Globally, AACSB accreditation is the most prestigious quality mark. It may take many years of concentrated effort and substantial financial investment to achieve AACSB accreditation. Before embarking on this accreditation journey, many business schools wonder whether their investment will yield a tangible return, especially in terms of student enrollment.
Several studies have attempted to link AACSB accreditation to various measures of business school performance, including student enrollment. Cameron et al. (2023) find that receiving AACSB accreditation elevates a school’s ranking, potentially attracting more students. Additionally, Ito (2022) suggests that AACSB accreditation can increase graduate student enrollment, particularly for teaching-oriented business schools. This notion is challenged by the study by Doh et al. (2018), indicating that HBCU business schools do not always get more enrollment through AACSB accreditation.
It can be argued that the results are mixed because it is difficult to develop a solid, longitudinal design that ties AACSB accreditation to school performance. There are many benefits of AACSB accreditation (Ito, 2022) but it is not the only variable that affects a business school’s performance. Other forces, such as demographic trends or competition, affect enrollment much more than accreditation in some markets.
Additionally, our experience indicates that accreditation efforts can have many negative effects in the short term. Having AACSB accreditation can, for example, lead to faculty attrition (because some faculty members may not wish to adhere to higher research standards or be involved in general quality improvement) or even to a drop in student enrollment (since some students prefer schools with lower academic standards where they can earn degrees more easily). According to Cameron et al. (2023), schools pursuing AACSB accreditation have “flatter undergraduate enrollment” than those not pursuing it.
It can be argued that AACSB accreditation is largely about creating and implementing a long-term plan for improving a business school. It’s a unique journey business schools choose to take. It’s hard to predict with certainty whether this journey will result in higher enrollment. The opposite outcome is quite possible. Dumond and Johnson (2013) suggest possible drawbacks or challenges associated with AACSB accreditation processes, such as limiting business schools’ ability to adjust to change. In some cases, business schools can make a strategic mistake by abandoning their current market in favor of one in which they have no advantage.
These errors in strategic planning, something that no business school is immune to, are likely to lead to lower enrollment. Peer Review Teams will often notice that a school lacks healthy enrollment and a viable financial position and require the school to address both. Unfortunately, not every business school can be successful at implementing these strategies, even with oversight from AACSB.
References
Cameron, M., McCannon, B. C., & Starr, K. (2023). AACSB accreditation and student demand. Southern Economic Journal, 90(2), 317-340.
Doh, L., Prince, D., McLain, M., & Credle, S. (2018). The impact of the AACSB accreditation on enrollment growth at HBCU(historically black colleges and universities) business schools. Pressacademia, 5(2), 130-141.
Dumond, E. J., & Johnson, T. W. (2013). Managing university business educational quality: ISO or AACSB?. Quality Assurance in Education, 21(2), 127-144.
Ito, H. (2022). Competing through international accreditation: cost-benefit analysis and process of AACSB for a business school in Japan. International Journal of Educational Management, 36(7), 1380-1393.
A business school’s strategic planning begins with a good mission statement. Having a formal and sustainable strategic planning process is a formal requirement of all major accreditation agencies for business schools. For example, EQUIS standards require every accredited business school to “define the School’s mission and explain how it relates to its identity.” (EQUIS Standards & Criteria, Chapter 1, 2023). Similarly, AACSB requires that every accredited business school should “articulate a clear and focused mission for the school” as a part of its strategic planning process (AACSB Guiding Principles and Standards for Business Accreditation, Standard 1, 2023).
A good mission statement is essential for every business school’s survival and success in the face of growing competition in business education. A mission statement serves as a concise and impactful declaration of a school’s purpose and core values. It should effectively communicate the organization’s reason for existence, its target audience, and its guiding principles.
In order to succeed, a business school needs to be known for something. Almost everything that the school does and everyone that the school is affiliated with should contribute to this reputation. Without this focus and distinctiveness, your business schools will be lost among numerous other “me too” schools, eventually suffering declining enrollment and shortages of essential resources.
Here are some characteristics of a good mission statement for a business school:
Clear and Concise: A good mission statement is clear, straightforward, and concise. All stakeholders should be able to understand it, including students, faculty, staff, and employers. A mission statement should not more than a few sentences.
Specific and Focused: The mission statement should clearly outline the school’s primary purpose and focus. It should avoid being overly broad, generic, or vague. Being “everything to everyone” is one of the worst strategies a business school can pursue.
Inspiring and Motivating: A mission statement should motivate and inspire all stakeholders. It should create a sense of purpose and passion among students, faculty, and staff.
Timeless: Business “buzzwords”, educational technologies, and pedagogical “fads” come and go. Strategies and goals of a business school may change over time too. In spite of all the changes in the external and internal environment, a good mission statement should remain relevant and timeless. It should provide a sense of continuity and stability for the school and serve as the most important foundation for all strategic decisions.
