EDUCATION University Challenge Will Auckland’s new business school work?

Auckland University plans to establish world-class business school. The school will, according to dean of busi-ness Barry Spicer, enhance New Zealand’s ability to compete successfully in global markets. Rival tertiary institutions, smarting over their northern rival’s handsome $25 million government hand-out, don’t see it that way. Instead, they call it clever marketing ploy.

Better teaching staff and superior research drive international rankings. These rankings represent “pennies from heaven” when it comes to attracting high-paying foreign backsides onto lecture-hall bleachers the world over.

The decision to locate world-class business school within the University of Auckland was no-brainer, says Spicer. sizeable chunk of New Zealand business and consumer-base is located there.

But transforming University of Auckland’s regionally recognised business school into world-class institution with such limited funding will require some fancy footwork, given its questionable track-record in working with other organisations around New Zealand.

Lacking the huge endowments available to global counterparts, Auckland’s business school has gone cap-in-hand to the business community for financial assistance. To help raise the required capital needed to fund new facilities, and attract the world’s best teaching talent, the University of Auckland Business School (UABS) has, over the last three years, approached more than 140 businesses, former students and philanthropists – mostly in Wellington and Auckland.

World-class facility
UABS doesn’t have any purpose-built, dedicated teaching spaces, so it plans to spend around $80 million on its world-class teaching and learning complex. Another $30 million is allocated for new programmes and 12 new top shelf professors for subjects ranging from accounting to Maori and Pacific Island business development.

Opponents argue that if these gurus help ratchet up UABS’ international ranking, it will lure more high fee-paying international students. Spicer and Auckland University’s Vice Chancellor, former Fletcher Challenge executive Dr John Hood, think competitive approach is inevitable and all’s fair in love and academia. With the Government providing only 37 percent of their funding, Hood argues that cut-throat approach to competition merely reflects the modern global paradigm facing business schools.

Politically encouraged perhaps, but the Government was apparently persuaded that world-class business campus in Auckland is in everyone’s interests and agreed to support the UABS vision matching private enterprise donations dollar-for-dollar up to $25 million.

Business unconvinced
But without the required funding, an estimated $110 million in total, the project could turn into white elephant. Spicer says UABS is already half way to the $25 million figure. But it is not easy raising funds in today’s tight marketplace and much of the business school’s future success depends on constructive local business partnerships and networks.

Unlike the Government, many firms remain unconvinced that UABS wants anything more than large cheque. Revelations that to date, multinational firms, like Ernst & Young and Symantec have provided most of the funding is clearly not lost on many. The biggest donation so far – $3.5 million bequest – came not from Kiwi firm, but from US millionaire banker, Paul Kelly, last July. And while he won’t say who the benefactors are, Hood told Management that some local donations are in the same order as Kelly’s.

Meaningful input
Evidence that business is being shut out of the course development process is also turning significant financial backers away. It’s understood that one organisation originally willing to donate third of required $3 million for Chair In Logistics has subsequently pulled out. The about-face was triggered by UABS’ unwillingness to accept that business should have any meaningful input.

Ports of Auckland chief executive Geoff Vazey sees need for logistics chair, but now questions initial plans to chip-in up to third of the required funding. He also questions whether investing $80 million on bricks and mortar is sound business model for university to adopt in an era of the virtual classroom. “We’re being hit on so many fronts by UABS for funding. An emphasis on the outputs is what is wanted by business, not an emphasis on their thirst for dollars. It would be sad if there’s competition between chairs before funding runs out,” says Vazey.

Not all donors feel that way. Ernst & Young has offered no-strings-attached $1 million to fund chair in financial accounting. “We want to be involved in final selection, but there’s no way we’d ever want to control what the university does,” says CEO John Judge.

Recognising SME needs
Funding issues aside, others are sceptical that world-class facility will deliver world-class graduates. The success of UABS, says Otago University’s professor of management Colin Campbell-Hunt, depends on the content of its proposed full-time MBA and other post-graduate programmes. He argues that Auckland’s flagship MBA, and other programmes, will simply replicate US and UK-based business models that overlook local business dynamics.

If so, local firms might see their funds and participation simply helping to subsidise an army of accounting and similar graduates destined for multinational firms around the globe. “Auckland’s proposed world-class institution is great initiative. The big caveat is whether or not it’s going to deliver to New Zealand’s business realities – or simply create clone of US business school,” says Campbell-Hunt. Instead of pitching at giant multinational corporations, he suggests the content recognise the reality that hundreds of thousands of Kiwi firms are small businesses.

Based on evidence he’s seen so far, Mike Pratt, Waikato University’s business school dean, thinks Campbell-Hunt’s fears are well founded. “What concerns me is these programmes will produce graduates more for the likes of Boston Consulting Group than for local firms. Ideally, graduates need mobility between both sectors,” says Pratt.

Spicer, on the other hand, thinks this argument fails to recognise that even local New Zealand company or SME may be competing against overseas multinationals in the domestic market and any international market they enter. Therefore, it’s important to develop business people and managers who can play in the global sandpit.

Competitive stance divisive
New Zealand Institute of Management’s immediate past national chairman, Doug Matheson, believes all business schools should spend less time focusing on corporates and more time helping SMEs adopt best practice management. Few SMEs see the relevance of academia to their day-to-day business. Business schools can be helpful for senior management, but when it comes to moving people through the ranks they’re not really there. “Moves internationally to bridge the practical application and academic learning gap [as evident in healthcare] – is something our business schools aren’t delivering on,” says Matheson.

Interestingly, last year Microsoft donated $75,000 (to UABS) for PhD research thesis into how SMEs can become global businesses. This sort of research is good, but Matheson believes the only real measure of management skills is business outcomes, not theory. What makes for good business school from rankings perspective – quality staff, star graduates, internationally recognised accreditations, and good research – falls wide of the mark when it comes to meeting the needs of small business. “I commend Auckland’s efforts to develop world class business school. But the highly competitive nature of this initiative suggests that it could be at the risk of their counterparts.”

Pratt thinks that’s fair assessment. Historical links between business and academia in New Zealand are considerably less entrenched than in the US. And whi

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