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EMO Approaches

             EMOs take varying approaches in how they choose to enter the education market.  Many EMOs are service providers to schools (lunch, curriculum, after school programs, professional development) who have contracts to provide only these specific services (Levin 2001).  However, the EMOs we are focusing on in this paper are those that are managing schools.  The two models of school management are contract schools and charter schools.  Contract schools are those where a school district has contracted a private company to run the operations of the school, while the district maintains control over the staff, facilities, and educational requirements.  The other more common approach is in the charter sector.  In this model a board secures a charter from the state, which each have different authorizing methods, and then the charter holders contract an EMO to facilitate the start-up and operations of their school (Levin, 2002).  In the majority of states, private management companies are not allowed to hold charters; Arizona is currently the only exception (Molnar, et. al, 2009).  According to a study of for-profit EMOs by Arizona State University (2009) 94% of EMOs are managing charter schools while 6% are district schools. 

Underlying Social Problems

            Education management organizations have tried to address the problems of low student achievement and lack of adequate school choice while operating to make a profit.  Business knowledge of management was intended to cut wastes and lead to innovation in education.  Through competition both EMOs and traditional public schools but would force to improve or loose their share of the market. This movement coincided with the creation of charter schools, which operate under the same principles of innovation, competition, and choice.  

Efficacy of Approach

            According to Levin (2002) there are two criteria that should be used to measure the effectiveness of for profit EMOs; first, are they profitable and second, have they improved outcomes in their schools while leading to improvement in competing schools.  The research on educational management organizations is limited and varies in quality.  There haven’t been many independent studies.  Also, the very nature of EMOs and charter schools makes them difficult to conduct comprehensive studies as each state varies.

            The final review of efficacy of EMOs requires an examination of their ability to make profits.  Initially some EMOs were publically traded companies.  Edison, the largest and most widely followed EMO, reported losses which according to Levin (2001) where approximately $600 million.  They, like all other EMOs today are now private companies.  Because they are private we know very little about their profitability.