Education with a Bottom Line, by S. Budiansky, PRISM, October 1999, pp. 14-18.

Summarized by J. T. P. Yao, 6/15/00

"Yet so-called corporate universities are already shaking up the way both companies and universities think about their roles, their business - even their notions of what education is. The last decade has seen an explosion of in-house, corporate universities that offer courses to employees on everything from traditional business-school management topics to foreign languages to environmental engineering. … The number of corporate universities has quadrupled since the early 1980's to more than 1600, including more than 40 percent of the Fortune 500 companies, according to the latest survey by Corporate University Xchange, a Manhattan consulting firm that specializes in corporate training. … "

"The rise in corporate universities is presenting both an opportunity and a challenge to traditional universities. On the one hand, it reflects an enormous growth in demand for continuing education and a chance for universities to forge new partnerships with companies that are placing more value than ever on an educated workforce. On the other, it poses a direct competition in an arena where they have had a monopoly for about 600 years. …"

"In-house training has long been a staple of manufacturing firms - … Some of the phenomenon is, inevitably, a fad that drives itself, the sort of management-speak relabeling of corporate functions that is the bane of American business; just as it is now passe to call a personnel department anything but 'human resources,' so calling a training department anything but a 'university' marks one as behind the latest trends. But behind either technological need or management fad lies a simple business reality. …"

"Forty-one percent of that post-high-school education business is now directed toward serving the needs of non-traditional, working adult students. … Only 32 percent of all post-secondary students now fall into the category of traditional full-time students. The remaining 24 percent are part-time students working toward a degree. …"

"Universities are used to building hefty overhead fees into all their contracts with outside entities, from corporate partners to government agencies that provide research grants. They have also tended to see professional schools as cash cows that can subsidize the rest of the operation. …"

"Many corporate universities have been set up as quasi-independent, competitive units that market their offerings to other divisions of the company. … And by putting into practice elementary principles of competitiveness, corporate universities are often also naturally far more responsive to the needs of companies than are traditional universities. …"

"While degree programs may never be a high priority from the perspective of corporate training goals, they are clearly in demand from the professionals themselves. And at least a few corporate universities are beginning to see that as they learn how to compete in the education business there is no reason they shouldn't enter new markets. …"

"Ensconced as they are in a culture where the bottom line is on everyone's mind, corporate universities have paid particular attention to measuring outcomes. … Of course traditional universities enjoy significant advantages over corporate universities in meeting many of the accreditation criteria, especially the ones relating to academic standards, but when it comes to program evaluation the corporate world arguably already has an edge."

"Many universities are already moving into the 'distance learning' market. … And many corporate universities, rather than offering their own courses with their own instructors, are finding that the most effective solution is 'outsourcing' - teaming up with a university to take advantage of the undeniable expertise that academia can offer. That model could mean a huge boost in business for traditional universities, but there is no doubt that the rules are being rewritten even in these arrangements. Corporations are no longer content to just pay tuition reimbursement and accept whatever the universities have to offer; and they are no longer tied by geography to making a deal only with a local university. They are thus treating universities as they would any other vendor. …"

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