In an effort to be one of the world’s most recognized schools for business, Yale’s School of Management stuffs its students and faculty into century-old buildings resting upon a rat-warren of basements. That is a distant level of learning atmosphere standards from Harvard Business School’s 33- building campus, which also supports a chapel and health club.
To get up to par on today's high class collegiate living standards, Yale has plans to build a $180 million structure to help attract and retain students against rival schools. The new allure is designed by Lord Norman Foster, who built London’s “Gherkin” tower, and the building is scheduled to open in 2013.
“You can’t be in a dump if everyone else is in a spectacular building,” Oster said.
Top business schools have a common approach of designing and constructing larger, more complex business campuses to recruit the most elite students and faculty, said Yale finance professor Matthew Spiegel. New learning facilities mean additional space for faculty as well as more classrooms and lecture halls for high-margin education programs that provided essential global cash flow. Additionally, higher capacity schools can also accept more students, who invest up to $80,000 per year in tuition, room and board and other expenses.
Even schools with less capacity are developing new standards in learning atmosphere as well as educational opportunities. A mid-size Michigan university, Ferris State, has begun heavy promotion of its Michigan MBA degrees, along with revamping many facilities around campus.
Business schools are dropping a pretty penny on top architects to create elaborate glass-and-steel structures, targeting all aspects of the campus from study rooms to cafeterias and health clubs.
“The better the experience people have, the better they feel about the place, the more likely it will be that they would support it at some point,” said dean of the University of Michigan’s Ross School of Business, in Ann Arbor, Robert Dolan. As a part of the trend, in 2009 the U of M business school opened a $145 million, 270,000-square foot building to help support their Masters of Business Administration program.
Shortly after the University of Pennsylvania's Wharton School unveiled its $140 million Jon M. Huntsman Hall in 2002, competing business schools have scrambled to keep pace.
In 2004, the University of Chicago opened its $125 million Harper Center, while Michigan’s building debuted last year. Opening new facilities are Massachusetts Institute of Technology’s Sloan School of Business, in Cambridge, Massachusetts, and Stanford University's Graduate School of Business, near Palo Alto, California.
Also in the development stages are New York's Columbia Business School and Northwestern University’s Kellogg School of Management, in Evanston, Illinois. Ramping up their IT capacity for an influx of digital learning needs for their new online MBA courses is Ferris State, in Michigan.
Harvard’s buildings, which started construction in 1927, rest on a beautiful perch along the Charles River across from the rest of the university. Harvard has added more to their campus building investments, such as a glass-and-concrete chapel, housing designed to support 400 visiting executives and a health club.
The new business school building at the University of Chicago is structured around a six-story, glass-and-steel atrium that serves as the school’s “living room” for students. An assistant dean of the school adds that the new social space has helped change the perception that the school of business is a sole destination for book worms enrolled in MBA classes.
“We’re working hard to break that perception,” Kole said. “When you come to campus, you see more activity. It’s a much more positive place to be.”
In fact, applications spiked 30 percent after the first year the University of Chicago put the new building in its marketing, however improved collegiate rankings contributed to the rise as well, she noted.
While the physical condition of a business school is not the most important factor of consideration, “you do consider the facility, you do consider what school will allow you to access the latest technology,” said Ashil Ann, a 26 year old prospective college applicant at New York University’s Stern School of Business and McDonough School of Business at Georgetown University in Washington.
High tuition costs contribute to students’ rising expectations - as well as the increase in size and complexity of the new buildings, said Jonathan Levav, a faculty member at Columbia. Tuition, room and board, as well as other expenses for two years at Columbia Business School cost approximately $168,307. With such high costs of education, along with a growing demand for loan origination, the expectations students have are respectable considerations for colleges everywhere.
While a number of U.S. based universities have made cuts to new construction due to decreasing endowments, business schools, especially those that offer MBA courses, are not as nearly affected from the reductions as other areas of study because of their ability to raise money.
“Graduates of business and law schools are often the wealthiest alumni,” said Ronald Ehrenberg, an economics professor at Cornell University, in Ithaca, New York. “It is easy to raise the funds to build buildings from donors to those schools” he adds.
For the school's new complex of buildings, Stanford’s school of business was granted $105 million, the largest gift in its history, from the Oregon alumnus who founded Nike Inc., Phil Knight. The Standford business campus, which will require an estimated $350 million, will be named the Knight Management Center in his honor.
Developing new buildings can also provide more room for additional education programs, like those pursuing MBA degrees or executive education, the highly profitable, non-degree programs for business-related employees paid for by their companies.
MIT Sloan’s new building has a learning center solely for executive education, offering a better ambiance than the rest of the school. Currently, many Sloan executive education classes are held off campus.
“It is on campus, it is clearly part of the Sloan school complex and it makes it easier to say ‘yes,” said the school's the associate dean for executive education Rochelle Weichman.
The innovative offerings are also in an effort to counter the growing popularity of online MBA classes, which have provided many students an extremely convenient alternative to post-secondary education opportunities.
MIT’s building holds offices for 107 faculty members who used to be distributed across five structures throughout the campus. To drive innovative ideas and creative brainstorming, the four new office floors are designed to encourage interaction between professors of different departments, said Lucinda Hill, director of capital projects at Sloan.
The Yale School of Management, founded in 1974, is the youngest business school among the Ivy League, a group of eight U.S. colleges in the Northeast. The school has areas of study in Masters of Information Systems Management as well as many more emerging Master's programs.
“We want to build a great business school,” Yale President Richard Levin said during an interview. Levin added that he wants the school of business to be on par with Yale’s law and medical schools and “be thought of among the best” in the world.
The faculty at Yale's business school is now working in almost 200 year old buildings and offices originally intended to be bedrooms. Many classrooms are buried in building constructed in 1961, which first housed Yale’s computer department.
“The current facility doesn’t look and feel like a business school,” Levin said. “I think it does hurt us in attracting students.”
Having more students will allow Yale to assure its programs are fully enrolled and to justify the size of its faculty, Oster said. More students also help with financial forecasting for future, long-term investments.
“You don’t want to be in a position where you have three students in each category because you’ll never get enough recruiters and you won’t get classroom excitement if the electives have too few people in them,” Oster commented. “We don’t have enough students to go around.”
