How to run a business school

Is there a right way and a wrong way to run a business school? In SA at the moment, some universities are offering their schools more autonomy, while others are tightening the management noose. Shareholders of private schools, too, have different attitudes to how they should be run.

There’s little doubt that, historically, many universities — in SA, as elsewhere — have failed to understand the beast that lives within their academic halls. Unlike most departments, schools are not populated by undergraduates in pursuit of academic qualifications but mostly by mature men and women requiring post-experience education.

Even when qualifications are the goal, the emphasis is less on academic excellence than professional skills and career advancement.

What also throws universities is the amount of money their business schools generate. Some rake in millions of rands annually from executive education and MBA programmes. What university administrator, used to scratching around to pay for everyday needs, would not want to get his hands on some of that lovely loot?

In some cases, they will take all of it at source, and feed some back to the business school, while others will siphon off a percentage and leave the school the rest.

Universities and schools live in different worlds, says University of the Free State Business School director Prof Helena van Zyl. It’s not just the students who are different but also the market. Business schools must react quickly to the needs of clients. The slow decision-making response time of universities can be "a big hindrance".

Henley Africa dean Jon Foster-Pedley says: "Universities are big factories, juggernauts. Business schools are entrepreneurial. They must be agile. If they work at the same pace as universities, they risk ossification and closed-mindedness."

Some university vice-chancellors recognise this, and allow their schools considerable autonomy. Others don’t. "They appoint a school director from within the university, someone who doesn’t understand the environment in which they now operate," says Foster-Pedley. "They know they will be welcomed back into the university family once their term is up, regardless of performance, so they take the safety-first route and do nothing."

Some university schools are governed by university faculties, usually management or commerce, while others are faculties in their own right.

Pretoria University’s Gordon Institute of Business Science (Gibs), launched in 2000, falls into the second category. Dean Prof Nicola Kleyn says: "Autonomy comes with responsibilities. You need strong financial acumen to run your own funding and budget. You have to be fiercely protective of quality assurance. For me, as a faculty dean, I am responsible not only for the business school but am also expected to spend a lot of time on broader university issues."

Unisa’s Graduate School of Business Leadership is also a standalone faculty. COO Gavin Isaacs describes its status as one of "hybrid autonomy" — meaning it has freedom of action in some respects but not in others.

Prof Kosheek Sewchurran, acting director of the University of Cape Town’s Graduate School of Business (GSB), says it has taken the first steps towards becoming a faculty. Part of the university’s commerce department, it no longer sits there as comfortably as it once did. Instead, the school collaborates with many other university faculties and schools such as engineering, health and human sciences.

Sewchurran says the faculty discussion is part of a broader realignment of the GSB, including a significant increase in staff numbers. In charge of the school since mid-2018, he will oversee the transition before a full-time dean is appointed.

He describes the typical SA school-university structure as "a bit clumsy", adding: "It always leads to unnecessary internal politics, to power struggles."

Wits Business School, part of its university’s commerce faculty, experienced plenty of that a few years ago, but now director Sibusiso Sibisi says the relationship is positive.

"Autonomy implies the ability to be more agile and responsive to changing market needs," he says. "A lack of autonomy implies constraint, of having one’s hands tied, or being slow to change and grow.

"[However], our relationship with Wits University gives the school its gravitas. It is the academic foundation on which we can make significant inroads into new areas of future-relevant research."

These include specialist centres in digital business, energy leadership and African philanthropy, "established with university-wide support and backing".

Rhodes Business School director Prof Owen Skae observes: "We have skills here that benefit the university, while we receive practical support from across the institution in return. Business schools have a unique mandate, as a bridge between academia and business. As long as we both recognise what the other brings, the relationship can be mutually beneficial."

That recognition is not always evident. Most universities encourage their schools to take responsibility for all business education, from MBAs to executive education.

However, executive education at the University of KwaZulu-Natal is the preserve of the university’s Extended Learning division. It’s a situation that has frustrated successive deans at the Graduate School of Business & Leadership.

At the Tshwane University of Technology (TUT) Business School, director Prof Kobus Jonker has made clear his view that the school cannot continue offering merely an MBA and postgraduate business diploma.

Jonker, who had much to do with the successful development of Nelson Mandela University’s school in Port Elizabeth, hopes to replicate that at TUT but says the university must recognise what a business school is designed for.

It was only after arriving at the school early this year that he realised its near-invisibility. Provincial government officials were unaware of it. So was local industry, the lifeblood of any school.

Jonker says: "A business school can be a jewel in the crown for a university but if you don’t have the support of university management, you are wasting your time."

TUT officials, he says, are supportive of what he wants to achieve, which includes the school eventually taking responsibility for executive education. Other plans include renaming the school, to create its own identity, and using the university’s campuses outside Tshwane to extend its reach.

At North-West University, the Graduate School of Business & Government Leadership has no such identity crisis. It was the first outside SA’s traditional big four university schools — Gibs, Wits, Stellenbosch and Cape Town — to win international accreditation for its MBA programme.

However, director Prof Fulu Netswera is concerned by what some staff see as university encroachment. In the past, the school has dealt directly with executive education clients to set up programmes — many of them customised to individual corporate needs. Recently, however, the university has begun to act as middleman.

Netswera says: "It’s not helpful. It gets in the way of the relationship we have established over many years with clients. We still provide executive education … but our service levels are hampered by the intrusion of a third party. Our clients say they want to go back to dealing directly with us."

It’s not a problem faced by the University of Stellenbosch Business School Executive Development, a private company in which the university and private enterprise hold shares. The company, headed by CEO Chris van der Hoven, operates independently of the business school, while complementing its sibling’s academic activities.

"We are the two hulls of a catamaran, pushing in the same direction," he says. "It’s a structure that allows us to respond instantly to the needs of executive education clients. Our speed is not a function of the university, we are not in a queue waiting for it to respond."

In theory, private schools should have it even easier. Without university senates and red tape to wade through, their decision-making can be quicker. That, at least, is the theory. At Regenesys, which has led the way in offering nonstudents free access to its knowledge, dean Penny Law says: "We have to be agile and swift and innovative. If not, we go out of business. As independents, we push boundaries and take risks."

Speed, however, should not be mistaken for foolhardiness. Law says: "We still have to go through processes and justify actions." Even then, it’s no guarantee of immediate outcomes. "If we decide on a new academic programme, it can take up to two years to get it through education department administrative and quality processes."

At MSA (formerly Monash SA) and Milpark Business School, managements are still discussing autonomy with shareholders, following buyouts by local interests. MSA, originally the SA campus of an Australian university, is now owned by the Independent Institute of Education. Milpark is part of Stadio. Both schools are part of broader educational portfolios.

MSA director Prof HB Klopper says: "We are looking at levels of autonomy as part of a general alignment of policies within the group. To achieve the growth we want as a school, we need a level of freedom."

Milpark dean Cobus Oosthuizen, whose school was previously US-owned, says: "Autonomy has never been an issue for us. Unlike some university schools, we don’t need six months to make a decision. We don’t need 20 people to … debate endlessly. Why can’t four people made a decision now?"