BUSINESS SCHOOLS ACCREDITATION: A SURVEY OF AUSTRALIAN ACADEMICS
by
Don Sciglimpaglia, PhD Professor of Marketing, San Diego State University (
[email protected])
Christopher Medlin, PhD Associate Professor of Marketing, University of Adelaide, Australia (
[email protected])
Howard Toole, PhD Professor of Accountancy, San Diego State University (
[email protected])
G. E. Whittenburg, PhD, CPA Professor of Accountancy, San Diego State University (
[email protected])
Submitted to the 20th Small Enterprise Conference, New Zealand
Track: Entrepreneurship Education
Keywords: Business accreditation
Abstract Business Schools around the world are busy completing accreditation processes to gain or maintain their lead in a highly competitive market. These processes influence the education of our future leaders of enterprises. There are two main accreditation bodies with global strategies: the AACSB and EQUIS. Business Schools undertake accreditation with either or both of these bodies based on their strategic and geographic position. Accreditation has a cost to a Business School over and above the normal processes of continuous improvement put in place by universities and national or local governments. These costs relate to staff time for additional documentation and the funding of an external review process. Business Schools seek benefits from accreditation in terms of improvements in their internal processes and a clearer articulation and enactment of their strategy. Further, Business Schools enter into accreditation processes to gain external benefits such as recognition of quality that leads to higher enrolments and additional funds from diverse sources. In the past, few studies have examined the costs/benefits and expectations of Business Schools accreditation. This paper examines Schools of Business accreditation based on an empirical study of over 300 Australian academics from approximately 35 universities.
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INTRODUCTION The external accreditation of university and college business programs has a long established history in the United States. On the other hand, the process is just beginning in Australia, where a small group of universities has achieved some level of global business or accounting accreditation. The purpose of this study is to examine the attitudes of Australian business and commerce faculty and administrators towards the trend of external (international) accreditation. Accreditation is the process by which an academic program holds itself out for review by an external organization and is measured against a set of predetermined standards. For college and university business and commerce programs there are three international accrediting organizations. The two primary organizations are the United States-based Association to Advance Collegiate Schools of Business (AACSB) International and the Europeanheadquartered EQUIS (European Quality Improvement System), which is part of the European Foundation for Management Development (EFMD). AACSB, based on the traditional academic PhD model was founded in 1916 as the American Assembly of Collegiate Schools of Business to further the interests of American university and college business schools. EFMD, founded in 1971, is an industrial accreditation model similar to International Organization for Standardization, (ISO) certification. The third accrediting organization is the London-based Association of MBAs (AMBA), founded in 1967, which does not accredit undergraduate programs. This paper focuses on perceptions only of accreditation in Australia by AACSB and EQUIS.
MOVEMENT TOWARDS INTERNATIONAL ACCREDITATION World-wide, many business schools are facing a decline in the number of students as well as an increase in competition from additional colleges and universities, corporations and on-line universities that offer similar programs of study and degrees. Due to these factors, student recruitment has become very important to many schools, and accreditation is a key element in attracting students (Kemelgor, Johnson and Srinivasan, 2000). Therefore, accredited institutions have become more important and relevant in the academic business world. The AACSB is the largest and most prestigious of these accreditation institutions in the United States, and probably world-wide, with more than 90 years of history. It is a non-profit-organization that accredits undergraduate and graduate business schools in order to assure quality and promote excellence and continuous program improvement (Henninger, 2000). It operates and accredits schools worldwide, but the primary focus is on the United Sates, Australia and Europe (Miles, Hazaldine, 3
