Business schools in British Columbia and Alberta are forecasting an increase in partnerships with the private sector and more specialized programs as they compete for hard-to-find teaching talent and government funds over the next decade.
The forecast of more private involvement in the education system comes as universities integrate corporate governance and business ethics courses into their curricula in wake of the Enron scandal and other corporate malfeasance in the U.S. and Canada.
Ernie Love, dean of Simon Fraser University’s business faculty, says he “absolutely” encourages corporate partnerships because companies want future employees trained at the highest level possible, and the university wants to provide employment opportunities for students. Companies offer good learning environments, while students anxious for permanent jobs put on their best faces to make themselves and the university look good, adds Love.
“(Companies) provide the teaching hospital for us,” says Love, likening a business student’s workplace training to a medical student’s internship.
Universities rely on federal and provincial government funding to operate most of their programs.
Increased private involvement could give the appearance that business schools are using taxpayers’ money to conduct research and train personnel on behalf of private firms.
Although he understands the concerns about potential conflicts of interest, Love does not believe there is a fine line between private partnerships and public perception.
Rather than influencing business schools, companies expect business schools to influence them, he adds. “They never presume to know our business, but they do presume to say, ‘Look, here’s an issue that’s important to us,’” says Love.
This past May, Certified Management Accountants Canada gave SFU’s Segal Graduate School of Business $1 million to fund its new centre for strategic change and performance management. The centre, slated to open at SFU’s downtown Vancouver campus next year, will study strategic change and its execution, strategic performance measurement and leadership and change management.
The Canadian Institute of Chartered Accountants also provided funding for SFU’s centre for corporate government and risk management.
In recent years, SFU has created a Management of Technology MBA Business Council, which brought together 12 high-tech firms that donated a total of $1 million. Council members include Sierra Wireless, Electronic Arts, MacDonald Dettwiler and the Vancouver Economic Development Commission.
SFU also established a global asset and wealth management MBA program that involves 16 financial service companies in Vancouver, Calgary, Toronto and Montreal and all of the major banks. Companies pay annual membership fees of $25,000 per year.
“So far, they’ve given us $2 million to develop this program in the right way,” says Love.
He adds SFU developed the program after the financial services industry indicated it was a frontier area.
The Burnaby university also offers co-op programs for business undergrads. “You’re not going to get a better partnership than that,” said Love.
Meanwhile, in Alberta, companies are now more willing to develop long-term strategic partnerships with a business school that can meet their needs and help recruit employees, says Michael Percy, dean of the business faculty at the University of Alberta.
As a result, he notes, more businesses are helping the U of A’s Alberta School of Business teach courses, participating in co-op and professional development programs, and providing funds for scholarships and bursaries, teaching chairs and endowments.
But Percy and other Alberta and B.C. business school leaders say the private partnerships will not compromise their schools’ integrity.
“I don’t see ethical (problems) in the sense that programs are not for sale,” says Percy, a former Alberta Liberal MLA and finance critic, adding his school has also chosen not to rename itself after a corporate sponsor because it believes the name Alberta School of Business provides the best promotion.
Potential misuse of public funds to train employees for a private firm is not an issue, either, Percy says, because, in most cases, a student will not spend his whole career with one company.
“Our job is to give students the capacity to evaluate their environment, make judgments that they must make and then have the confidence about those decisions,” says Percy.
“The other thing is, we train our students to be employable.”
Students will only have sustainable careers if they can think critically and adjust to changes in their jobs, adds Percy. But Alberta School of Business instructors have an obligation to ensure that they discuss ethics in all courses – not just ethics classes.
The U of A’s business faculty has also shifted away from general programs to niche-based programs that cater to the needs of its surrounding region.
“If you look at the capital region, we don’t have that many corporate headquarters that Toronto has, that Calgary has, or even Vancouver,” says Percy.
Instead, U of A business undergraduate programs focus on natural resources and energy, technology transfer and commercialization, and international business. MBA students specialize in finance, engineering, and sports and recreation management.
The Alberta university’s corporate partners include Telus and EnCana Corp. The Alberta School of Business also partners with the University of Calgary and University of B.C. on MBA programs.
The University of Calgary has also shifted to more local programs that are underwritten by corporate partners, says Carol Stewart, vice-dean of the Haskayne School of Business.
Stewart says her school has been able to capitalize on the ‘Alberta Advantage’ credo, which emphasizes benefits to firms that do business in Alberta.
The U of C has secured full funding from industry for teaching and research chairs in risk management and insurance from the insurance industry; tourism from hotels and other players; finance from the Royal Bank of Canada; and a petroleum landmen program from the Canadian Association of Petroleum Landmen, which guarantees a summer job for each fourth-year student.
“It’s like running a business,” says Stewart, of designing programs. “A business school has to be very nimble in terms of forecasting and seeing where demand might be.”
But the public still expects grads with bachelor of commerce and MBA degrees to be competent in core subjects such as accounting and finance.
As a result of increasing demand for business programs from students, many Alberta colleges also grant business degrees or offer applied degree programs with universities.
In B.C., businesses appear to be well served by the province’s business schools, but businesses and institutions can still do a better job of developing more partnerships, says Dave Park, the Vancouver Board of Trade’s assistant managing director and chief economist. One area where there is a need, he says, is in the construction industry, which is suffering from a shortage of trained managers and supervisors.
