05.26c Business School Objectives. Business schools pay too much attention to keeping MBA students happy. To be sure, that is worthy goal, but it is not important in itself, nor is it important indirectly because it is profitable, unless the means employed are cheap. As The Economist writes,

"You lose money on every traditional MBA," admits Tepper's Mr Dunn. "My guess is that no top MBAs cover their costs, because you need outstanding faculty to attract the students, and you need money to finance their research. You make it up out of endowment, gifts and contributions from companies."

A business school that sacrifices research and teaching quality to keep MBA students happy and get more tuition is not going to end up better off in the end. Indiana has a more secure source of revenue and quality: our undergraduate program. Undergraduates are much cheaper to teach than MBA students, in terms of both management attention and instructor time, and yet we turn out a high-quality education. I bet, too-- though I might be wrong--- that the non-business parts of universities ordinarily profit from skimming off business school surpluses from teaching undergraduates but let them keep the MBA tuition. [This page is http://mypage.iu.edu/~erasmuse/w/04.05.26c.htm]

To return to Eric Rasmusen's weblog, click http://php.indiana.edu/~erasmuse/w/0.rasmusen.htm.

TrackBack test