Business School Leaders Discuss How Schools Can Recover from Losses

The financial crisis of 2007–2009 has contributed to the failure of businesses worldwide—with a decline in consumer wealth that is estimated to be trillions of dollars. While some are trying to point fingers to its cause (one being the possible misguidance of business schools), most are now focused on determining how we can simply move forward.

For those in management education, the past 13–months have not been easy. Evidence of this was presented at the AACSB Deans Conference in February 2009, where participants discussed the challenges facing their business schools. Viewed as an important exchange amongst leaders in management education, the discussion was published in the April/May 2009 issue of eNEWSLINE. In response to the overwhelming feedback, and in an effort to address the ongoing challenges facing business schools, AACSB initiated a second discussion at the Continuous Improvement Conference in September. Moderated by Rich Sorensen, dean of the Pamplin College of Business at Virginia Tech, Karyl B. Leggio, dean of the Sellinger School of Business and Management at Loyola University Maryland, and Jorge Haddock, dean of the School of Management at George Mason University, the discussion addressed how business school leaders could better respond to the challenges brought about by the economic environment.

Through the use of an audience response system that collected real-time data, attendees became active participants in the discussion. Separated into groups, attendees were asked to answer a series of questions relevant to the current challenges they are facing. Their responses were segmented by topic and the results were as follows:

Coping with Change

When asked what resources business schools should utilize to cope with the recent economic challenges, 50% of the groups stated that business schools should welcome change as an opportunity to accomplish new goals. Six of the groups or 37% responded that business schools need to understand new technologies and resources that accompany change in order to move forward. And, 6% indicated that in order to facilitate growth, schools must anticipate change and stay informed about the options. (total responses: 16 groups)

Thinking Strategically

Participants were asked to vote on what they consider to be the most important tool for business schools to utilize when facilitating strategic thinking. Nearly half of the groups (43%) stated that when planning strategically, business schools should focus on what the school does best, 28% stated that schools must define and follow a unique mission, and 14% indicated it was important for schools to carve out special “quiet-time” for strategizing. Additionally, 7% found that most important actions to facilitate strategic thinking were to boost credit/non-credit courses that generate revenue and conserve resources by deciding what not to do. (total responses: 14 groups)

Managing Enrollment

When asked how they should best manage enrollment, 47% of the groups indicated that developing differentiated undergraduate and graduate programs was most important. Approximately one quarter of the groups indicated that business schools must reclaim the responsibility for management courses that have been taken over by non-business departments. Additionally, 18% said that determining and communicating optimal levels of enrollment for all programs was important, and 12% indicated that during difficult economic times it was critical to reduce or eliminate nonessential academic programs. (total responses: 17 groups)

Placing Graduates

When asked how to best prepare business students, 40% of the groups indicated that business schools should expand experiential learning opportunities and help students develop networking and job-search skills. A smaller percentage (20%) indicated that business schools should focus on partnering with prospective employers to create programs that suit the needs of business. (total responses: 15 groups)

Funding Programs

Participants were asked to identify how business schools can continue to fund programs with regards to raising money, reducing expenses, and re-deploying faculty. The survey results for each were as follows:

Raising Money

Almost half of the groups (47%) indicated that they have expanded their development and fundraising activities to support the funding of programs, while others (27%) reported that they have expanded the credit and noncredit programs that have historically generated surplus revenue. And, 13% indicated that they are seeking more collaborative grants and contracts. Additionally, 7% suggested that seeking government funding or increasing tuition for out-of-state residents were two options for gathering program support. (total responses: 15 groups)

Reducing Expenses

When asked how to reduce expenses, 40% of the groups indicated that schools must eliminate inefficient policies and practices, and 20% preferred increasing class sizes. A smaller portion (13%) suggested that schools should restrict student enrollment and reduce doctoral program enrollment; as well as eliminate some administrative units and programs. Similarly, 7% proposed to lower operating budgets or reduce course offerings for non-business programs. (total responses: 15 groups)

Re-Deploying Faculty

When considering the re-deployment of faculty, 46% of the groups indicated that the best option for business schools was to hire new faculty only to fill critical needs and to not fill any other positions, whereas 23% suggested that schools would be best to provide early retirement incentives to faculty as a first step to re-deployment. 15% encouraged schools to consider reducing faculty loads for teaching and research and/or to consider alternative solutions (e.g. aberration of tenure, furloughs, reduce salaries, eliminate positions, etc.). (total responses: 13 groups)

Fund Raising

When asked how schools are approaching their fundraising responsibilities during these times, 43% of the groups responded that in order to improve fundraising capabilities, schools must begin to link special requests to specific outcomes—particularly with regards to future accomplishments. Three options were provided, including welcoming smaller gifts, focusing on deferred and future gifts (such as bequests, trusts, charitable trusts, and property), and approaching corporations or high net-worth individuals that have been less effected by the recession. All three received 14% each. Similarly, 7% identified that the priority for fundraising for business schools is to make all stakeholders aware of funding needs, as well as to be sensitive to donors’ situations. (total responses: 14 groups)

Attracting and Retaining Faculty

When asked what their schools were doing to attract and retain talent, an overwhelming 67% of the groups indicated that now, more than ever, it is important to create a favorable work environment that is supportive of faculty productivity. Additionally, 17% indicated that now is a good time to hire graduates from academically and professionally qualifying bridge programs, and 8% indicated that they are either using chaired professorships to retrain and attract highly qualified faculty or they are hiring and training faculty who can teach interdisciplinary courses. (total responses: 12 groups)

Maintaining Teaching Relevance

Critics claim that business degree programs are becoming too generic. As a result, they have begun to ask some tough questions. Are business schools still relevant? Are students being taught to think critically? Are students actively participating in the teaching/learning process?

To respond to these criticisms, 31% of the groups indicated that business schools should offer experiential learning opportunities, expose students to topics such as business ethics and social responsibility, and further develop critical thinking skills. At a close second, 23% of the groups felt that it is important for business schools to develop partnerships with local firms to stay in touch with what businesses need. And, 15% agreed that schools must strengthen their interdisciplinary teaching methods. Finally, 8% felt that it was important for schools to encourage faculty to expand their research into relevant emerging fields; to supplement textbooks with resources that include current events in politics, business, and the economy; and to alter learning objectives to reflect changes in the curriculum. (total responses: 13 groups)

Maintaining Research Relevance

When asked how business schools should maintain both the relevance and importance of research, exactly half of the groups indicated that it was important for schools to help faculty develop new research paradigms—particularly in interdisciplinary topics of inquiry. Approximately 33% reported that schools must interact more frequently with business and government to identify evolving issues, and 17% suggested that all disciplines must view current conditions as opportunities to explore new types and methods of research. (total responses: 12 groups)