Two business school administrators on opposite sides of the world share similar positions, but face different quandaries. At the Nanyang Business School in Singapore, Vish Viswanathan is director of its newly expanded Ph.D. program designed to supply trained educators to a region with few doctoral programs.
However, he must overcome a faculty shortage as the candidates he most wants to hire are drawn to the West, where higher salaries beckon.
“During the last seven or eight years, we’ve felt the impact of this shortage,” says Viswanathan. “Singapore currency weakened after 1997; and, in terms of U.S. dollars, our salaries are not as attractive as they were before. At the same time, salaries in the U.S. have increased dramatically. So schools in many countries—the European countries, Australia, and New Zealand, as well as Singapore—are finding it difficult to attract Ph.D.s to join their faculties.”
At the same time in the United States, Saint Louis University, a private school in Missouri, has reduced its program from 60 active students to two or three. Downsizing the program was a cost-cutting measure, explains the school’s dean Neil Seitz. Although Seitz admits that such an action contributes to a faculty shortage, he finds he has no other choice.
“It’s a very difficult challenge for the profession. We might agree collectively that we should all produce more Ph.D. students, but there is no benefit for individual schools to do so. We pay the students; they don’t pay us,” says Seitz.
Both schools find themselves in the middle of a cycle that has escalated in the last few years. As costs go up, many Ph.D.-granting institutions are shrinking their doctoral programs in business, especially those in the U.S. As these business schools shrink their programs, fewer qualified educators enter the pipeline. As the number of qualified candidates in the pipeline decreases, salaries in the U.S. rise. As salaries rise, Ph.D.s from around the world are attracted to higher salaries in the U.S.—and schools worldwide find themselves in a salary war that many will likely lose.
While most observers agree that the Ph.D. shortage is not a problem that will go away quickly on its own, many educators are prescribing viable remedies to management education’s doctoral dilemma. If business schools with doctoral programs do their part to increase production of Ph.D.s, many believe they not only will revitalize their own Ph.D. programs and strengthen their reputations in the marketplace, but also increase the quality of business education and research on a global scale.
Making the Ph.D. Pay
No business school is an island—or is it? One could argue that, where doctoral programs are concerned, business schools have become isolationists. When it comes down to budgets and board meetings, many deans find they have no choice but to meet their own bottom lines, regardless of the effects on the larger marketplace.
“Many universities have reduced the size of their doctoral programs over the last five to seven years,” says Bernard Milano, president of KPMG Foundation, a global consulting firm with offices in Montvale, New Jersey. KPMG is a top sponsor of The Ph.D. Project, a program that encourages minority participation in business doctoral programs. “Some will suggest that it’s because of an absence of candidate flow; others will say that doctoral programs are too expensive to run, or that they don’t have the right faculty mix,” notes Milano. “But whatever the reasons, it seems that the people who are complaining about the supply are the same people who are responsible for the supply.”
Mea culpa, admits Seitz of Saint Louis University. He acknowledges that the faculty shortage will “become an increasing problem” for all schools. “Up to this point, we have been able to fill our open positions with highly qualified candidates, but down the road, we’re looking at some extremely tight numbers,” he predicts.
“Like every school, we have a limited budget, and like most private schools, we rely heavily on tuition. It may be true that all business schools may be collectively better off if Saint Louis University decided to invest more money in Ph.D. students, but it just doesn’t make economic sense for us. As a dean, what I want is for all other universities out there to produce Ph.D.s,” he jokes. “That would solve my problem nicely!”
All jokes aside, Seitz realizes the irony of his situation, one shared by many of his colleagues. But some believe there may be a viable and cost-effective solution. Making the Ph.D. program pay for itself, especially for schools that do not receive funding from the government, may be one of the most effective ways to stave off a shortage and return to equilibrium this cycle of demand and supply of doctorates.
Ph.D. programs specifically designed for those who go into industry are one way of making these programs cost-effective, believes Yash Gupta, dean of the University of Washington School of Business Administration in Seattle, Washington. “These individuals would come directly from industry and would have the ability to pay, as opposed to those who come directly from academia and do not have the ability to pay,” says Gupta. “Such programs would be self-supporting, and would allow universities to ramp up their capacity to accommodate this group.”