and Munilla, 2004). AACSB standards are mostly based on research excellence, but they also emphasize and look for high quality faculty, classroom and curricula excellence and continuous program improvement (Roller, Andrews and Bovee, 2003). Prior to 1988, the AACSB was the only business accreditation institution in the world. Thereafter, new domestic and international institutions such as EQUIS or AMBA were created, and, by 2003, the AACSB was competing with them in United States, and especially abroad, where competition with EQUIS and AMBA is intense (Miles, Hazeldine, and Munilla, 2004). Some schools are accredited by two or more of these accreditation institutions, and this dual accreditation may cause conflict in some circumstances. A possible consolidation would simplify the accreditation process. However, according the AACSB, such a merger is not likely to occur (Beckett, 2002). Due to intense domestic and international competition, the AACSB has revised its standards in order to compete in an increasingly competitive environment. These new standards devote more attention to evaluation of candidate schools’ missions and stakeholders’ needs (McKenna, Cotton, and Van Auken, 1997). In addition, the importance of assessment of learning outcomes now plays a more important role (Miles, Hazeldine, and Munilla, 2004). New standards developed in 1991 and incorporated into the accreditation process in 1994, now provide increased flexibility for different accredited business schools. Lack of flexibility was one of the major complaints directed at the old AACSB Standards. These new standards are mission driven, so that different missions, circumstances and needs of different business schools are considered. This has led to a liberalization of the accreditation process, giving opportunity to obtain accreditation to a wider range of schools (Andrews, Tate, Roe, and Yallapragada, 1994). It is unlikely that additional accreditation associations will enter the professional accreditation arena, especially in the United States. A new competitor could enter the market only if it is able to add value to the accreditation process and is seen to benefit schools (Henninger, 2000). Thus, a good understanding of the perceived costs and benefits of accreditation, worldwide, is warranted. The AACSB accreditation process is, by far, the most studied. Yet, some schools decide not to be accredited, mostly due to the low flexibility of the accreditation standards, the high cost to obtain and maintain accreditation and a lack of pressure from stakeholders. It has also been said that AACSB accreditation might detract from classroom excellence, as it emphasizes and is heavily focused on other aspects such as faculty research and publications (Roller, Andrews, and Bovee, 2003). On the other hand, some widely accepted advantages of AACSB accreditation are curriculum and program improvement, prestige, funding and ability to recruit and maintain high quality faculty (Andrews, Tate, Roe and Yallapradaga, 4
2004). Most deans and faculty of North American business schools, according to several articles and surveys conducted over the last years, share these perceptions about the advantages of accreditation. However, little is known about academics’ views towards accreditation in other parts of the world. Facing a US market nearly saturated with accredited MBA programs, the AACSB might want to refocus its efforts toward colleges and business schools that offer undergraduate degrees and international business schools worldwide (Jantzen, 2000). With such a saturated U.S. market, international accreditation is increasingly relevant for accreditation institutions such the AACSB. Because of this situation, the perception and image of those accreditation institutions in other countries outside the United States is becoming increasingly important. A better understanding of the accreditation process, as well as its benefits and advantages, outside of the United States, is going to be a decisive factor for institutions such as the AACSB in order to be successful in those international markets. That is the main reason why the AACSB is currently developing and expanding its global reach (Kraft, 2006). Most of the best and more prestigious business schools worldwide have been accredited by AACSB, with more than 500 accredited institutions in over 30 countries (AACSB Website, 2006). The Board of Directors is also going through an intense process of internationalization. By 2009, seven out of the 30 members of the board are expected to be from outside of the United States (Kraft, 2006).
