U. faces struggle to defgine its future

With an uncertain future, Penn reexamines its methodology and values. In 1755, College of Philadelphia founder Benjamin Franklin did not mince words in his mission statement: "Learn everything that is useful and everything that is ornamental." If Franklin could have seen 2 1/2 centuries into the future, he might have included learning corporate management in the mission statement for the school that later became the University of Pennsylvania. These days, schools across the country are considering outsourcing and retail enhancements to keep costs manageable while improving service and efficiency. But nearly three years into Penn's own restructuring program, numerous cost-cutting measures and retail ventures have led some Penn faculty members, students and staff to question whether the handling of University finances contradict Penn's academic mission. When University President Judith Rodin announced her University-wide, five-year plan in the fall of 1995 -- 1 1/2 years after she took office -- issues including intense competition for applicants, a surrounding neighborhood in decline and a modest endowment were crowding her plate. The first section of Rodin's mission statement -- released with the Agenda for Excellence -- is faithful to Franklin's original vision of a challenging University curriculum nurtured by an extraordinary faculty. But the statement also invokes a slew of terms foreign to Franklin's 18th-century environment, such as diversity, positive community connections and alumni support. Rodin's plan draws on these themes while highlighting specific goals for the University. Significantly, however, the third goal of the agenda calls for Penn to "manage its human, financial and physical resources effectively and efficiently to achieve strategic goals," and serves to justify administrative restructuring. Improving Efficiency The plan's call for change followed a January 1995 report by John Fry, then a consultant at the Big Six accounting firm Coopers and Lybrand. In the report, Fry -- hired a few months later as Penn's executive vice president -- recommended that Penn undergo extensive restructuring. In accordance with the agenda's priorities, Penn recently signed an agreement to outsource management of most buildings to Trammell Crow Co. in an attempt to boost efficiency, a deal unprecedented in higher education. And if the Internal Revenue Service issues its stamp of approval on the deal, Penn will reap $26 million in payments from the Dallas-based real estate services company within months. In turn, the University will pay Trammell Crow $5.25 million per year to manage about 10 million square feet of its building space. The fate of Dining Services will also be finalized later this month, as administrators complete the process of deciding whether to outsource dining facilities to one of two competing companies or keep them under Penn management. Administrators stress that outsourcing certain departments is consistent with Penn's mission as it will streamline operations and improve overall organization. "We will continue to [consider outsourcing], not because we are going to outsource everything, but because we believe that unless we ask that question, we are clearly not doing the students and faculty a service," Fry said last spring. He did not return repeated calls for comment on this article. Penn aims to reduce the cost of central and school administration by $50 million over the next five years, reinvesting the savings in strategic priorities. Academic Connection But how do members of the University community reconcile the potential conflict between outsourcing, a practice hailed as the "management fad of the '90s" and a university's commitment to education? A successful educational institution is not just about classes and professors anymore, some say. "Higher education is incredibly diverse," Sociology Department Graduate Chairperson Jerry Jacobs said. He added that Penn is faced with a particular set of challenges as the largest private employer in Philadelphia. Rodin echoed that sentiment, noting that Penn must work creatively with its $2.5 billion endowment, which ranks among the lowest in the Ivy League on a per-student basis. "This University does more with less compared to our peers," Rodin said. "In some ways, all we're doing is catching up." In an effort to revitalize a "dead after 5 p.m." merchant community and lure more activity to the heart of campus, Rodin has initiated several retail projects. Scaffolds and cranes currently adorn the $73 million Sansom Common retail complex, which, when fully completed next year, will house six retail shops, a 256-room luxury hotel and a spacious new bookstore on the 3600 block of Walnut Street. And within two years, the $69 million Perelman Quadrangle project will yield a new student center by linking and renovating Houston Hall and several surrounding buildings. Jacobs said it is "perfectly legitimate" for a University to look to its neighborhood as an asset in recruiting prospective students and businesses. Since Penn is not situated in a typical "college town," such as Penn State's State College or the University of Indiana's Bloomington -- it must pay more attention to the surrounding area, Jacobs added. And according to University Museum Director Jeremy Sabloff, it is easy to maintain the right balance between university and financial interests with "vigilant" faculty members acting as watchdogs. He said he believes that Fry and his colleagues have "academic interests at heart." Too 'Corporate'? But some employees still fear the University community is becoming excessively corporatized. "We are working within the framework of a university moving more toward a traditional capitalist corporation," said Jim Gray, a Van Pelt employee and tri-chairperson of the African-American Association of faculty and staff members. "[These projects] don't enhance the quality of academic life." Rodin disagreed, noting that revenues from capital projects are immediately fed into academics. "The University's responsibility is to marshal its resources and use them effectively for education and research," she said. She cited the University of Michigan, the University of California at Berkeley and Harvard University as exemplifying a trend in community improvements through retail. A large bookstore and other retail establishments draw more merchants to the area and benefit both storeowners and students while enlivening the "campus core" Rodin added. But according to librarian and A-3 Assembly Representative John Hogan, Penn is "tearing" down the community rather than building it up. He added that Harvard's bookstore, the Coop, is nestled among a number of independent booksellers, whereas the University community will have "one giant [bookseller] and two family-owned businesses" this fall -- the latter unable to compete. But Interim Provost Michael Wachter described University life as a "rich, multicultural existence," and that financial interests and academic pursuits "operate on separate tracks." And according to Rodin, Franklin's ideals are still an integral part of the University's mission. "We just have to be smarter, more effective and more creative than ever before," she said.