Executive doctorate programs allow the university to perpetuate and grow its doctoral program, provide a vital connection to its alumni, and contribute to the pipeline of doctorates.
The University of Washington has proposed an executive doctorate program that will fulfill such a need in the marketplace. “The EDBA is at the proposal stage. But as we are planning the program, we are focusing on the fact that today’s world is all about lifelong learning,” explains Gupta. “The competition for people to remain in the workforce and remain productive will be a function of how much they learn, and how flexible and responsive they are to the world we live in.”
Executive doctorate programs promise to benefit a university in three important ways. They allow the university to perpetuate and grow its doctoral program, provide a vital connection to its alumni, and contribute to the pipeline of doctorates, thereby decreasing a region’s dependence on faculty from other countries.
“Many universities do not take advantage of their alumni. By and large, they focus on students. Once students graduate, they’re done—their only role is to give money. But I believe that’s a poor strategy,” Gupta asserts. “Alumni will invest in your university if you invest in your alumni. That’s the basic thesis behind the executive DBA, which will be open to all graduates from the business school who have the requisite number of years of experience. Business schools can create loyal alumni when it actively helps them succeed.”
Danica Purg, dean and director of IEDC–Bled School of Management in Bled, Slovenia, indicates that the Bled School is also planning to add an executive DBA to its program. “We began to consider adding a Ph.D. program to our portfolio three years ago. We wanted to strengthen the academic level of our offerings and to enlarge the number of available faculty, particularly in the Central and Eastern European region,” explains Purg. Costs are not a concern, Purg notes, because the candidates for the program will be prepared to pay for their education.
Purg is hopeful that the program will supply faculty to the surrounding region. “The main consequence of the Ph.D. shortage worldwide will be a decrease in the development and quality of faculty,” she adds. “It is necessary that schools in Central and Eastern Europe speed up their efforts to add Ph.D. programs in order to decrease their dependency on faculty abroad.”
Greater Than Their Parts
Making the Ph.D. financially self-supporting through executive education is only one practicable solution finding support in the business school community. Another solution already at work, and apparently working well, is the development of consortia among business schools. Schools participating in such resource-sharing consortia are finding that the whole of their efforts can be much greater than the sum of their parts.
“As we look for economies in the Ph.D. program, we might look at creating partnerships with other institutions that are of like quality,” offers Mosen Anvari, dean of Case Western Reserve University Weatherhead School of Management in Cleveland, Ohio. “By sharing courses, and even using information technology to facilitate the sharing of courses, we can achieve economies of scale in certain areas.”
With its strong doctoral programs in organizational behavior and operations research, as well as other areas of management, the Weatherhead School of Management is one of the principal actors in business doctoral education. The goal of the Weatherhead program, says Anvari, is twofold. “It’s very important not only that we supply the graduates that the academic market requires, but also that our Ph.D. program ties in closely to our research enterprise. Nonetheless, we are struggling with the financial costs of doing so, because those costs are continuing to rise.”
Anvari sees two ways to leverage connections among departments and institutions to increase the power of the Ph.D. program without diminishing its quality. First, he advocates retraining degree-qualified faculty from different, but related, departments to teach courses in business. “A professor in engineering could easily be retooled in operations management,” Anvari suggests. “An economics professor could easily be retooled in finance, or a management psychologist could be retooled in organizational behavior.”
Then, there are connections to be made on a larger scale, Anvari asserts. He sees the collective power of a consortium of schools as a realistic way for Weatherhead to strengthen its own doctoral program, while helping other schools do the same for their programs. He points to the relatively small size of most business schools’ doctoral cohorts as the main factor that makes Ph.D. partnerships so attractive.
“If I only have five doctoral students, it may be difficult for me to offer all the courses they need,” he says. “However, if I can get the Carnegie-Mellons and Universities of Michigan of the world to come around, we could, through video conferencing or other means, have classes that are of sufficient size to benefit the student, while reducing our costs.”
A consortium of four schools in Montreal, Canada— comprising Concordia University, University of Quebec at Montreal, Ecole des Hautes Etudes Commerciales de Montreal, and McGill University—has found great success with this model. When its doctoral program in business was initiated 20 years ago, the consortium was mandated by the Canadian government as a means of serving a larger number of students cost-effectively. Today, through cooperative development of a Ph.D. program where courses span all four universities, the consortium serves one of the largest doctoral cohorts in the world: 268 doctoral students are currently enrolled.
