Faculty Halt UCLA B-School Independence

Anderson School Dean Judy Olian

UCLA’s proposal to end state funding for the MBA program at the Anderson School of Management has hit a bureaucratic snag that could very possibly torpedo the effort. But UCLA said today that the decision by a committee of the UC system’s faculty senate to suspend its review of the plan “is not the end of the process” and that it remained committed to pursuing final approval of the change.

The proposal would put the Anderson School on a financial and governance model more closely resembling that of several other prominent public business schools, including the University of Michigan’s Ross School and the University of Virginia’s Darden School of Business. Dean Judy Olian has made the plan a major initiative of her deanship, arguing that it would give Anderson more flexibility to innovate in the full-time MBA program along with greater certainty over funding for it.

The committee’s seven-page letter to Dean Olian, however, is filled with the kind of nightmarish demands that are likely to significantly set back the proposal. The committee raised nearly every possible objection to the plan, raising numerous questions about the proposal’s budget, its effect on educational quality, affordability for students and possible undue influence by donors.

The panel claimed that current UC rules for starting self-supporting programs would not allow such a change for a pre-existing, full-time master’s degree in business administration. It urged UC officials to come up with new rules on how existing programs that receive state funds might become self-supporting.

In a statement released today, however, the university said that “UCLA leaders believe it is imperative to find innovative solutions to ensure continued academic excellence amid dramatic reductions in state support. The proposal to convert the UCLA Anderson School of Management MBA program from a state-supported to a self-supporting degree program adds an estimated $8 million for undergraduate programs campus wide, and preserves the university’s public mission. At the same time, UCLA Anderson students will obtain the benefits of greater tuition predictability, and the school will have more flexibility to invest in its full-time MBA program.

“The Anderson faculty, its Board of Visitors and the UCLA Academic Senate’s Legislative Assembly each approved the proposal, sending it to the University of California system for review. The vote by the University of California Academic Senate Coordinating Committee on Graduate Affairs to suspend its review is an advisory action and not the end of the process. For the benefit of UCLA’s undergraduate and MBA students, our faculty, and the state, UCLA leaders remain committed to pursuing final approval of the proposal.”

A careful reading of the letter sent to Dean Olian by Rachael Goodhue, a UC-Davis professor, who chairs the systemwide Coordinating Committee on Graduate Affairs, detailed so many objections that it would be difficult for the school to quickly turnaround the situation. The committee voted 10 to 0, with the UCLA representative abstaining, to stop considering the plan.

The committee said it identified a number of specific concerns that were communicated to Anderson back in July, but claimed that “none of the major areas of concern were addressed fully. Concerns remain regarding educational quality, access and affordability, faculty resources, the implications of donations contingent on self-supporting status, and incomplete and inconsistent budget information,” according to the letter.

The committee told Olian that the school’s responses to its questions on educational quality “exacerbated rather than alleviated” its concerns. The panel said the response shows a decline in the number of Ph.D courses taught and Ph.D student credited hours completed. “A revised proposal must explain these declines,” the committee insisted.

The group even wanted explanations of Anderson’s business school rankings. “The changes reported for the rankings of the M.B.A. program require discussion, and an explanation of why the existing SSP (self-supported programs) programs outrank the traditional full-time M.B.A. program relative to their respective competitors,” the panel said. “The academic review scheduled for 2012-13 should enable a thoroughly developed discussion in the proposal document.”

The committee maintained that any conversion policy should protect program access and affordability for California residents. “A state-supported program that proposes to convert to self-supporting status has, by definition, benefitted from the historical use of resources supplied in part by California taxpayers,” the panel said. “The current SSP policy requires a self-supporting program to compensate its campus for its current-period use of campus resources provided in part by California taxpayers. It does not address the value of the historical investment made by the state.

“Though perhaps it is not sufficient, one appropriate way for the university to acknowledge this value is to require ‘converting programs’ to make binding concrete commitments to maintaining access and affordability for California residents. One possible policy would be to require a minimum percentage of program revenues to be directed toward financial aid, and a minimum share of financial aid funds to be devoted to need-based aid for California residents. For example, a converting program could be required to direct at least 25% of revenues to financial aid, and 60% of financial aid (15% of revenues) to need-based aid for California residents.”

UCLA leaders have said the proposed change is the best way for the program to gain the independence it needs to thrive in an era of state budget cuts. Critics, however, have called it as a move toward privatization of public higher education. In June, UCLA’s faculty senate gave the idea only narrow approval with a 53 to 46 vote, with three abstentions.


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