, professor, Kharkiv, Pushinska, 77

In heading

Economic analysis of law;

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Issues number

2018 - № 2 (33)



Type of articles

Scientific article

Code UDK


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Problem setting. In Ukraine, lawmakers discuss a conception of reformation of economic activity in the sphere of higher education, ways of financial recovery and transition to a corporate model of managing universities. Nevertheless, the legislature does not determine the meaning and criteria of a concept “corporatized university”. There are also no clear understanding the sense and implications of a corporatization process. Simultaneously, scientists from those countries, where an idea of corporatization had been put into practice, have already formed their attitude to it.
Recent research and publication analysis. Scientific papers of M. Berg & B. K. Seeber, J. Brownlee, N. Chomsky, A. Dreger, B. Ginsberg, M. Hiltzik, B. J. King, Z. Reznik, B. Grill & L. Marzillier, S. J. Rosow, A. Ross, D. L. Scott, Ch. Smith, H. Steck, G. Tuchman, J. Washburn, J. Westheimer and K. Yamamoto are the most thorough publications on matters of corporatization of public universities. Entrepreneurial universities in the USA are a finished model of corporatization of universities.
Paper objective. The article objective is to generalize positions of foreign scientists regarding the necessity of corporatization in the sphere of higher education, peculiarities of undertaking a corporatization reform and consequences in their countries.
Paper main body. Becoming corporations, universities implement corporate methods of management as an alternative to privatization. Nevertheless, the change of a financial model and mechanisms of managing universities in the short and long terms has positive as well as negative consequences.
Contradictory aspects of corporatization encompass:
firstly, strengthening the role of private financing for universities. Private financing as an important source of funds causes resource dependence of a university on private business. Problems arise when business corporations begin to purchase results of scientific research, to use researchers to their advantage and to control their work;
secondly, the change of the lecturer’s status. Corporatized universities encourage those lecturers, who involve in universities solvent students by any means, mobilize financial support in the form of grants or funds of private donors, obtain prestigious awards, have publications in acknowledged international journals, etc. These facts show that scientific outcomes of scientists as well as the very universities are acknowledged by a society. However, executives of corporatized universities are interested in funding a university’s budget rather than in researchers being able to produce new knowledge;
thirdly, changes in managing universities: downsizing collegial self-governance; the increase of a level of management bureaucratization and the role of professional executives; strengthening disciplinary pressure and enhancing labor intensity of lecturers;
fourthly, transformation of higher education from a mostly public good into a mostly private good. Corporatization of universities consists in the change of nature, a mission, functions, culture of universities and approaches to holding lectures and doing scientific research. A public university becomes a business organization. The author does not exclude an opportunity of privatization (turning into a joint-stock company) of corporatized universities.
Conclusion of the research. The executives should examine and take into account experience of foreign universities in the process of implementation of a new model of economic activity at Ukrainian universities. It is important to benefit from all the advantages of market transformation of a university’s economic system.
Short Abstract for an article
Abstract. The author has generalized scientific approaches of foreign scholars to defining a process of university corporatization. The author indicates positive and negative consequences of the corporatization. The author draws especial attention to effects of the corporatization such as strengthening resource dependence on sources of private financing, implementation of corporate management at universities, transformation of higher education from a mostly public good into a mostly private good and prospects of privatization (turning into a joint-stock company) of universities.


higher education, university, corporation, corporatization


External reviewer

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