Issue link: https://www.e-digitaleditions.com/i/59887
I n the competitive world of elite business schools, money is every- thing. With sufficient funds, a school can attract world-class faculty, invest in state-of-the-art facilities, enroll the best students, and score high in the rankings. But that upward climb requires adequate funding, which usually translates into a healthy endowment and high tuition fees. Private schools generally have both. Public schools? Not so much. Yet a handful of public business schools are positioning themselves to be among the best worldwide by transforming themselves so that they operate much like pri- vate schools. They're raising fees, courting alumni, taking control of their budgets, and throwing their mortarboards into the ring. They're here to compete at the highest levels, and if that means acting like private institutions, so be it. "We haven't explicitly set out to say we want to be 'more private,'" says Robert J. Dolan, dean of the Stephen M. Ross School of Business at the University of Michigan in Ann Arbor. "But we do want to be the best business school of our type. That means being able to attract the top talent and compete with all universities, includ- ing private ones. Just defining our competitive set as other public institutions isn't the right way to think about it. Our aspirations are much higher." Howard Frank, dean of the Robert H. Smith School of Business at the University of Maryland in College Park, puts it even more bluntly. "If you look at the top ten schools, seven or eight of them are private," he says. "They're not in the top echelon because they're private, but because they have more money." The urge to pursue private money really began as states started cutting funds for education. "Many state schools now identify themselves, not as state- competitive with the top elites by raising enough money to act like private schools themselves. supported, but as state-assisted," says Hasan Pirkul, dean of the School of Manage - ment at the University of Texas at Dallas. "Depending on what school you're looking at, support from the state could be as low as 15 to 20 percent of the university's total budget. That makes it absolutely necessary to provide alternative funding sources." The percentage is even lower at the Smith School, where the annual budget is between $55 million and $58 million. "We get roughly $4 million from the state," says Frank. "The rest is made up from tuition and revenues for services and pro- grams. A private school gets no state support, so the difference between the Smith School and a $50 million private school is basically nothing." Frank and other deans emphasize that the move toward privatization brings with it a whole new attitude. "We're running an educational business," says Joseph A. Alutto, dean of the Max M. Fisher College of Business at The Ohio State University in Columbus. "We happen to be located in a public institution, but we need to think carefully about the quality of the product we have and whether that product is pro- viding value to those people who purchase it." In other words, they need to oper- ate like privately run businesses. BizEd MARCH/APRIL 2005 25