Innovation in Educational Markets: An Organizational Analysis of Private Schools in Toronto

Article excerpt

This study examines whether new private schools are innovative, drawing on theories of markets and institutions. Choice advocates claim that markets spark innovation, while institutional theory suggests that isomorphic forces will limit novel school forms. Using qualitative data from third sector private schools in Toronto, three hypotheses about the impact of markets on educational organizations are examined: (a) they reverse tendencies toward isomorphism as schools develop client niches; (b) they allow schools to weaken their formal structures; and (c) they force schools to more closely monitor their effectiveness. Substantial evidence exists for the first hypothesis, partial evidence for the second hypothesis, but little evidence for the third. Overall, new private schools are characterized by: small classes, unique pedagogical themes, personalized treatment of clients, and some pragmatic responses to limited resources. Their operators sometimes feel restricted by parental demand, but are able to retain a loosely coupled structure by embracing consumerist understandings of accountability. This essay concludes with a discussion of implications for market theory.


This study offers an organizational analysis of third sector private schools in Toronto, Ontario, Canada. Third sector schools are private schools that are neither religious nor elite. Private schools have long served religious and elite communities in Canada, but they are becoming increasingly differentiated. One in five Ontario private school students attends third sector schools. These schools are typically small, with enrollments of less than 50, and are located in humble locales, such as office buildings, old houses, or shopping plazas. They distinguish themselves with specialized pedagogy that attracts clients who do not seek prestigious name-brand education or religious orientations.

Do markets encourage schools to be innovative? Today, many market advocates decry the paucity of invention in public schools and celebrate the entrepreneurial dynamism of the private sector. Yet, such claims are rarely empirically grounded and often ignore the diversity of private schools. Established elite schools, as an example, embrace longstanding school forms and derive their prestige on the basis of tradition, not innovation. Likewise, religious private schools have historically mimicked mainstream public schools in order to secure legitimacy (Baker, 1992). Private schools are most likely to be innovative in relatively new markets. In the United States, charter schools would meet this requirement. However, in Ontario, where there is no charter school legislation, third sector private schools best exemplify such a market.

This sector offers a strategic vantage point for studying educational markets. While elite schools conform to historic images of patrician education, and while religious schools mix standard school forms with the doctrines of their respective communities, third sector schools are free to build their own identity and mandate. Lacking an established legacy, they are arguably the most likely to embrace innovations. Attracting parents who seek neither religion nor entree into elite networks, these schools may be motivated to embrace novel pedagogies. Moreover, they are closer to the market than are charter schools or magnet schools, since they are not organized through a public bureaucracy. Needing to comply only with bare-boned health and safety and curricular guidelines and the most minimal of inspections, these schools can innovate as they choose. Bound by few regulations, they represent a purer expression of market forces than do charter, voucher, or magnet schools.


Advocates of educational markets claim that private schools are more innovative and responsive than are public schools (Chubb & Moe, 1990; Clinchy, 2000; Hepburn, 2001; Lawton, 1995). …