PROCESS, BENEFITS AND COSTS OF ACCREDITATION Whittenburg, Toole, Sciglimplagia, and Medlin (2006) have discussed the process of accreditation, with associated costs and benefits. In that study they defined five general constructs, three of which relate to internal issues and two of which relate to external issues. The constructs are: 1) Cost of accreditation, 2) Internal process, 3) Benchmarking, 4) Attracting students and 5) Obtaining organizational support. One way that an accreditation agency enhances business education is through the accreditation process applied to business (and accounting) programs. When an academic business program undertakes the accreditation process, it has to evaluate if the benefits are worth the cost of gaining and keeping accreditation. The accreditation process is firmly ingrained in American academe, yet far less so in Australia. Thus, a study of the Australian experience offers an opportunity to examine the AACSB accreditation process development in a specific country. In Australia, there is no major generally accepted accreditation process for business schools apart from accreditation by the professional accounting associations and there is nothing equivalent to an association of business schools. Recently a small number of schools have been 5
accredited by the AACSB or have obtained European accreditation, primarily as a tool to aid in recruiting foreign students. Currently, only five business/commerce programs in Australia (the Australian Graduate School of Management, the University of Queensland, Queensland University of Technology, the University of Sydney, and University of Technology, Sydney are accredited by AACSB (2007). Other Australian universities are currently in varying stages of applying for AACSB accreditation. Nine programs in Australia are accredited by EQUIS. These are: 1) Queensland University of Technology, 2) The University of Sydney, 3) The Macquarie Graduate School of Management, 4) Curtin University of Technology, 5) The University of South Australia, 6) Monash University, 7) University of Western Australia, 8) Melbourne Business School, and 9) University of Queensland. In addition, the University of Waikato, the University of Otaga and the University of Auckland in New Zealand are accredited by EQUIS. The Dean of Business at Queensland University of Technology has stated that … “Since we received accreditation, we’ve been approached by some very prestigious business schools from the northern hemisphere and other organizations and they recognize the fact that [we’ve] joined the EQUIS group” (O’Keefe, p. 44). As noted, commerce programs are found in a variety of academic faculties or schools in Australia. While we identified 157 separate programs at 41 Australian universities (discussed later), only nine are currently accredited by EQUIS and five by the AACSB, compared to 428 accredited programs in the US. What are the benefits and costs? AACSB accreditation has many potential benefits to business and accounting programs, which are characterized as being internal or external to the college of business. Some of these benefits of accreditation are shown in Table 1:
Insert Table 1 about here In addition to the benefits, there are very real costs to obtain accreditation. Some of these are summarized in Table 2: 6
Insert Table 2 about here
Methodology This paper reports the results of a survey of Australian business and commerce administrators and academics regarding their attitudes and perceptions of AACSB and EQUIS international accreditation. An online questionnaire was prepared that solicited information in four general areas, familiarity with AACSB and EQUIS, internal issues, external issues and resulting value of accreditation. Familiarity was measured on a four-point scale of familiar, somewhat familiar, not very familiar, and not at all familiar. Attitudes towards internal and external issues were measured on a five-point Likert agreement scale. An intensive analysis of Australian university web sites was undertaken in order to determine the dean or other administrator in charge of the business or commerce program. This task was much more difficult than might be expected in an American setting because of the variety of names, and the diversity of faculties, and organization of academic programs that exists across Australian universities. Once the dean or other administrator was identified, a letter was mailed to that person asking his/her support in referring faculty to an online survey. Subsequently, an introductory e-mail message was prepared for each dean to forward to his or her faculty. In addition, to enhance response rate, numerous additional e-mails were sent to the dean and any personal contacts at each university to encourage participation. The questionnaire was open from November 2005 thru March 2006. There were 397 responses from an estimated 1,600 business faculty from the 40 primary Australian universities (approximately a 25% response rate). An exact number of business and commerce faculty is hard to ascertain because of the various names and breakdown of academic programs used in Australian universities. In addition, the survey results included responses from fifteen deans or chief administrators of academic business programs.
