility for achieving these purposes; and democratic deliberations in deciding policies and determining school success.

  • Multiple purposes of tax-supported public schools.
    The current attention given to academic achievement in the United States and a changing labor market disregard the historic and continuing popular wish for U.S. public schools to do more than raise test scores and prepare future workers. Requiring everyone to pay taxes to support schools regardless of whether they have children and compelling families to send their sons and daughters to school means that larger public purposes have to be met. Children need to be socialized to accept community standards, especially at a time when most parents have full-time jobs. Moreover, schools are expected to strengthen common moral values, promote civic engagement and offer equal opportunities.

A recent public opinion poll by Phi Delta Kappa illustrates the rich array of collective and individual purposes that parents and taxpayers expect schools to achieve. In order of importance, the top five in the poll were: prepare people to become responsible citizens; help people become economically sufficient; ensure a basic level of quality among schools; promote cultural unity; and improve social conditions for people.

These multiple purposes frustrate business-minded reformers who want parents and children to be satisfied customers, just as pleased with their choice of schools as those who pick out certain cars or breakfast cereals or other commercial products. Yet the "customer" analogy breaks down quickly when the above public purposes are noted.

Few current voucher plans, public charter schools or for-profits, for example, either acknowledge these multiple and often contradictory purposes or are held responsible for achieving them. Advocates of privatization and boosters of the customer language seldom note in public debates this profound difference between the many purposes of public schools and the single-minded pursuit of profit among private-sector firms.

Yet parents and taxpayers count on elected officials to heed these diverse aims in their schools. If some of these purposes are ignored — say, too much drug use among youth — civic leaders will call upon the board of education and superintendent publicly to pay attention since it is their responsibility to do so.

While business firms surely entertain multiple goals, what tends to dominate company agendas are private rather than public purposes, such as increasing total revenues, net profits, dividends to investors and other bottom-line outcomes. Surely, for many businesses, customer and employee satisfaction, staff capabilities and community relations are important results, yet these and similar outcomes are means toward the end of higher net profits.

Private-sector companies seldom mention cultivating literacy and civic engagement, enhancing individual well being and reducing economic and social inequalities as their purposes. And the reason is simple enough — they are public aims that are meant to enhance the collective good, not individual private interests. Different aims also mirror different decision-making processes between schools and businesses.

Public Decisions

  • Democratic deliberations of policies and practices.
    Beginning in 2000, stories emerged from multi-billion dollar U.S. corporate offices that CEOs fiddled with earnings reports in order to keep investors happy and stock prices high. Earnings statements (and forecasts) as signs of corporate success — 15 percent a year growth, for example — had pressured corporate officers to claim as earnings funds that had little to do with actual transactions with customers in a given year.


Xerox executives claimed revenues in one year that their customers actually were paying them over three years. In some cases, the chicanery was so blatant that CEOs were indicted, tried by juries and sent to prison. The collapse of major corporations destroyed investments, jobs and employees’ lives. In effect, corporate leaders were unaccountable to their investors, employees, and the larger public.

I offer examples of corporate malfeasance to illustrate a major difference in decision making between U.S. businesses and public schools. Deceit and fraud are harder to cover up when elected school boards are obliged by law to consider, debate and make decisions in public. Of equal importance, school board decisions are subject to media and public scrutiny. Not so in the private sector where corporate leaders are often appointed by self-perpetuating boards of directors who make decisions behind closed doors without public hearings or journalists in attendance.

Were corporate discussions to be opened to investors and the larger public, some of the basic differences between public and private might diminish. How serious U.S. legislators are in pursuing openness in the private sector only time will tell. Public deliberation of policies is a profound difference between schools and businesses. Ditto for determining success.

  • Determining school success.
    With the multiple purposes that tax-supported public schools are expected to achieve and the variety of customers of public schools, one would expect multiple criteria for determining whether schools are successful. Not so in this country over the past three decades when business and civic leaders have stressed rigorous curriculum standards, tests to measure whether those standards were being met satisfactorily and rewards or penalties for performance. Concentrating on test scores as a single measure of success — in effect, copying the bottom line of profit-making companies — represents a rather cramped criterion.

Few proponents of such ideas ever examine the chain of logic behind these policies. Did, for example, state-mandated curriculum standards get implemented in classrooms as intended? If they were implemented, did the standards influence teaching practices, and did those specific practices shape what students learned as measured by the state tests?

The first causal linkage requires evidence that state policies were fully put into practice and actually did shape what teachers did in classrooms. Changed instructional practices need to produce desired outcomes. Even here, were there test score gains they would require close scrutiny to determine whether classroom experiences did indeed contribute to student achievement over a specific period of time, controlling for prior test performance and socioeconomic status of students. So far, there is insufficient evidence for these linkages to satisfy even champions of these ideas.

Advocates of business-inspired practices also ought to be reminded of the many purposes of public schools, the service orientation of the institution and the varied cultures that inhabit schools. These factors make single, quantifiable measures of success dubious. I also would ask whether test scores do indeed measure current and future success. Many researchers and parents have raised questions about whether scoring high on tests does predict a student’s future success in college, on the job or in life itself.

Finally, advocates of business practices may not be aware of the difficulties of measuring success in multi-purpose public institutions — something not confined to public schools. The late management expert Peter Drucker raises the same issue in determining whether universities are successful. He asks which of the following are measures of "doing a good job:” The salaries of students 20 years after graduation? The reputation of the faculty? The number of Ph.D.s? "Each yardstick," Drucker points out, "[is] a value judgment regarding the purpose of the university — and a very narrow one at that.”

Ready Responses
The profound differences in purposes, democratic decision making and accountability for outcomes between businesses and schools mean the basic assumption of corporate-inspired reformers — that schools and businesses are fundamentally alike — is deeply flawed. In laying out the defects in this assumption, I also have drawn the limits of business influence in applying private-sector principles to schools and the entire logic embedded in policymakers' plans for reform. In doing so, I have questioned current school improvement policies.

This is why it is crucial that U.S. policymakers, practitioners, researchers, parents and taxpayers know clearly in what respects schools and businesses are alike and in what ways they differ. And the reason is simple enough: Business-inspired reform will not go away. We cannot depend upon personal epiphanies that converted CEO Jamie Vollmer into a supporter of schools spreading to all CEOs.

When business-minded policy proposals arise again — and they will — their assumptions, logic and evidence have to be dissected carefully and arrayed against the many purposes that tax-supported public schools serve, the democratic deliberations that the proposals will receive and the measures that will determine success.

Larry Cuban is a professor emeritus at Stanford University, School of Education, 304 Cubberley, Stanford, CA 94305. E-mail: cuban@stanford.edu