The Case for Unfair Competition
Captive operations like in-plants support their parent organizations’ missions, bringing better flexibility and control. For this reason, insists one university administrator, the competition should be unfair.
Limited Flexibility of Funding and Cost Control. The SDAE is at a serious disadvantage when it comes to earning revenues and controlling costs. If it belongs to a tax-supported institution, it may enjoy the advantage of some measure of subsidy. Accordingly, it must be very careful about how low its prices can go. If it cuts its prices too deeply, market competitors may cry "foul," accusing it of using its subsidized situation to run them out of business. It must therefore sometimes keep its prices artificially high to avoid this criticism. On the cost side, paid leave and fringe benefits represent another area of cost disadvantage, since the leave and benefits programs offered by most institutions are fairly generous.
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