The scarcity of top-quality young faculty to teach students and carry out research in business schools has long been a serious concern. For many schools, however, the issue has now reached crisis point. A lack of faculty may already be widening the gap between the very best business schools and the rest. It certainly has the potential to change the make-up of every one of them fundamentally.
As long ago as the early 2000s, a US agency that accredits business schools worldwide, AACSB International, set up a task force to investigate the crisis. Its two reports, Management Education at Risk (2002) and Sustaining Scholarship in Business Schools (2003), are still the most recent source for reliable figures. They reported a 19% decline in the numbers of new US doctorates (PhDs) in business studies between 1995 and 2001 and predicted that the problem will deteriorate further over the next decade.
Senior associate dean for academic affairs at the Kenan-Flagler Business School, University of North Carolina at Chapel Hill, Douglas A Shackelford, says: “I tell people that finding good people is now my primary job. Where do I find them? Wherever I can”. Professor Shackelford compares the situation to needing a repair to your roof and putting it off from year to year. “I wouldn’t say we're in a real crisis yet, but some time in the future—and I don’t know when—we may well be.”
Crisis or not, there are three main reasons for the current shortage. The first is simple demographics. The “baby boom” generation (born after the second world war), which has supplied the bulk of business school faculty over the past 20 years is now rapidly reaching retirement age and is not being replaced. At the same time, the rise in the number of business schools in China, India, and central and Eastern Europe has dramatically increased the demand for qualified faculty—often recruited from the US and Western Europe. The problem is compounded by the fact that the supply of new business studies PhDs is shrinking.
Big money transfers
While there is little that can be done to overcome the inevitable effects of demographic change (though some claim to see an easing of the situation in a few years’ time), the growing competition between schools is a real problem.
Academic dean at Manchester Business School (MBS) in the UK, Professor Ken Green, says the competition for top faculty is global and that individuals often move between leading schools, rather like highly paid football stars.
“At MBS, we have an aspiration to be among the very best schools in the world by 2015,” he says. “That means being world- class in the quality of our offering and in the quality of our faculty.”
The problem, of course, is that so does everybody else. Inevitably, the laws of supply and demand mean that faculty pay is rising—and has been for some years—well above the level of inflation. But equally noticeable is the increasingly global nature of faculty recruitment.
While many US schools still rely on home-grown talent—Kenan-Flagler, for example, recruits most of its junior faculty from the 20 or 30 top US schools—the PhD intake in the US is becoming increasingly global and this is going to have a major impact on the make-up of faculty at leading US schools.
Biggest will be best
However, the shortages are not affecting all schools equally. Tuck Business School at Dartmouth College, for example, claims not to have too much difficulty attracting the faculty it needs and it is not alone in this.
Vice-dean of Instituto de Empresa (IE) in Madrid, Julio de Castro, says that, while he regularly hears complaints about the difficulties of recruiting faculty, IE has not faced any real problems and has had a good response to faculty recruitment.
“We see a lot of people who want to live in Europe, particularly Spain, and we do particularly well with Europeans and Latin Americans who have been studying in the US and now want to come to Europe,” he says. “I think people are now a lot less afraid of an international career and less worried about leaving the US. The rise of good schools in Europe has also had a lot to do with it.”
It is likely that the biggest schools will be best placed to weather the crisis. Tuck’s senior associate dean, Robert G Hansen, agrees that there could be a growing split in the US between the top and mid-tier schools, which are probably hardest hit by the faculty crisis and are increasingly dependent on visiting and adjunct faculty to meet their teaching obligations.
Prof Shackelford at Kenan-Flagler has his own ideas why the number of faculty produced, especially in the US, is drying up. One is that business schools have become too focused on published rankings.
“Before the ranking, there were two ways of building your school’s reputation. The first was by the number and quality of PhD students you produced and the second was what other similar institutions thought of you. After the rankings appeared in the late 1980s, it was what magazines and newspapers said about you.
“I think what a lot of schools did was to look at the cost of producing PhDs and say that that money could be better spent on the full-time MBA programmes, which is usually what is ranked. You may have to take on three PhD students to produce one good one. That’s expensive and the returns are very long-term.”
Indeed, while it may be a little unfair to blame published rankings entirely, it is true that producing PhDs is expensive and offers little immediate return.
The AACSB points out that in the US around 80% of funding for doctoral programmes comes directly from institutions’ own resources, whereas outside the US doctoral students are more likely to fund themselves or be employed as junior faculty. Making the issue worse in the US, according to AACSB, is the fact that the large majority of doctoral programmes are within public universities, which are facing severe budgetary constraints at present.
It is also true that faculty shortages are often very function-specific. In the UK, for example, in certain subject areas such as accounting, finance and strategy there is a continual problem of recruiting because of a shortage of candidates. This is partly down to a lack of PhD students in this area. But even if this were addressed, schools would still face competition for candidates from consulting firms, which pay significantly higher salaries.
Those who can, teach
Faculty shortages also have considerable implications for research. While the top schools will continue to be able to attract leading researchers—in fact, in order to attract faculty they are devoting even more resources to research—it is now difficult to build a cohort of researchers in a particular field because people are spread more thinly and the shift of resources towards the full-time MBA means there is an increased emphasis on teaching.
However there is no reason why teaching and research should be mutually exclusive. Schools have to undertake research because in many ways it is their raison d'être (and, besides, it helps in attracting companies who are looking for the latest ideas). But they also need people who can turn that research into teaching material that is useful to companies and their executives. It is this transfer of knowledge that is the real challenge now facing business schools.
Opinions differ as to how the situation will develop. Prof Shackelford at Kenan-Flagler is pessimistic: “I don’t think the situation is good,” he says. “I can’t say I can see light at the end of the tunnel. The increase in faculty pay might make you think that it would attract people, but that’s going to be a slow response—five to 10 years. Even if governments said today that we are going to increase the number of faculty, it would be a number of years before you saw any great improvement in scholarship.”
Tuck's Dean Hansen counters, “I don’t think it’s all that different today than in the past. It’s always been tough to get good people. After all, you are looking for someone who can teach, carry out scholarly research and relate to senior executives. That’s a tough mix. They can earn a lot of money doing something else.”
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