Dr. Wilfred Zerbe, who came to Memorial University as Dean of the Faculty of Business Administration just last year, has recently been telling anyone who will listen that tuition fees at Memorial are just too low.
Zerbe's interest, at the moment, is increasing Memorial's MBA tuition fees, from about $4400 for a two-year program to around $10,000 a year.
Why would we do that?
Contrary to any published research I have seen, Zerbe believes that higher fees, for everyone including local students, will attract more international students. Here's how he put it today when speaking on Radio Noon, a CBC Radio show here in St. John’s:
The international students are very sensitive to the quality of the programs and services that they receive and so they are looking first of all at the academic quality which we provide very high levels of; at the same time they are looking for other programs and services and the kind of support they are going to get in order for them to reap the investment that they are making in terms of their time and their living expenses while they are doing an MBA and tuition is overall a very small proportion of the overall cost of the MBA degree. So they're looking to get...get return on their investment and they look at our MBA tuition and they miss perceive the low tuition as an indicator of low quality.What about Memorial's reputation for lower tuition? And, the fact that lower fees have been a key part of the university's marketing strategy for graduate programs since before Zerbe made the long trek to Memorial from the University of Calgary last year? Here's how he, sort of, responded to that question on the radio today:
I think it is very different to talk about access to education for undergraduate students who are...and I think that's a very strong value of Memorial University, it is certainly one I would support that in getting that first degree. But our students have their...average is 29-years of age, they have six years of experience, most of them, 75% are already working, 24% have their tuition paid for by their employer, so this is not a case of providing access to getting a degree; this is about students who have a degree who are professionals and who want to advance in careers.If you are interested in hearing more about Dr. Zerbe's theories on tuition fees, you can listen to the archived Radio Noon interview on-line here.
Hi Dr. Kirby,
ReplyDeleteThanks for asking about empirical findings on perceptions about MBA tuition.
The following is from a study conducted by Carrington Crisp for the European Foundation for Management Development, the Association of Business Schools and the Canadian Foundation of Business School Deans. The study surveyed 4829 business school graduates from 118 nationalities. A summary is available at: www.carringtoncrisp.com/images/PDFs/Bus_of_Brand_Exec_Summary_2010.pdf
"All (business) postgraduates are least likely to agree that ‘I chose my course because it was the least expensive option available’. Both full- time and part-time MBAs are most likely to agree that ‘The cost of my course had a significant impact on where I chose to study’, with as many as 50% of full-time MBAs agreeing or strongly agreeing with this statement.
Rather than simple cost, students are likely to be focused on value, which in turn is likely to be measured on outcomes and consequently information on career services and alumni become an important part of the marketing message.
More than 50% of full-time MBAs and other business Masters agreed or strongly agreed they would pay more than they had budgeted if it
meant ‘I could attend a school which would give me a better chance to get a more highly paid job on graduation’, if ‘the school had better
links with business and industry’ and ‘if the school provided better support in finding employment’
There are other studies that provide similar support for the willingness of MBA students to pay more to receive more. The fact that MBA tuition fees are high everywhere else bears this out--the fact is that the market recognizes that there is value in an MBA well beyond what we charge at Memorial. The fact that other MBA program attract much higher proportions of international students indicates that higher tuition, when coupled with enhanced programs and services, is not a deterrent to enrolment. Although price is a factor among those prospective MBA students consider, studies repeatedly show that price typically ranks well below factors related to quality and program content.
Thanks again for contributing to the dialogue.
Wilfred Zerbe
Dean, Memorial University Faculty of Administration
Welcome Dr. Zerbe,
ReplyDeleteAs I said, I am not aware of any published research which shows that higher fees, for everyone including local students, will attract more international students.
It seems that the only thing that is consistent about consultant's reports on tuition fee levels, such as the one you quote from, is their lack of consistency. This particular consultant's report goes on to say the following:
"There appears to be a link in students’ minds between value for money and brand reputation. Schools which students perceived as being low cost but high quality and high academic strength also tended to have a more positively regarded brand than other schools [including those with much higher fees].
While quality and academic strength follow each other closely suggesting that the two elements are very much seen as reflecting the same aspects of a business school, there was a very different relationship with cost. The cost line moves significantly from school to school and where it is low, while quality and academic strength are high, it suggests that respondents at that school perceive the school to be offering good value for money."
This does not appear to support your argument in favour of doubling tuition fee levels.
Hi Dale,
ReplyDeleteThere are multiple arguments at play here. One is the point we have been discussing, which is how subjective perceptions of quality are related to the objective cost of a program. The other element is that higher resources available to a program, whether they come from tuition or from other sources, including government, allow schools to increase and enhance the programs and services that they provide to students. Memorial is not able to do that because, while our current government funding plus low tuition allows us to provide an academically strong program, it does not allow for other programs and services that are available to schools that charge more, which enhance student development and career opportunities, and which students are willing to pay for.
re: "higher resources available to a program, whether they come from tuition or from other sources, including government, allow schools to increase and enhance the programs and services that they provide to students"
ReplyDeleteThey do. It would be short-sighted of our university to aim for higher quality for only your hypothetically cash-laden MBA students.
