In a system that rewards researchers whose findings are published, but not necessarily practiced, who is served by ballooning tuition and studies of theory?
The economic value of a college degree is widely recognized. Burleson Consulting estimates the net present value (NPV) of a bachelor’s degree in business administration, versus graduating from high school, to be $350,000. The NPV of an MBA is estimated to be $800,000. While those figures presumably account for the lost wages while attending school, the income gains are offset by the total costs of the advanced education. A bachelor’s degree from a state university costs approximately $100,000, according to The College Board, compared to the more than $200,000 tuition incurred by students at some private universities. The Financial Times estimates the average total cost of an MBA to be between $160,000 and $220,000.
While the math suggests that both undergraduate and master’s degrees show a positive ROI, the educational investment is largely up front, which often leads to large student loans that students may not pay off until middle age. And it’s only going to get worse with tuition and fees rising at a rate of about 3% per year while financial aid has failed to keep up.
With declining government support, business schools are increasingly dependent on tuition and fees for income. Their largest expense is faculty salaries. According to the Association to Advance Collegiate Schools of Business, the starting salary for a “doctorally qualified” business school faculty member often exceeds $100,000 but can reach $150,000 to $175,000 depending on the school and field (accounting and finance being the highest, with marketing in the middle). Research-oriented universities tend to pay more and require less teaching; that’s not to say faculty there have it easy, but what are they working on during nonteaching hours?
The implication is that at most major business schools a large portion of student tuition is subsidizing faculty research. Compared to the natural and social sciences, business school faculty are not usually expected to bring in research grants. That places even more of the research burden on tuition. Knowing that, a business school student or alumnus might reasonably ask, “What am I getting for the research portion of my tuition dollar and the sacrifice that it required?”
A group of scholars from various business disciplines are asking that same question at the system level. The group, the Community for Responsible Research in Business and Management (cRRBM), includes leading marketing voices Mary Jo Bitner, the Edward M. Carson chair in service marketing at the W. P. Carey School of Business at Arizona State University, and David Reibstein, the William Stewart Woodside professor at the Wharton School of Business at the University of Pennsylvania. This group’s position paper suggests students are not getting enough from their investment. It’s reasonable to expect that faculty research would inform lectures and textbooks or that professors’ research is helping define best practice around their subject matter and provide fact-based guidance for approaching real-world problems and opportunities. One might assume the audience for this knowledge are their students and the business community. In the spirit of conscious capitalism and responsible science, there might also be the expectation that some of their research contributes to a better world that is more economically prosperous, environmentally sustainable, fair and just in terms of gender equality and wealth distribution and free of unethical and deceptive practices. But are these expectations being met? For the most part, the cRRBM has its doubts, and those concerns are not business-discipline specific.
The group takes issue with a dysfunctional ecosystem in which the currency is peer-reviewed journal articles which mainly serve to advance faculty members’ careers. In this system, “research impact” has a different meaning than a practitioner might think. It has mainly to do with the number of times an article is cited in other academic articles and journals, with only a tangential relationship to improving management practice or addressing social issues.
Too often business research is published not because it is useful or actionable in practice, but simply because it is theoretically or methodologically interesting to other scholars. In the judgment of the cRRBM, some of the factors contributing to crises of relevance and integrity in academic business research include: focus on academic audiences, overemphasis on theory, selection of esoteric topics, scientific writing style, inaccessibility to practitioners, bias toward exaggerated findings, bias toward positive findings as opposed to replications and null results and devaluation of interdisciplinary work.
Marketing is not immune to these criticisms. Though it’s not true of every article published in the field, leading journals display these questionable characteristics in varying degrees.
In its position paper, the cRRBM offers a set of sound principles for responsible research in business and suggests actions for various key stakeholder groups to take. On top of those good ideas, here are some additional thoughts:
To students: Push faculty to provide evidence of the veracity of their assertions in lectures and textbooks. By challenging conventional wisdom, you might stimulate research that is rigorous and actionable.
To parents of undergraduate students—especially those who are also alumni: As the paying customer, schedule periodic appointments with faculty, department heads and deans, and make clear your expectations as to what a business education should be delivering. Ask questions about the programs of research that faculty are conducting and why those topics are important. Share examples of problems you face in your own business that could be addressed through faculty research.
To department heads and deans: Get over the idea that 15% to 20% faculty engagement in outside, paid consulting is bad—even among younger, untenured faculty. Considering that many faculty progress straight through their education into a teaching role with limited work experience, consulting is an excellent opportunity for them to confront real-world problems. These engagements often involve the collection and analysis of hard-to-come-by data and sometimes the opportunity to publish findings or conclusions with a client that straddles the worlds of academics and practitioners.
It is unclear whether a shift in focus of academic research could help contain tuition and fee increases, but it could certainly improve the return on that investment. One outcome might be a rise in sponsorships, grants and endowments. This could occur if faculty, faced with the expectation of conducting relevant research, were more motivated to seek out data and financial support from corporations, nonprofits and professional associations. Likewise, those same entities might increasingly look to business schools as evidence providers for the pressing issues they face. While clear rules would need to be established around research objectivity and what can or can’t be published, those are solvable issues.
Lawrence A. Crosby is the retired dean of the Drucker School of Management. He is the chief data scientist at the KH Moon Center for a Functioning Society, a part of the Drucker Institute at Claremont Graduate University.