Soapbox

October 29, 2012 12:03 am

Survival must be academia’s common goal

Business schools need to pay attention to the bottom line

In his recent Soapbox column, George Yip states that it is difficult to find a clear-cut common objective in academia. In fact, he suggests that debates about what that common aim should be is the prevailing discussion within the ivory towers.

Not knowing what your target should be can obviously create inefficiencies and misallocation of resources, and can also drive schools into a state of internal confusion. Lacking precise purpose may even breed cynicism and complacency, preventing beneficial choices from being taken.

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So installing a common objective for faculty staff and administrators should be considered a welcome development. Let me suggest what that holy cause could be – survival. That sounds like a concise and focused concept. Easy to understand. Easy to comprehend. Easy to appreciate. The number-one goal of a school should be to keep on living. To avoid death and all that that implies. The sharing and creation of knowledge are obviously the main functional aims, but you cannot share or create knowledge if you do not exist.

We reside in turbulent times. Turbulent times help to bring structural deficiencies to the surface and long-dormant problems can no longer be avoided. So it is with business education. Many have been the deans and assorted academic grandees who in recent months have pointed fingers at the hard-to-sustain (their words) standard business school model – a model characterised as shouldering lots of fixed costs and with not all staff contributing directly to revenue generation.

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At a time of economic malaise, with student applications falling steeply in some key programmes, anything other than unmitigated devotion to the bottom line can be terminally deleterious to any but the most heavily endowed of schools. Places such as Harvard Business School, with its many hundreds of millions of dollars in wealth, can probably afford any organisational structure they fancy, possibly including tripling all fixed salaries and halving teaching commitments. But less endowed peers cannot indulge in such excesses, as the money is simply not there. For these schools, generating cash becomes more of an urgency. Not only because such an approach makes sound business sense but because doing otherwise could well spell terminal trouble for many a revered centre of learning.

Many business schools can ill-afford to take their eye off revenue generation. These are not the times for aloof contemplation. Quality delivery (excellent teaching, excellent customer service), innovation (searching for new lines of activity) and furious promotion (do not hide from the outer world) should head the agenda.

Faculty and staff must fully understand the implications of a school going under because expenses exceed revenue.

When programmes have to close because they fail to attract sufficient students, professors in turn lose a considerable amount of billable teaching hours. Some may lose their entire allotment of classroom time. Additional remuneration for teaching executives out of hours, for example, abruptly disappears. The school overall may suffer from the bad press generated by the cancellations, in turn infecting other professors at other programmes.

It is thus imperative for those business school employees who do not belong to billion-dollar endowment institutions to understand that they will personally suffer if care is not taken to guarantee that programmes are well delivered and well run, maximising the possibilities of attracting plenty of students year after year.

It is by rallying an entire school’s constituency around the goal of remaining alive through impeccable teaching and services that such a fate can be avoided.

The writer is a business school professor at Esade

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