Niche Business School Programs

9 June 2008 at 8:00 am 6 comments

| Peter Klein |

I’m surprised that the niche strategy isn’t used more in academia. Most economics departments at research universities strive to be the “MIT of [fill-in-the-blank].” Business schools tend to value the same set of academic journals, teach from the same set of cases, and hire faculty from the same set of top schools. Not only is this strategy unlikely to work for the typical mid-tier university, it has the undesirable social consequence of creating a bland conformism in which every department in Field X looks pretty much like every other department in Field X. The virtues of experimentation and learning are lost. Herd behavior is the order of the day.

Business Week recently ran an interesting piece about several undergraduate business programs that are trying the niche strategy. The University of Louisville runs a successful equine management program. Belmont University in Nashville offers a specialized music business degree. The University of Houston trains students for the energy industry. And Florida State University has a Professional Golf Management program.

What are your experiences with niche programs, where the niche is defined by applied focus (as in the above examples), by research method or approach, by a particular theoretical focus, or otherwise?

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6 Comments Add your own

  • 1. brayden  |  9 June 2008 at 12:22 pm

    Peter – I’m curious, what would an economic explanation for the homogeneity of b-school programs be?

  • 2. Peter Klein  |  9 June 2008 at 1:24 pm

    Brayden, I know you’re trying to trick me into using the term “institutional isomorphism” in a sentence. Let me see if I can answer without taking the bait.

    The simplest possible explanation is homogeneity of preferences: B-chool faculty at School X simply believe that the Standard Model is correct. Another possibility is imperfect information: School X faculty don’t know the right way to teach and do research, but they think others may know something they don’t, and choose (rationally) to follow the leader. I suspect that inertia also plays a strong role. Universities, even nominally private business schools, aren’t really profit-maximizing entities and have little incentive to increase efficiency. I touch on this last point in my intellectuals and socialism essay.

  • 3. Donald A. Coffin  |  10 June 2008 at 8:30 am

    About 12 years ago, the business school (a distinctly non-top-tier institution) at which I teach was doing some strategic planning–what did we want to look like? Some of the (younger) faculty argued for strongly differentiating ourselves from the competition, precisely by doing something as differnet as we could that would attract students. We were argued down by the (more senior) faculty, who saw strong differentiation as a high-risk strategy.

    And I think it is a high-risk strategy. If you’re doing what everyone else does, then you don’t have to justify your approach. If things go wrong, it’s not that your program wasn’t good enough, it’s “external” forces.

    But I also thought strong differentiation was a high-reward strategy. I believed (and continue to believe, although without any ability to influence what direction the program takes) that only by doing things differently could we provide people with a reason for coming to our program (other than “we’re cheap” and “we’re close”).

    So we muddle along, continuing to do much of the same-old, same-old (at the undergrad level as well…), and fighting for market share.

  • 4. Fred Thompson  |  10 June 2008 at 12:23 pm

    From its creation thirty years ago, the place where I teach, The Atkinson Graduate School of Management, Willamette University has tried very hard to differentiate itself from other business schools. In first place, until very recently, Willamette offered one and only one business degree, the full-time, early-career MBA for business, government and not-for-profit organizations (we now offer part-time programs as well). Second, the full-time, early-career program has always been oriented to liberal-arts graduates with little or no workplace experience. Consequently our curriculum stresses broad training, practical application and learning by doing. Third, the program reflects Willamette University’s commitment to service to others over service to self in its emphasis on service learning, teamwork, and value creation and social responsibility in government and nonprofit organizations as well as in business. Fourth, we have always strived to build a functionally integrated curriculum, in which the faculty builds the crosswalks between management disciplines, rather than leaving it entirely to the students to make the connections.

    http://www.willamette.edu/agsm/

    Being different isn’t easy. We have worked hard to recruit a faculty committed to multi-sectoral, multi-disciplinary teaching and research and to build and maintain student-faculty communities of practice. For example, when the school was established, the dean recruited a faculty from various management disciples with a common research focus, government regulation of business. We have no departments and faculty offices are built around interdisciplinary bays where students and faculty can meet and talk. Much of our testing and all of our practicums are interdisciplinary, etc. We work conscientiously on consilience and curricular integration. Moreover, our location across the street from the state capital helps us retain a multi-sectoral focus, where many of the programs created at about the same time – Yale, Rice, UC Irvine and Davis – have abandoned theirs. Nevertheless, there are a lot of forces that push us in the direction of conformity. The most important of these are accreditation standards, research standards (the best journals rarely publish interdisciplinary or multi-sectoral research), and employment standards (employers expect expertise in some functional discipline from junior MBAs).

    The centripetal forces of disciplinary research can be seen in the following table, which lists the most frequently Google-cited works of this year’s faculty nucleus. If one looks hard, one can see a fair amount of interdisciplinary, multi-sectoral research and, perhaps, a common theme of collective sense making and choice – but one has to look hard.

