You can't run a university like a business, unless the business is a largish partnership, because the lines of authority that might work in the roundhouse or melt shop become blurred as faculties coalesce into colleges and colleges combine to form universities.

They're learning this the hard way at Massachusetts - Dartmouth (on the south coast, not far from once stood some excellent beachfront roller coasters.)
The University of Massachusetts at Dartmouth’s American Federation of Teachers-affiliated faculty union is fighting an administrative attempt to remove department chairs from the bargaining unit. “It should not go unnoticed that by removing the 39 department chairs from the Faculty Federation, the federation is weakened and a new department chairs unit would be a very weak unit lacking significant influence,” Catharine Curran, union president and chair of management and marketing, said in a statement this week, issued in response to the university’s petition to a state labor board seeking the removal of chairs and library division heads from the faculty union.

Mohammad Karim, provost, argued to the board that chairs and library division heads are “incontestably supervisors” who do not belong in the same bargaining units with those “rank and file faculty and librarians whom they supervise” and evaluate. “Their continued inclusion in the faculty union creates virtually insuperable barriers to the university’s ability to realize its full potential as a nationally recognized doctoral research university,” he said, according to legal documents.

Karim and Robert E. Johnson, campus chancellor, said in a campus memo Monday that the university recently tried to engage chairs and library division heads in negotiations about such issues as decreased teaching load and increased stipends, in “recognition of the differences in working conditions and potential conflicts with the faculty within their department.” But the chairs did not want to form a new bargaining unit, they said. A university spokesperson said removal of chairs from the unit would bring the Dartmouth campus in line with two other UMass campuses, Boston and Amherst. The Dartmouth campus's administration has stressed that it is not seeking to strip chairs of their right to unionize outright, just their position within the general faculty union.
Sounds like somebody attempted to write a different sort of union contract for Dartmouth. The one I remember from nearly forty years ago at Wayne State clearly established department heads and deans as part of management.  That formulation broke with a tradition, which I refer to as the Joshua Lawrence Chamberlain model, in which department heads, deans, and college presidents took turns serving as officers, then returning to faculty.  (That model did require a rough equality of condition among faculty members in order that no faction could seize control in a bad way, something that increasing administrative scut-work or increasing competition for research prestige probably wrecked.)  It might be that Dartmouth wanted to preserve the idea that department heads were of the faculty, and to the faculty they would return, although in an era where Cardinal Archbishops hold their positions for life, perhaps that is a lost cause.

It might be that the contract, a relatively old one, is a survival of that era.
Curran said that the faculty union at Dartmouth is 50 years old and that chairs, who teach two courses per semester and do other faculty work, always have been part of it. The university’s move is therefore a clear “attempt to gain more control over the faculty, to limit accountability for administrative decision making and justify the existence of a cadre of very highly paid administrators.” The chairs “are some of the most influential, and often outspoken, faculty on campus,” she said. “This legal action cannot be viewed as anything other than an action to chill the faculty voice and faculty influence, and to weaken the Faculty Federation.”
That is, department heads might be acting with the interests of their departments at heart, which is not necessarily what the administrative cadre wants.  I wonder if there is a large enough tenure-line faculty at Dartmouth to stand up for traditional faculty responsibilities and rights.

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