Unique and Differentiating: The mission statement should clearly highlight what sets your business school apart from thousands of other business schools across the globe. It should emphasize the organization’s unique value proposition to students. Being a “me too” business school is a sure path to mediocrity and declining enrollments.
Realistic and Achievable: While the mission statement should be aspirational, it should also be grounded in reality. Not everybody can be a Harvard Business School, serving the needs of executives from Fortune 500 companies. This is okay. Not everybody wants to commute in a Mercedes or Ferrari. People also need affordable and reliable Toyotas and Fords that get them where they want to be.
Aligned the Mission of the University: The mission statement should align with the university’s vision, mission, values, and goals. It should reflect the principles that guide decision-making and actions within the broader organization that the business school is a part of.
Student-Centric: A good mission statement should focus on delivering value to the school’s target audience. It should emphasize the impact the school aims to have on its students and the broader community that it serves.
Memorable: A memorable mission statement is more likely to be embraced by all the stakeholders. A creative statement with strong language and imagery can make it more memorable. Business schools should stay away from confusing “academic talk” or business jargon. The mission of the business school should be recited or explained by every faculty member in his or her own words. Reviewers from accreditation agencies often ask faculty whether they can explain the mission of their business schools.
Inclusive: The mission statement should be inclusive, embracing all the relevant stakeholders: students, faculty, staff, alumni, and employers.
Communicable: A good mission statement should be easily communicated across all levels of the business school. It should be accessible and relatable to everyone involved with the school. Each business school should invest time and resources in spreading awareness of its mission statement.
Measurable: Although a mission statement is not a strategic plan, it should be possible to evaluate the organization’s progress and alignment with its mission over time. Lengthy, broad, generic, and vague mission statements make such evaluation difficult.
Crafting a compelling and effective mission statement often involves lengthy collaboration and reflection among key stakeholders to ensure that it accurately represents the organization’s identity, aspirations, and principles. Unfortunately, many business schools do not have anyone formally in charge of the strategic planning process. Mission statements are often drafted or revised just before accreditation or reaccreditation report submission deadlines.
The 2020 Business Accreditation Standards by AACSB require a business to “maintain an ongoing risk analysis, identifying potential risks that could significantly impair its ability to fulfill the school’s mission, as well as a contingency plan for mitigating these risks.” With the recent events surrounding the COVID-19 pandemic and its impact on educational institutions around the globe, there is a growing realization among business schools and their leaders of the importance and usefulness of Risk Management in their organizations. In this article, we briefly discuss the Risk Management Process and offer simple, practical guidelines on how to identify, analyze, and mitigate risks with the help of a formal Risk Management Plan that is aligned with a broader Strategic Management Plan devised by a business school.
Simplifying Assumptions
In this article, we make a number of assumptions in relation to Risk Management (see Figure 1). We believe that these assumptions will simplify the Risk Management Process and make it more effective in mitigating the identified future risk events.
Figure 1. Risk Management Assumptions
Figure 1. Risk Management Assumptions
First, we believe that Risk Management is not a “bulletproof shield” for protecting a business school against all possible risks. It is rather a tool or a method that, if used effectively, can reduce the negative impact of risk on the organization. Risk Management can also be misused and turn into a vain exercise. This usually happens when the Risk Management process is (a) based on flawed analysis that does not properly identify and analyze important risks, (b) too complex and, thus, impractical, or (c) not backed by adequate resources required for risk mitigation. Second, we also believe that Risk Management is subjective. Risk Management is much closer to art rather than science; it is based on subjective reasoning and viewpoints, requires imagination for proper risk identification, and is heavily impacted by the “unknowns.” Because of that, we are strongly against a naïve, overly quantitative approach to Risk Management. We do support a formal, structured approach to risk analysis that makes use of appropriate quantitative and qualitative factors. Third, we believe that simplicity is the most effective response to the inherent complexity and serendipity of the environment that many business schools are operating it. We believe that overly complex, highly structured plans are inherently “fragile” in the face of the uncertain, highly complex, and turbulent environment that many business schools are increasingly finding themselves in. Simple, agile plans and structures are more robust and effective during the times of turbulence and uncertainty.
Risk Management Process
Risk Management can be defined as a continuous process comprised of the following steps or phases: analysis of strategic priorities and relevant internal and external factors, identification and definition of risk bearing events, analysis of risks based on likelihood and severity of their impact, mitigating risks by devising response strategies and actions and assigning people responsible for these actions, and monitoring of risks and periodic reporting in relation to these risks to key stakeholders (see Figure 2). Each of these steps is discussed in more detail in the sections below.