    “Similarities and differences in human resource management in the European Union” by Lisbeth Claus. Thunderbird International Business Review. 45(6), 2003: 729-755. 7

    “On the term structure of interest rates” by Michael U. Dothan. Journal of Financial Economics 6(1), March 1978: 59-69. 268

    “Measuring the value of electronic word of mouth and its impact in consumer communities” by Paul Dwyer. Journal of Interactive Marketing 21(2), 2007: 63-79. 4

    Business statistics in practice by B.L, Bowerman, R.T. Connell, and M.L. Hand (McGraw-Hill, 2001). 25

    “Market Intelligence Dissemination across Functional Boundaries” by Elliot Maltz and Ajay K. Kohli. Journal of Marketing Research 33(1) Feb., 1996: 47-61. 178

    “The Effects of Zoning and Externalities on the Price of Land: An Empirical Analysis of Monroe County, New York” by Steven M. Maser, William H. Riker and Richard N. Rosett. Journal of Law and Economics. 20(1), Apr., 1977: 111-132. 49

    “An Empirical Investigation of the Microstructure of Knowledge Acquisition and Transfer through Learning by Doing” by Dennis Epple, Linda Argote and Kenneth Murphy. Operations Research. 44(1), Jan-Feb., 1996: 77-86. 70

    “Can Consumers Interpret Nutrition Information in the Presence of a Health Claim? A Laboratory Investigation” by G.T. Ford, M. Hastak, A. Mitra, and D.J. Ringold. Journal of Public Policy and Marketing, 15 (1), 1996: 16-27 51

    “The meaning of success: network position and the social construction of project outcomes in an R&D lab” by Laurel Smith-Doerr , Ivan M. Manev and Polly Rizova. Journal of Engineering and Technology Management 21(1-2), March-June 2004: 51-81. 11

    “Agency costs, ownership structure and corporate governance mechanisms” by Manohar Singh and WN Davidson III. Journal of Banking and Finance. 27(5), May 2003: 793-816. (citations to working paper version and careless citations included) 70

    “Voluntarily Reporting Performance Measures to the Public: A Test of Accounting Reports from U.S. Cities” by Ken A. Smith. International Public Management Journal. 7(1), 2004: 19-48. 5

    “Value Creation in Public Enterprises: An Empirical Analysis of Coordinated Organizational Changes in the Veterans Health Administration” by Nicole Thibodeau, John H. (Harry) Evans III, Nandu J. Nagarajan and Jeff Whittle. The Accounting Review. 82(2). March 2007: 483-520 (citation to working paper) 1

    “Culture and the Environment in the Pacific Northwest” by Richard J. Ellis and Fred Thompson. The American Political Science Review, Vol. 91, No. 4 (Dec., 1997), pp. 885-897. (citations to reprinted versions included) 74

    “What to do next? The case for non-predictive strategy” by Robert Wiltbank, Nicholas Dew, Stuart Read, and Saras D. Sarasvathy. Strategic Management Journal. 27 (10),2006, Pages: 981-998. 10

    Managing Organizational Change by P.E. Connor and L.K. Lake (Praeger, 1988). (citations to all three editions included)
    50

    “Whither the Nonprofit Wage Differential? Estimates from the 1990 Census” by Laura Leete. Journal of Labor Economics, Vol. 19, No. 1 (Jan., 2001), pp. 136-170. 38

    “Designs for Crisis Decision Units” by Carolyne Smart and Ilan Vertinsky. Administrative Science Quarterly, Vol. 22, No. 4 (Dec., 1977), pp. 640-657. 82

    And, as I noted, we have been working at his for 30 years. Creating a niche program in a very large metropolitan area, focusing on a particular function, like supply-chain management, or a particular industry, like hospital-management, might be easier (“the division of labor is limited only by the size of the market”). But, we have found that trying to be different takes a lot of time, effort, and energy and it isn’t obvious that these efforts produce much in the way of practical payoffs, psyche rewards not withstanding.

  • 5. Oliver Westall  |  13 June 2008 at 5:56 am

    What an interesting thread. The potential attractions of differentiation are clear analytically, but the waters are muddied in two related ways. The first is the strength of the accreditation organisations (e.g AACSB) especially in the minds of academic managers nervous that innovation or differentiation may raise questions at reaccreditation. And there’s always the tension between content and brand. Are applicants for MBA programmes really interested in their learning content? Or are they simply seeking the stamp of a brand that will be easily negotiable in the job market. If the latter, then an innovatory or differentiated programme seem less attractive to the mass market because it may raise questions in potential employers’ minds. And hanging over all is the fact that the cost of good MBA programmes is high to applicants, and the revenue is important to institutions, so risk is avoided. What do colleagues make of these suggestions?

  • 6. Fred Thompson  |  17 June 2008 at 2:03 pm

    Oliver, This is indeed an interesting thread, although it doesn’t seem to have struck a chord with other readers.

    We are all intimately familiar with this market and its participants. So, why don’t we have better answers to the question? I like your hypotheses.

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