Issue link: http://www.e-digitaleditions.com/i/337193
40 July/August 2014 BizEd PESH KOVA/TH I N KSTOCK The average discount on tuition offered by flagship full-time MBA programs at top private U.S. business schools is now 52 per- cent. That rate jumps to 56 percent at places such as Harvard and Stanford. Schools simultaneously are striving to decrease their intake each year so they can improve the quality of student profiles they report to media rankings outlets. Reductions in public funding. The ironic truth is that many public busi- ness schools are now public in name only, subject to a morass of constraints imposed by politically motivated regents, legislators, and governors. Witness the attempt by UCLA's Anderson Graduate School of Management to break free of its public chains, even though in doing so the school forsakes any future claims on state funding. Declining corporate support of education. At the Simon Business School, gone are the days when Kodak could underwrite at least 30 new EMBA students each year and give students every Friday off for classes. For the last two years, Simon's EMBA program hasn't enrolled a single student from Kodak. These five forces have created a perfect fiscal storm. It's a toxic combination, and the casualties are piling up: ■ Thunderbird School of Global Management in Glendale, Arizona—a perennial top-tier school with a strong reputation for international business—tried to sell its campus facilities to Laure- ate Education, a for-profit venture. The sale was intended to obtain an infusion of cash in the wake of a US$8.7 million operating loss last academic year. However, the school recently pulled out of that agreement, and it is now in talks with Arizona State Univer- sity regarding the formation of a merger or partnership. ■ George Washington Univer- sity in Washington, D.C., parted ways with its business school dean, following a reported $13 million operating loss. ■ Yale University's School of Management in New Haven, Connecticut, has lost $20 million over the last 15 years. ■ The Wharton School at the University of Pennsylvania in Philadelphia has been turning over admissions directors as applications to the full-time MBA program have dwindled. The school has had five directors in the past ten years. What can business schools do? We can employ the best practices we teach to articulate, execute, and constantly improve on our value proposition, ensur- ing the financial sustain- ability of the enterprise. I believe achieving these goals will take a threefold effort. First, we must offer programs that play to the strengths of our busi- ness schools or universi- ties, respond to market demand, and contribute net revenues. Second, we must take more innova- tive approaches to revenue generation. And, third, we must seize opportunities to commercialize university knowledge and promote venture creation for our regions. Through the steps outlined above, the Simon School has been able to achieve, for the first time in its relatively young history, four consecutive years of an industry norm 5.5 percent draw on its endowment. We have begun to pay down debt associated with past building projects and restructur- ing plans. Even so, we realize that we must stay mindful if we are to successfully execute our strategic plan while improvising as market dynamics continue to unfold. Distinct and Different Addressing our fiscal challenges through effective strategic planning and execution is consistent with AACSB's mission-based approach to accreditation. It begins with schools differentiating themselves as unique brands. Schools can focus on a functional area (Northwestern's Activate Your Account Today—TheExchange.aacsb.edu Also available on your mobile devices! Join the largest online community of business school professionals worldwide. NETWORKING Build your own contact list or search for colleagues by name, location, research interests, or school type. More than 11,500 active users, representing over 89 countries. MEMBER DIRECTORY EVENT RESOURCES Missed something at an AACSB event you attended? Access the session materials here. DISCUSSIONS Join the conversation today! Featuring member-generated content about assessment, innovation, entrepreneurship, curriculum, and more. BLOGS Start your own blog or comment on other interesting topics. AFFINITY GROUPS Access to nearly 20 communities, based on your shared interests. AACSB Exchange is your exclusive, members-only networking tool designed to connect you with peers and management education experts around the world. Download and share articles, reports, white papers, and more at AACSB Exchange.