“The cost of the program is reduced by placing in any given class roughly four times the number of students a single school might normally have,” explains Gary Johns, who directs the Ph.D. program at Concordia University as well as the joint committee that includes directors from all four schools. Johns admits, however, that running a doctoral program “by committee” does come with its own set of challenges. “With such a large joint program, you can end up with a proliferation of courses. Controlling this potential problem can be difficult, much more difficult than if you’re simply running your own program,” he explains.
The benefits appear to outweigh the disadvantages significantly, however. “The joint program makes our core courses more efficient,” Johns states. “As a result, it offers all four schools the opportunity to take chances. If you have a larger market, you can be more entrepreneurial and try something different, something you might not try if you had to support your own program by itself.”
As professor of economics and chairman of the Ph.D. program at Groupe ESSEC School of Management in Cergy Pontoise, France, André Fourçans points to alliances that his program has with the University of Paris and other business schools throughout Europe. “It’s difficult to have ten faculty teaching to only three students. Since that’s the case with most Ph.D. programs, we’ve had to find ways around this constraint. We share summer seminars and exchange professors and information. Or, our students can attend another university for six months or more.” As a result, Groupe ESSEC has been able to increase the size of its doctoral program from three or four students in the 1980s to 70 students in this year’s cohort.
There is little question among management educators about the nature and seriousness of this diagnosis: Management education is suffering from a Ph.D. shortage that, without action, promises to get worse.
As the Montreal consortium has found, such partnerships may be most effective among schools that share the same local area, but some believe that the boundaries of such partnerships could be expanded through the use of information technology. Although there are obstacles to obtaining a Ph.D. “long distance,” supplementing a program through online education, video conferencing, and student exchanges could be the route many schools choose to broaden their doctoral program resources.
Matters of Reputation
Regardless of where a business school is located, the Ph.D. shortage appears to have affected operations worldwide. In large part, U.S. schools have decreased the size of their programs, while increasing salaries to attract an ever-shrinking pool of qualified faculty. Schools in Europe, Asia, and other countries often have Ph.D. programs of considerable size, but they are finding it more difficult to find faculty, as qualified candidates head to the United States for higher-paying positions.
“It is difficult for us to attract faculty, because we don’t pay well enough,” says Fourçans. “This is a problem for Europe in general.”
Viswanathan of the Nanyang Business School, however, believes that the strength of Ph.D. programs lies in their ability to build a school’s reputation through research, and to attract students who see in the Ph.D. a sense of purpose. “It’s the job of Ph.D. program directors to do a better job of selling the program and to convince qualified candidates that there is much personal satisfaction in pursuing and completing a doctoral degree in business,” he observes.
In any case, many believe that playing a waiting game with the Ph.D. shortage can only result in a decrease in the quality of management education overall. John Fernandes, president and CEO of AACSB International, asserts: “If the Ph.D. diminishes significantly, or disappears, you lose the whole area of scholarship that develops the industry’s thinking. You lose your research. Without researchers who stretch the thinking of management education, we will lose the element of innovation.”
Fernandes notes that AACSB International is launching a Management Education Task Force, a group of AACSB members whose function is to identify threats to business schools and, then, to find ways of overcoming them. The Ph.D. shortage is one such threat that requires business schools’ immediate attention, he emphasizes.
“Our doctorate-granting business schools need to find ways to increase their production of Ph.D.s. This means they need to increase their marketing to students and mid-career executives. They need to recruit them, bring them into Ph.D. programs, and graduate them,” Fernandes says. It is not a matter of spending more, he continues, but of redirecting and recasting current resources. “Many schools don’t pursue these opportunities because they are stuck in the high-cost model of Ph.D. development and compensation.”
There is little question among management educators about the nature and seriousness of this diagnosis: Management education is suffering from a Ph.D. shortage that, without action, promises to get worse. However, attracting mid-career executives who can pay for their doctoral education, recruiting doctorally qualified faculty in other fields whose expertise is relevant to management, and developing alliances among like-minded institutions may be at least partial remedies. Optimum solutions will strengthen both individual institutions and the collective vitality of management education.