Figure 2. Risk Management Process
Analyzing Strategic Priorities and Relevant Internal and External Factors
Risk Management starts with the analysis of the current strategic priorities. As explained in Standard 1 of the 2020 Business Accreditation Standards published by AACSB, risk management is a part of a broader strategic management process and should be carried out in a way that supports a business school in attaining its strategic goals and objectives. Many of the internal and external risks can be identified by analyzing an organization’s internal strengths and weaknesses together with external opportunities and threats (the so-called SWOT analysis).
Identifying and Defining Risks
After this analysis, the organization should be able to identify and clearly describe important risk bearing events it is facing in relation to its internal and external environments. Examples of external risks include:
Growing competition for students among existing educational institutions
Drops in enrollment due to demographics changes
Deficit of resources due to worsening economic conditions
Examples of internal risks include:
Decreases in funding due to budgeting changes at the university level
Inadequate staffing
Turnover in leadership
A table with clear descriptions of identified risks should be the main deliverable of the risk identification and definition phase.
Analyzing Risks Based on Likelihood and Impact
While all kinds of risks can and should be identified as a part of the Risk Management process, not all risks have the same estimated likelihood and potential impact. Thus, each risk should be carefully analyzed to determine (1) the likelihood of an event occurring and (2) severity of its impact (see Figure 3).
Figure 3. Risk Categories
This categorization of risks allows one to prioritize attention and resources in relation to possible future events. Events that are very likely to occur and which can possibly have a great impact on an organization should be treated as critical events. These events require special attention and resources to prevent their negative impact on the organization. Possible future events with moderate likelihood and moderate-to-high impact should be treated as important risk events. While being treated with adequate attention and resources, as a rule, these events should require less attention and resources than critical events with high likelihood and high impact. Low likelihood events with moderate-to-high impact should require a moderate level of attention and resources. Events with moderate-to-high likelihood and low impact should be acknowledged and dealt with, but with a minimum level of resources. Finally, events with low likelihood and low impact should be discussed but probably excluded from a formal risk management plan to keep it simple.
Mitigating Risks by Devising Mitigation Actions and Assigning Responsibilities
After analyzing each possible risk event in terms of its likelihood and impact on the organization, possible actions for mitigating these risks should be devised. It is important to assign to each risk event a “risk owner”—a person responsible for taking a lead on these risk mitigation actions. More thought and extra planning should be put into critical and important events. Important organizational leaders should not be “overextended”; they should be assigned as “leads” only to critical and important risk events.
Monitoring Risks and Establishing Period Reporting to Key Stakeholders
People in charge of the specific risks should be given the formal task of monitoring the internal and external environment of a business school and carrying out mitigation actions designed to protect the organization from a possible negative impact of an event in a proactive fashion or carrying out emergency actions designed to minimize the impact of an event that has occurred already. Without a person responsible for monitoring and mitigating a potential risk event, the organization my find itself in a situation where the event is not identified or dealt with in a timely fashion. Periodic updates by people assigned to risk events should be sent to the dean. The dean can compile all of these reports in a formal Risk Management Plan update that is sent to all the key stakeholders quarterly, biannually, or annually—depending on the complexity and uncertainty of the environment that the school is operating in.
Risk Management Plan
The most important deliverable of the Risk Management process is in the form of a formal risk management plan that is updated periodically, depending on the Strategic Planning cycle length of a business school. The main elements of an effective Risk Management Plan are summarized in Table 1 below.
Strategic Goal 1 – Emphasize Faculty & Staff Development
Risk Description
Importance
Risk Owner
Mitigation Actions
ReportingTimeline
Status Updates
Inferior instructional quality in online courses
Critical
Dept. Chairs, Faculty
Comprehensive faculty training, audit of online classes
On-going
All online courses have been reviewed using a standard quality rubric
Failure to attract and retain qualified faculty
Important
Dean, Dept. Chairs
Faculty development opportunities, faculty satisfaction survey
Annual
A formal business faculty development program was established in collaboration with the Faculty Development Center
Failure to maintain appropriate portfolio of qualified faculty
Important
Dept. Chairs, Assoc. Dean
Develop and maintain a faculty resource plan
Annual
A faculty resource plan has been designed in accordance with AACSB definitions
Failure to maintain AACSB accreditation
Moderate
Dean, Assoc. Dean
Ensure adherence to AACSB standards, focus on continuous improvement
On-going
Faculty sufficiency issue has been communicated to the university’s senior leaders
Table 1. Elements of a Risk Management Plan
Note that the plan contains all the outcomes or deliverables of the steps or phases of the Risk Management Process discussed above. Periodic status updates reported by the people in charge of the risk events are appended to each of the identified risks. Another important characteristic of this Risk Management Plan summary is that it is explicitly linked to Strategic Goal 1 found in the Strategic Plan of the business school.