University of Victoria business professor Boyd Cohen predicts private companies and business schools will develop closer relationships in the future, because there are many ways that they can work together for the common good.
“If you’re looking at trends in the business world now, they’re looking more and more at stakeholder involvement . . . The university is just one more view from a stakeholder that can play a significant role for business,” says Cohen, adding most management trends in the last 20 years originated in university business faculty research.
He also predicts B.C. business schools could become “an outcrop” for public-private partnerships (P3s).
For example, UVic is negotiating with Western Economic Diversification, a federal government agency, and Van City Credit Union to help fund a new sustainable, or ‘green’ business centre, along with other companies and organizations.
SFU’s Love says his school already operates like a P3 in some respects, but he does not foresee a typical P3 between a university, the province and private sector because there is no profit to be had for a private partner.
Experts agree that universities and companies must find a balance when it comes to funding and co-ordinating business programs.
Cohen, who was born and raised in the U.S. Midwest, says American business schools have a long history of working closely with companies.
But Canadian universities do not want to appear to be getting too cozy with private firms, he notes.
As a result, UVic does not seek corporate sponsors for buildings or classrooms, but it does try to find funding partners and advisers in the private sector.
UBC hit the proverbial jackpot a few years ago when William Sauder, a former chairman and chief executive officer for International Forest Products Ltd., donated $20 million to the business faculty.
UBC’s Sauder School of Business is now named in honour of Sauder, who has also donated millions to other UBC faculties.
Sauder’s donation spurred Premier Gordon Campbell to add another $1 million to UBC’s commerce faculty budget and boost enrolment by 125 students over the next five years.
“Here at the Sauder School of Business, we have made more of an effort to get involved with the business community,” says Robert Helsley, the school’s associate dean for faculty and research. “As a business school, or a professional school, that’s part of our mandate.”
UBC boasts an executive-in-residence program that includes such prominent business leaders as Michael Phelps, a former chairman and CEO of West Coast Energy who also chaired the Wise Persons Committee on changes to Canadian securities law, and William Riedl, who created E*Trade before selling it to Institutional Shareholder Services of Rockville, Md.
Helsley says executives in residence serve as guest lecturers, mentor students, share career experiences, offer career guidance and do some teaching.
“It’s great for the student to get access to that kind of experience, which is very different from the theoretical experience that they have,” adds Helsley.
SFU’s Love says the B.C. business educational environment has been “a lot better” since the Liberal provincial government took over from the New Democrats in 2001.
He also praises Campbell for lifting a provincial tuition cap. That move, says Love, has given SFU the financial capacity to recruit the talented people that it needs while enabling the university to accept 100 more business students per year.
Alberta has a tuition cap, which stipulates that a student’s tuition must not exceed 30 per cent of his total education cost. But the U of C’s Stewart suggests that lifting the cap is not necessarily the answer to funding woes.
She says business schools have to be realistic about their funding situations and must make prudent decisions.
“Sometimes, you realize that you can’t expand a program beyond a certain level,” said Stewart.
The U of A’s Percy says the province contributes to only 50 per cent of his business school’s budget while the university raises the rest through endowments, professional development programs, its private partnerships and other efforts.
“I don’t think we’ve been as good as advocates for post- secondary education as we should have been,” says Percy.
In his view, Alberta Premier Ralph Klein’s government has ranked funding for post-secondary programs fourth behind health care, K-12 education and infrastructure.
In the future, private partnerships may play a key role in helping universities compete for business professors amidst a global shortage.
“The issue of our recruitment of faculty is clearly going to be a front and centre issue over the next decade,” said Percy.
The U of A will recruit within North America and around the world to fill six openings in its Alberta School of Business this year, notes Percy.
He attributes the shortage to a sharp decline in the number of PhD graduates globally and the advanced age of experienced professors.
“In our business, just as in the business sector, there’s a real roll of retirements coming forward,” says Percy.
SFU has 13 business faculty openings this year. “That’s a huge issue for us,” says Love.
To help alleviate the problem, SFU is starting a business doctorate program this year so that it can fill openings within its own faculty and assist other universities.
UBC has not announced its hiring needs for this year. Daniel Muzyka, the Sauder school’s dean who was vacationing last week, was recently reappointed to a three-year term.
Geoff Shmigelsky, founder of the Internet service company Cadvision, now a part of Telus, served as the U of C’s first entrepreneur-in-residence. He says universities might be able to attract more business leaders to such programs if they could pay them through private partnerships.
“That way, they wouldn’t hurt the university’s budget and the entrepreneurs actually get a monetary reward,” says Shmigelsky, referring to the fact that executives and entrepreneurs in residence volunteer their services.
He believes that students and business leaders benefit from such programs.
“We allow these new generations to avoid some of the pitfalls that I ran into,” adds Shmigelsky. “Let’s say you have ownership of a company and you want to raise capital. How you structure the deal to raise capital can have a lot of implications on how the company is run in the future.”
Business school leaders also play prominent roles in the private sector. UBC business dean Muzyka is slated to become the next chairman of the Vancouver Board of Trade; Rebecca Grant, the dean of UVic’s business school, will serve as the next president of the Victoria Chamber of Commerce; and U of C business dean Michael Grandin doubles as chairman of Fording Canadian Coal Trust.