RESULTS Table 3 indicates that, as expected, there is a significant difference between deans and faculty as to their familiarity with AACSB and EQUIS accreditation standards and processes. Overall, less than 50% of respondents (primarily faculty) were familiar with AACSB and EQUIS accreditation standards or processes. Deans were significantly more familiar in all comparisons. Insert Table 3 about here Table 4 reports the percent of agreement (strongly agree plus agree), in descending order of agreement, with various issues internal to the business school. There were only two issues 7
where deans and faculty differed significantly: 1) accreditation strengthens internal processes and 2) accreditation requires the school to assure that its processes accomplish its mission. In both cases, the deans showed a higher level of agreement. It should be noted that the issues with the highest level of agreement all relate to the construct of “costs of accreditation” previously identified. The three internal issues with the lowest amount of agreement all come from the second construct, “internal process”. Insert Table 4 about here Table 5 reports the percent of agreement (strongly agree plus agree) in descending order of agreement with various issues external to the business school. Generally, there was little difference between dean and faculty agreement with issues except that deans responded significantly more positively to the issue of “accreditation gives a school external recognition among its peers and the community it serves”. The individual issue with the highest level of agreement related to strengthening appeal to foreign students (85.1% agree) while strengthening appeal to Australian students had only a 60.4% level of agreement. The issues with the three lowest degrees of agreement all came from construct 5, “Obtaining organizational support”. Insert Table 5 about here Table 6 reports the assessment of the value of accreditation relative to the cost in time and resources. Overall deans rated the value of accreditation (whether EQUIS or AACSB) relative to the cost in time and resources more positively than faculty. However, no more than one-half of the deans felt the value of accreditation was worth the cost in time and resources. Approximately one-third of faculty felt that accreditation (whether EQUIS or AACSB) was worth the cost in time and resources. Insert Table 6 about here Finally, Table 7 reports the comparison of the impact of accreditation, by accreditation body, on various issues. There are significant differences between deans and faculty on which accreditation agency most positively influences a school’s ability to attract foreign students, strengthen appeal to government, and gain external recognition. Clearly, deans think that EQUIS more positively affects the ability to attract foreign students while the faculty believes it is AACSB. Nearly one-half of faculty does not know whether EQUIS or AACSB strengthen appeal to government, while more than 60% of deans believe that the appeal is the same. Finally, most deans believe that both EQUIS and AACSB accreditation are equal in obtaining external recognition, while 41.4% of faculty believes that neither do. There were no significant differences between deans and faculty on the impact of EQUIS or AACSB accreditation on strengthening the school’s appeal to the business community or gaining an edge in fund raising. 8
Insert Table 7 about here
CONCLUSIONS It appears that Australian deans are more familiar with, and favorably disposed towards, accreditation than their faculty. Less than one-half of the faculty responded that they were familiar with accreditation standards or processes (whether EQUIS or AACSB). The major area of agreement relates to construct one; cost of accreditation, where both deans and faculty were in strong agreement that accreditation is costly. There was a lower level of agreement in regards to constructs two and three, internal process and benchmarking. There was an even lower level of agreement on most external items from constructs four and five, attracting students and obtaining organizational support. The sole exception being the strong belief that accreditation strengthens the appeal of commerce/business programs to foreign students. In summary only one third of the faculty surveyed, believed that the overall value of accreditation is worth the cost in time and resources. Also, it appears that deans and other university administration will have to undertake a major educational and sales effort if they wish to get their faculty to internalize the value of accreditation and the accreditation process. A relatively large percentage of faculty answered “Neither Do” when assessing the ability of AACSB and EQUIS accreditation to impact a school’s ability to attract foreign students, strengthen appeal to the business community, strengthen appeal to government, gain external recognition, and gain an edge in fund raising. This may imply the need for education of faculty of the value of accreditation, or more likely, that Australian university systems have a relatively short exposure to the accreditation process. Whether the net cost of obtaining these benefits is positive or negative still remains a moot issue in Australia.
