The transformation that universities in the Kingdom of Saudi Arabia and elsewhere are undergoing, from a traditional government bureaucratic model to a model inspired by market mechanisms and business management tools, represents an important strategic turning point. In principle, this transformation aims to enhance efficiency, increase flexibility, and improve responsiveness to the demands of the economy and society. However, practical implementation reveals a fundamental paradox: a partial application of market logic without fulfilling its institutional requirements, which has resulted in a state of confusion in the institutional identity of universities.

The private sector, by its nature, is based on maximizing benefit through competition, reducing costs, and maximizing returns, relying on a precise understanding of the market and building close partnerships with its key players—customers, suppliers, and research and development centers. However, despite their apparent adoption of some tools of this model, universities still suffer from weak actual connection to the market in its industrial and commercial aspects. Participatory relationships with major companies are limited, and integration with government agencies in applied consulting fields remains below the required level, reflecting a clear gap between educational and research outputs on one hand and real-world needs on the other. Thus, universities often remain a semi-closed organizational entity, performing with bureaucratic procedural efficiency but lacking developmental effectiveness.

However, the deeper problem concerns the institutional nature of universities themselves. They are not merely organizations for producing educational services, but social institutions with a civilizational role that goes beyond direct economic benefit; they contribute to knowledge production, value formation, and reshaping societal consciousness. In the context of developing countries, the importance of this role is magnified as a pillar of comprehensive development. Therefore, reducing decision-making in the university to the criterion of cost and financial return without adequate consideration of the academic, cultural, and social dimension disrupts its functional balance and leads to a decline in the quality of educational and research performance and community service.

This imbalance is clearly evident in policies related to the cancellation of some colleges and academic programs by direct administrative decisions, instead of subjecting them to a flexible competitive logic that allows them to adapt and reposition. These programs could have moved towards integration, transformation into applied institutes and supporting specializations, or specialized research centers, or been redesigned to suit market needs.

However, the narrow view of some specializations has contributed to reducing their roles, as is the case with geography, which is essentially the science of place, and its applications extend to multiple strategic fields including urban planning, supply chains, marketing, transportation, public health, and even military applications through geographic information systems. The same applies to the Arabic language specialization, which should not be viewed as a traditional knowledge field with limited impact, but as a strategic component intersecting with the culture and media sector—a vital sector directly linked to national identity, content creation, enhancing soft power, and building the state's cultural narrative domestically and abroad.

From a deeper analytical perspective, the crisis of institutional identity cannot be understood in isolation from the weak activation of institutional governance as a central mechanism for decision-making within the university. Governance does not merely mean organizational structures or procedural regulations; it represents an integrated system that regulates the relationship between authority and responsibility, defines the roles of university councils, colleges, and departments, and ensures transparency, accountability, and active participation in decision-making. Therefore, weak institutionalization of governance leads to excessive centralization in strategic decisions, such as canceling academic programs or restructuring them, without adequate involvement of academic and specialized expertise, resulting in decisions that may be procedurally efficient but limited in effectiveness, quality, and sustainability.

Accordingly, developing decision-making in universities requires a transition from the 'central administrative' decision model to a 'decentralized governance' model, based on evidence, institutional analysis, multi-stakeholder participation, and values of transparency and accountability. This includes activating boards of trustees and specialized academic committees, enhancing the independence of academic departments by granting them administrative and financial powers within a clear accountability framework, and linking strategic decisions to measurable performance indicators and outputs. Decentralized governance also represents the bridge through which market logic and the requirements of the academic mission can be reconciled, without prioritizing one over the other.

From another perspective, the excessive focus on cost reduction, without considering the variation in programs' ability to generate value—whether economic or knowledge-based—leads to counterproductive results. It is neither logical nor administratively sound to treat all programs as similar cost units, while some have a higher capacity for attraction, innovation, and generating returns. Hence, the need arises to shift from the 'cost center' model to a 'value or profit center' model, which enhances incentives and supports academic excellence for programs and departments.

At the organizational level, there is an urgent need to rebuild the institutional culture within universities. Business management tools cannot be adopted selectively; the success of this model requires integrated application. This is based on formulating a clear strategy that emerges from a broad institutional dialogue involving all academic and administrative levels, and allows discussion of substantive issues without restrictions. Involving real stakeholders—faculty members, academic leaders, students, and the public and private sectors—should not be superficial but substantive, ensuring decision quality and enhancing commitment to implementation.

Once a strategy with institutional acceptance is in place, it becomes necessary to build an integrated performance management system, including planning, monitoring, evaluation, feedback, incentives, and development, directly linked to the university’s strategic objectives. Thus, the university's core functions—teaching, research, consulting, and community service—are integrated within a unified framework. The problem often lies not in formulating strategies, but in their implementation, which requires strengthening what is known as organizational citizenship (organizational belonging and loyalty), especially in an academic environment that relies heavily on the professional and ethical maturity of its members.