Most department heads/chairs are fair. That's something I'll just spot for the sake of agreement.
Some are not. When it comes to dealing with course approvals and appointments and class schedules, chairs are in a position to reward friends and treat less well those they find objectionable, pains in the ass, or the invisibles. The problem is, especially for the untenured, no one would file a complaint, for obvious reasons. Deans often don't know of the crap that goes on, or if they do, there is blessed little they can do about it.
In distance ed, there often is an opportunity to get around this. I'll tell you what goes on at my school. In some departments, DE classes are prized, with many faculty members -- frequently adjuncts -- ignored while favorites are awarded online classes and training. They skip the line, as it were.
There is a contractual body here that has instituted a policy for course development (the development of a course which has not yet appeared in the online course schedule) and course assignments (courses that have already been approved for online offering). We require for ALL course development and assignments, that the entire department agrees and signs off. That way we have a record that the chair has actually consulted her faculty regarding the opportunity to teach online and reveals who is looking to teach them. There is an added level of formal red tape here, for chairs and faculty (no faculty member has to seek such forms, signed off on by other faculty members and deans, for requesting to teach a section of a course). Many faculty members don't like the idea of "requesting permission" from a body for teaching something that she is perfectly qualified to teach.
So the trade off is added bureaucratic processes (and therefore asymmetrical treatment of online and trad courses) for DE course assignment, and greater transparency at the level of departmental chair.
There are a number of fair objections. Already mentioned is that faculty members resent having to go through a non-departmental body to sign off on something that ought to be strictly a departmental issue. Second is that we are treating trad and DE classes differently when the whole point of integrating DE courses into the college's offerings is to treat them as academically equivalent. In the ideal world, the processes ought to be equivalent.
Justice demands that we treat similars similarly, and when treatment is different, it ought to be justified on the basis of relevant criteria. What are they in this case? Nothing (save for a slightly elevated degree of abuse in cases of distribution of of desirable DE offerings across faculty).
There's a lot here.
I'll start with a philosophical objection. The argument from 'justice' in scheduling assumes that distributive justice among faculty members is the important goal. To me, that's a second-order goal. The first-order goal is meeting student needs. Faculty convenience is fine, but student needs come first. If students need more classes at 'inconvenient' times and fewer at 'plum' times, then so be it. The issue of fairness among faculty has to be bounded by student needs.
Now to the practical stuff.
Without giving away too much, I'll say that I've seen both the integrated and the separated approach to scheduling online classes. In the integrated approach, online classes are scheduled by the same people who schedule regular classes. In the separated approach, there's a czar of online (or a committee, but the function is the same) who schedules online classes across the college.
In my observation, the former model offers consistency within a department, and the latter offers consistency between departments. Which is more important probably depends on local conditions.
Even your example could be read two ways. If the local chair is fair and wise, then outsourcing the distance ed decisions is a terrible idea. Alternately, if the local chair is an abusive jerk, then outsourcing the distance ed decisions at least offers the potential for some island of fairness.
In the separated model, part of the argument is usually from quality control. If many of the faculty were hired before distance learning meant much, then the automatic assumption of competence that applies to the classroom might not apply to distance. (I have a few faculty who have never used email.) If the distance ed czar is fairly competent in distance learning, which I'd certainly hope would be the case, then there's a reasonable chance of ensuring that the technology is used well. If the department chair isn't technically literate, s/he might not be able to evaluate a distance ed class.
There's also a non-trivial argument from scheduling coherence. If each department adds online sections as afterthoughts, or mostly according to faculty preference, then the all-online (or mostly-online) students may not be able to get the distribution of courses that they need. Having someone in charge of all online scheduling means that it will be somebody's job to notice that, say, you have an imbalance between English and Psych. That's particularly true given that some departments will have an unusually high percentage of gearheads, and others will be predominantly Luddite. Left decentralized, those imbalances will fall entirely on the students. An online czar can call attention to that, and direct resources where students most need them to go.
(I grant, of course, that an online czar is subject to the same human failings as anybody else. This argument is structural.)
The argument from the integrated model is basically that online courses are the same as any others, and should be treated the same way. This may or may not be true on a given campus, though. Even if the same course number, credits, and content apply, online courses may have been marketed to an entirely different group of students. When that's true, then the scheduling needs may not parallel the scheduling needs of onsite students. To the extent that online students are a distinct cohort, as opposed to onsite students picking up sections here and there to build more convenient schedules, there's an argument for extra-departmental scheduling.
The separated model also gets around the problem of nullification. Most degree programs include distribution requirements from various parts of the curriculum -- some humanities, some math, some lab science, etc. In a department-centric model, a single department that doesn't want to be bothered with online courses could tank entire curricula. From the perspective of both student and institutional needs, that's insane.
My sense of it is that the separated model makes the most sense during the early rapid-growth phase, when historical patterns haven't emerged yet and the need for coordination (and targeted development, and faculty development) is greatest. As online courses become more a part of the scenery, and patterns emerge, it would make sense to return the courses to the same routines used for other courses. Depending on where your campus is in its development cycle, either model might make sense.
I'm not entirely sure I answered your question, but I hope that helps. Wise and worldly readers, what do you think?
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