Universities should sell their business schools
By Len Shackleton
The UK has 100-plus
university-based business schools. When the first were set up in the 1960s – to
improve the quality of British management – there was a debate about whether
they should be freestanding, or perhaps linked to local business organisations
as in France, rather than lodged in universities. This debate should be
revisited.
Business schools teach
about 15 per cent of all higher education students – and a larger proportion of
overseas and post-graduate students. At one level they are a success, bringing
in big money from UK-based students, and from overseas partnerships and
franchises. But they could be very much better.
Critics charge that schools are too detached from business, overly concerned with theory rather than practice. Staff have inadequate experience in the private sector: they are excessively interested in esoteric research for the Research Excellence Framework, rather than working with businesses. They teach too little and students do not rate their teaching particularly highly. Pedagogical innovation is limited and there are few sanctions for persistently poor teachers.
Employers continue to
report dissatisfaction with many students they interview. This may be related
to low admission requirements, as vice-chancellors insist that business schools
expand recruitment to cross-subsidise other subjects. Indeed, the overcharging
of business students to keep history or arts departments open is a hidden
national scandal.
Critics charge that
schools are too detached from business, overly concerned with theory rather
than practice. Staff have inadequate experience in the private sector: they are
excessively interested in esoteric research for the Research Excellence
Framework, rather than working with businesses. They teach too little and
students do not rate their teaching particularly highly. Pedagogical innovation
is limited and there are few sanctions for persistently poor teachers.
Employers continue to
report dissatisfaction with many students they interview. This may be related
to low admission requirements, as vice-chancellors insist that business schools
expand recruitment to cross-subsidise other subjects. Indeed, the overcharging
of business students to keep history or arts departments open is a hidden
national scandal.
Business lectures are
overcrowded and students receive too little personal attention and support.
Are these criticisms
unfair? Some institutions perform better than others and several leading
schools compare favourably with international rivals.
But isn’t there
fundamentally something wrong in many of our schools having little direct input
from business and often only sporadic links with employers? Locating business
schools within a university culture of excessive regulation, heavy and
backward-looking unionisation, anachronistic contracts and a quasi-medieval
calendar does nothing to promote excellence.
It is time for change.
As the Higher Education Funding Council for England’s public funding for
business under-graduates disappears – such funding for postgraduates has never
featured significantly – and the cost of their education falls increasingly on
students themselves, there is less and less reason to stay in the sector. Let
universities sell their business schools – to for-profit or not-for-profit
corporations, management buyouts, charities or local chambers of commerce.
Over time, business
schools will reshape to meet the imperatives of a proper marketplace. Ownership
will change and organisational innovation will occur. Liberated schools will be
free to compete properly to serve young people, older people wanting to improve
their qualifications through part-time study, managers in search of updates,
and businesses seeking new ideas.
There will be a one-off
gain to universities and the public purse at a difficult time. The rest of the
higher-education sector will profit from the example.
And let’s shed some of
the regulatory baggage. We need more reliance on quality assessments (such as
AACSB, Equis and the various professional bodies) that exist independently of
state regulation, rather than the dead hand of the Quality Assurance Agency.
Business schools should
create a private student-loan system in conjunction with the financial sector.
The MBA/career-development loan model could be extended. Moreover, direct links
between business schools and banks would reduce the moral hazard inherent in
the present undergraduate loan system – where universities are not penalised
significantly for recruiting weak students and producing unemployable
graduates.
Let’s take business
schools out of universities. Teaching students about business is a business
itself and our institutions should reflect this.
Len Shackleton is a
professor of economics at the University of Buckingham, UK.
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