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REFERENCES AACSB International, http://www.aacsb.edu/, accessed 26 June 2006 Andrews, R., Tate, D. & S., Roe, U. & W., Rammohan., C & Y, “Perception of Business School Deans: An Analysis of AACSB Accreditation Guidelines,” Majb, Volume 9, 1994 Beckett, F., “Accreditation Vital As Business Schools Keep Up with the Joneses,” The Times Higher Education Supplement, October 2002. Henninger, E., “Expanding American Collegiate Business School and Program Accreditation: Adding Value or Confusion,” Academy Of Educational Leadership Journal, Volume 4, Number 2, 2000. Holler, H., Andrews R., Brett, K.& L., Bovee, S., “Specialized Accreditation Of Business Schools: A Comparison Of Alternative Costs, Benefits, And Motivations,” Journal of Education for Business, 2003. Jantzen, H.R., “AACSB Mission Linked Standards: Effects on The Accreditation Process,” Journal of Education For Business, Volume 75, July 2000. Kraft, A., Chair’s Exchange, “eNewsline”, 2006 Kemelgor, B. H., Johnson, S.D. & Srinivasan, S. 2000. Forces Driving Organizational Change: A Business School Perspective, Journal of Education for Business 75 (3): 133–137. McKenna, F., Stuart, C & V., “The New Accreditation Standards: A Prospect of Tiering,” Journal of Organizational Change Management, Volume 10, 1997. Miles, M. P., Hazeldine, M., Munilla, L., “The 2003 ACCSB Accreditation Standards and Implications For Business Faculty: A Short Note,” Journal Of Education For Business, 2004. O’Keefe, B., “Players Pitch for Big League”, The Australian, 16 March 2005, 44. Roller, R.H., Andrews, B.K., and Bovee, S.L. Specialized Accreditation of Business Schools: A Comparison of Alternative Costs, Benefits, and Motivations, Journal of Education for Business, Volume 78 (4) 2003, 197-204 Srinivasan, S., Kemelgor, B., Johnson, S., The Future Of Business School Scholarship: An Empirical Assessment Of The Boyer Framework By US Deans. Journal of Education For Business, 2000. Whittenburg G., Toole H., Scglimplagia, D., Medlin. C., “AACSB International Accreditation: An Australian Perspective,” The Journal of Academic Administration In Higher Education, Spring-Fall 2006, 9-14.
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Tables Table 1 Potential Benefits Of AACSB Accreditation Accreditation allows a school to determine how their Benchmarking program compares to other similar schools. Accreditation makes schools reexamine how they do Internal Assessment things and what can be done to improve. As part of the accreditation process, a school gets Peer Review Consulting consulting from the Peer Review Team on what it can do to improve its programs. The accreditation review causes a school to examine its Examine Continuous internal processes for maintaining and improving its Improvement Processes programs. Accreditation gives a school external recognition among External Recognition its peers and in the community it serves. Competition For Accreditation can give a school an advantage in Students attracting quality domestic and international students. Accreditation gives a school an edge in fund raising Fund Raising over its non-accredited competitors.
Internal Internal Internal
Internal
External External Internal & External
Table 2 Potential Costs Of AACSB Accreditation Initial and Annual AACSB Fees Faculty Resources Increased Need for Instructional Resource Increased Demand for Research Resources
The fees for initial AACSB accreditation can be approximately $20,000 USD and several thousand dollars per year for continuing membership fees. Hundreds (if not thousands) of faculty hours are required in preparation for AACSB accreditation. In many cases, AACSB accreditation requires the universities to put more resources (e.g., faculty, support staff) into its business programs to meet accreditation student/faculty adequacy requirements. AACSB accreditation may require an increase in faculty research support in order for the faculty to meet the academic requirements of accreditation.
Table 3 Familiarity with AACSB and EQUIS Percent Overall
Deans
Faculty
Significance
Familiar With: AACSB Accreditation Standards
47.4%
87.6%
45.3%
0.00
EQUIS Accreditation Standards
48.1
81.3
46.8
0.01
AACSB Accreditation Process
44.3
87.6
42.0
0.00
EQUIS Accreditation Process
48.1
75.0
46.6
0.02
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Table 4 Agreement with Specific Internal Issues Internal Issues:
Construct
The accreditation process utilizes considerable faculty and support staff time to achieve initial accreditation.
1
Getting and maintaining accreditation can be expensive.
Agree*
Mean Score**
Dean
Faculty
88.6%
1.7
1.4
1.6
1
79.3
1.8
1.6
1.8
Substantial time is required to maintain ongoing accreditation, such as filling out periodic forms and reporting
1
78.7
2.0
1.8
2.0
The accreditation review causes a school to examine its internal processes for maintaining and improving its programs.
