business school accreditation, quality, and global ... - Humane

BUSINESS SCHOOL ACCREDITATION, QUALITY, AND GLOBAL COMPETITIVENESS ULRICH HOMMEL, EFMD/EFMD GLOBAL NETWORK

HUMANE Seminar Toulouse / 25 September 2015

THE BUSINESS SCHOOL SECTOR

Institutional Forms •  Faculties of Business / Management / Social Science vs. Schools of Business / Management •  University-Based vs. Stand Alone •  Public vs. Private Non-Profit (Foundation Owned) vs. Private ForProfit (Stock Market Listed or Privately Held) Commonalities

Differentiators

•  Provision of credence good, mostly to one-time ‘buyers’ •  Academic, peer-reviewed research, which informs teaching •  Participation in ‘rankings game’ •  Similar curricular structure and pedagogy

•  Funding model (endowment-led, subsidy-led, tuition-led) and financial slack •  Governance (collegiate, management-led) •  Educational focus (preexperience vs. post-experience) •  Relevance of academic traditions, values and myths HOMMEL / HUMANE Seminar

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THE MODERN BUSINESS SCHOOL – A SUCCESS STORY?

•  > 13,000 business schools worldwide •  rapid demand growth in Asia, benefiting also mature markets via cross-border recruitment and offshore provision •  emergence of ‘multi-campus business schools’ with global reach •  Western business schools maintaining broad range of off-campus (collaborative) provision strategies (e.g. dual/joint degrees, franchising, validation) •  further expansion with new delivery models (MOOCS, SPOCS, blended learning formats, etc.)

HOMMEL / HUMANE Seminar

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THE MODERN BUSINESS SCHOOL – A STORY OF FAILURE?

Thomas Sattelberger Former Member of the Management Board, Deutsche Telekom/Continental/Lufthansa Former Vice President, EFMD

“LARGE BUSINESS SCHOOLS ARE LIKE THE WALKING DEAD…”

(Spiegel Online, 9 February 2012)

Richard Lyons Dean, Haas School of Business, UC Berkeley

“…CONFIDENTLY PREDICTS THE DEMISE OF BUSINESS SCHOOLS” (HALF OF THE WORLD’S BUSINESS SCHOOLS WILL BE OUT OF BUSINESS IN 5 TO 10 YEARS)

(Financial Times, 10 April 2015)


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THE BUSINESS SCHOOL – IN SEARCH OF FINANCIAL SUSTAINABILITY?

Fiscal Austerity •  Fiscal cut-backs lead to lower university budget allocations

•  …and reduce funding for university-based business schools

•  …while giving role of “cash cow” for parent university more prominence

Structural Change

Corporatization

•  Geographical shifts in demand & •  shifts of customer preferences (e.g. online provision) & •  competitive market entry (non-degree cream skimming) &

•  Rankings game and globalizations fosters push for growth

•  …leads to investment pressures and surplus squeezes

•  …while increasing quasi-fixed costs

•  …which leads to increasingly volatile revenues

•  leads to surplus squeeze


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MARKETIZATION/CORPORATIZATION OF MANAGEMENT EDUCATION •  •  •  •  •  • 

Privatization & Deregulation Competitive Market Entry (e.g. For-Profits) Demand Volatility Up Rising Student Mobility Shift to Online Learning … Revenues

•  Campus Upgrade •  eLearning Platforms •  Multi-Campus Operations •  …

Investments

Surplus/Loss

•  Fiscal Cutbacks •  Privatization •  University Tax Increases •  …

Costs •  •  •  • 

Faculty Expansion Hiring Star Researchers Development of eLearning Capabilities … HOMMEL / HUMANE Seminar

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THE ‘RANKINGS GAME’ Level 1 Accreditation (“Certifiers”)

Level 2 Ranking (“Trusters”)

Tier 1 Tier 2

Triple Crown

1.  2.  3.  4.  5.  6. 

•  Tournament-Style Competition •  Collective Prisoners’ Dilemma?

EQUIS AACSB AMBA EPAS CEEMAN …

1.  Institutional 2.  Program 3.  Open/Customized Exec Ed Ø  FT, Business Week, Eduniversal, … HOMMEL / HUMANE Seminar

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DISRUPTIVE ROLE OF TECHNOLOGICAL CHANGE

Course Offerings

Technology Platform §  §  § 

Quality Assurance

Management

The MOOC Model:

MOOC-based teaching represents team-based activity to achieve scalability. Long-Term Role: Talent Identification vs. Degree Provision? Fuzziness of Business School’s Institutional Boundaries?

The For-Profit Model: Program Managers

Course Design Faculty

Delivery Faculty HOMMEL / HUMANE Seminar

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PERFORMANCE ORIENTATION

Illustration: Academic Research §  External measurement will increasingly dominate (e.g. Web of Science) -  Indicators: Impact factors, citation indicators, collaboration statistics -  Research rankings based on personalized researcher IDs -  Internal performance review based on enriched research statistics §  Performance pressures on business school faculty will increase significantly in the years to come §  Erosion of academic tenure, rising importance of ‘offtrack profs’


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STAKEHOLDER-ORIENTATION AND IMPACT Illustration: Impact of Faculty Research §  Affordability of academic research will become an issue for many business schools -  up to 50% of faculty staff time to be funded -  requires access to subsidies or high-margin activities §  Monetization of academic research? -  production of derivative outputs (partnerships with media companies, publishing houses, etc.) -  more focus on practically relevant outputs -  feeding into corporate learning units more pro-actively §  Increasing role of research impact (e.g. UK) §  Is research in the future mainly team-based? §  Effect on open source nature of research, academic freedom


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THE INTERNATIONALLY NETWORKED BUSINESS SCHOOL •  SKEMA model: foreign campus locations for educational service delivery (satellites) •  IESE model: Full-scale business schools as affiliates •  IE model: Large number of foreign offices (>25) as facilitators for student recruiting, program delivery, etc.

•  INSEAD model: Full-scale campus operations spread around the globe

Main Campus

Satellite Campus/Local Office HOMMEL / HUMANE Seminar

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THE STRATEGICALLY NETWORKED BUSINESS SCHOOL

•  Outsourcing of key functions (recruiting, admissions, placement, marketing, etc.)

•  Shared joint ventures to build up strategic platforms


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SHAPE OF BUSINESS SCHOOL SECTOR IN THE FUTURE?

Premium Sector (ResearchBased) Premium Fringe (alliance-based, mixed research) Teaching-Focused Business Schools (also engaged in applied/industry research)

§  Greater reliance on operational revenues for financing §  Greater performance volatility (risk taking and risk management) §  Management layer in business school growing progressively §  Nature of professorial work will change fundamentally (network facilitators/ operators)


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DISRUPTION AHEAD – THE (NAÏVE) ECONOMIC INTERPRETATION? “BACK TO VOCATIONALISM” ORGANIZATIONAL DIVERSITY

§  Disappearing financial slack “STUCK IN THE MIDDLE”

“FALLEN ANGELS”

§  Tournament-style competition §  Risk management deficiencies §  Corporatization of business schools

“MARKET SMART”

§  Leadership instability “BOILING FROGS”

§  Commodification of management education

“FAT & HAPPY”


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IS ROLE OF ACCREDITORS CHANGING?

§  How to accommodate new market entrants? §  How to deal with rising institutional complexity (multicampus operations, collaborative provision)? §  How to protect fundamental academic values (rather than acting as a barrier to entry and change)? §  How to respond to the increasing fragmentation of educational provision?


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