2
77.4
2.2
2.1
2.2
Accreditation strengthens the school/faculty standing within the university.
3
76.0
2.2
2.0
2.2
Accreditation forces schools to examine what can be done to improve their program(s).
2
74.9
2.2
2.1
2.2
Accreditation requires the school to clearly define its mission and objectives.
2
73.2
2.2
1.9
2.2
Accreditation strengthens internal processes.
2
71.3
2.3.***
1.9
2.3
Accreditation allows a school to determine how its program compares to other similar schools.
3
66.8
2.4
2.2
2.4
Accreditation requires the school to assure that its processes accomplish its mission.
2
63.6
2.4.***
1.9
2.5
Accreditation strengthens course offerings.
2
56.1
2.6
2.7
2.6
Accreditation strengthens internal faculty commitment.
2
48.3
2.9
2.8
2.8
* percent strongly agree plus agree ** strongly agree = 1, strongly disagree = 5 *** significance ≤.05
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Table 5 Agreement with Specific External Issues External Issues:
Construct
Agree*
Mean Score**
Dean
Faculty
Accreditation strengthens appeal of commerce/business programs to foreign students.
4
85.1%
1.8
1.9
1.8
Accreditation gives a school external recognition among its peers and in the community it serves.
5
75.9
2.2.***
1.8
2.2
Degrees from accredited schools are more easily recognized for transfer credit to other accredited schools and admission to graduate schools.
4
67.9
2.2
2.4
2.2
Accreditation strengthens school/faculty appeal to business/community constituency.
5
62.6
2.4
2.6
2.4
Accreditation strengthens appeal to government constituency.
5
61.6
2.4
2.7
2.4
Accreditation strengthens appeal of commerce/business programs to Australian students.
4
60.4
2.5
2.6
2.4
Accreditation can be very helpful gaining external support for the program.
5
59.0
2.4
2.5
2.4
Some grants are limited to accredited schools, therefore being accredited helps indirectly improve the grant-getting ability of a school.
5
51.6
2.6
2.9
2.6
Accreditation gives a school an edge in fund raising over its non-accredited competitors.
5
42.6
2.8
3.1
2.8
* percent strongly agree plus agree ** strongly agree = 1, strongly disagree = 5 *** significance ≤.05
Table 6 Value of Accreditation Overall value of accreditation worth cost in time and resources
Yes Overall
Dean
Faculty
Sig.
AACSB
32.7%
43.8%
32.1%
NS
EQUIS
32.1
50.0
31.1
NS
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Table 7 Comparison of Impact of Accreditation (%) AACSB
EQUIS
Same
Don’t Know
Neither Do
20.8*
6.9*
24.8*
6.0*
41.5*
Dean
6.3
25.0
43.8
0.0
25.0
Faculty
21.5
6.0
23.8
6.3
42.4
Overall
15.8
3.2
27.1
11.7
42.3
Dean
25.0
6.3
43.8
6.3
18.8
Faculty
15.3
3.0
26.2
12.0
43.5
Overall
8.2*
3.5*
28.7*
11.7*
47.9*
Dean
12.5
0.0
62.5
6.3
18.8
Faculty
8.0
3.7
26.9
12.0
49.5
Overall*
17.3*
4.4*
31.1*
7.2*
39.9*
Dean
25.0
0.0
62.5
0.0
12.5
Faculty
16.9
4.6
29.5
7.6
41.4
Overall
6.3
2.2
26.4
15.7
49.4
Dean
12.5
0.0
25.0
37.5
25.0
Faculty
6.0
2.3
26.5
14.6
50.7
Which accreditation agency most positively impacts a school’s ability to: Attract foreign students Overall
Strengthen appeal to business constituency
Strengthen appeal to government
Gain external recognition
Gain an edge in fund raising
* = significance ≤ 0.05
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