Our goal should be high quality programs across the university, not just across the parkway.
As for services "which students are willing to pay [far higher tuition] for", some consumers are willing pay $187K-$201K for an Aston Martin DB9. But, have you noticed any of these on the auto lots around town?
Hello Dr. Zerbe,
ReplyDeleteI must say that I am disappointed with your plans to increase tuition in the MBA Program. Although I understand where you are coming from, to me as a Newfoundlander, it does not make any sense.
In this blog, you stated:
"More than 50% of full-time MBAs and other business Masters agreed or strongly agreed they would pay more than they had budgeted if it meant 'I could attend a school which would give me a better chance to get a more highly paid job on graduation’, if ‘the school had better links with business and industry’ and ‘if the school provided better support in finding employment’".
I would say this statement is correct.
What I fail to see is how you are creating the "better links" and "better support in finding employment." Let's get real here. Most MBA students in NL are recruited to top positions in NL employment. I don't think you can create a
better network in that sense for Newfoundlanders, who, I imagine, are the
majority of the MBA students. My point being, is how are you benefiting these students when the tuition is increased by $6,600? What return on investment do they get for the increased tuition? Will they now get better jobs that didn't exist before in Newfoundland from the improved 'networks' that the increase in tuition will create?
As for your idea of "creating better links in business and industry", maybe you are expecting to link up with some of the major cities in Canada? However, when you have Western Ontario, U of T, York, Queen's, etc, MBA Programs, are you expecting to compete with them for top jobs in industry? I'm not sure if this is exactly realistic at this point. Once again, I don't see the justification here for the tuition increase.
I am wondering how you will justify the tuition increases? What are you proposing to do with the increased revenue? How are you going to build these 'networks'.
I had planned on completing the MBA in 3 years, however, I am unsure if that will happen. It would be harder, in my opinion, to get the return on investment necessary in Newfoundland for the MBA.
- Daniel Bennett
2010 Bachelor of Commerce Honours graduate
It appears to me that Dr. Zerbe is concerned with selling the best product he can for whatever price the market will bear.
ReplyDeleteIf I bought a used car for $50 and it died after a month, I'd say I got my money's worth. If I bought one of those $200k Aston-Martins, I'd be back at the dealership expecting a refund or replacement.
If it transpires that, as Mr. Bennett above worries, Dr. Zerbe is unable to deliver increased value for increased cost, will he be willing to provide refunds for his faulty product? Tie his pension plan to his graduates' employment income? Perhaps Dr. Zerbe only wishes to sell the *chance* at a job. Should education then be regulated like gambling, where if someone misrepresents the chances of "winning" a job that justifies the cost, the university gets fined or shut down, or someone goes to jail?
What kind of product do you believe education to be?
Hello again all.
ReplyDeleteIn response to John, as I said in my letter to the editor, my concern is providing Newfoundlanders and Labradorians with an excellent business education that enables them to succeed wherever they choose to, and to contribute to the economy and well-being of the province. Excellence takes resources which have to come from either tuition or government funding or private donations. Students do expect value for money, as the Carrington Crisp study found, and they select an MBA program based on whether they provide that value. My performance will be judged on how well the programs of the Faculty of Business Administration deliver that value for our stakeholders and so, yes, my pension is at stake.
The analogy to an expensive luxury car is an inappropriate one. We are not talking about educational frills or paying for a name brand or about the kind of tuition that is charged in much of the US or by the most expensive MBA programs in Canada. Education is not a "product" like a car but rather a process in which learners and teachers participate together in a variety experiences to transform the learner and develop his or her capabilities. So a university degree is more like a driver’s license that tells an employer about the qualifications that, with the help of the University, have been earned by the learner. And I am saying that we need to ensure that these qualifications are the best: that our students’ university experience equips them to grow and succeed and contribute. That is what quality in education is. And yes, access to quality is important in all programs of the University, not just the MBA program.
Daniel says that it is not realistic to think that our students can compete with those from MBA programs in Canada's major cities, that there is no possibility of a return on an increase in their financial investment, that we only need to think of our MBA students as having careers here in Newfoundland, and that we cannot create connections outside Newfoundland and Labrador to enhance the career success of Newfoundland MBA graduates.
The fact is that Newfoundlanders and Labradorians have the ability and the commitment to succeed anywhere. What increased tuition would allow is for them to have access to improved programs and services and be exposed to options that we currently cannot afford. We could develop a comprehensive mentorship program that would connect them with successful executives, including from our existing alumni network in Toronto and Vancouver and Calgary and New York and elsewhere. Yes we can create better links with business and industry. A dedicated career center, tailored to the specific needs of business, could help identify opportunities for our students by making local and Canadian and international firms more aware of their abilities. Increased MBA elective courses could allow greater exposure to specialized topics. Yes I’d be happy to detail where increased tuition revenues would be invested, and this would include bursaries to promote access for talented, qualified students.
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ReplyDeleteTo say that MBA graduates from Newfoundland and Labrador should not try to compete with those from the rest of Canada and the world is to say something like the following: “We are going to give you a driver’s license. In the fundamentals of driving it will be as good as the best you can get elsewhere. But you can only use it on this island. And you can’t drive over 60 kilometers per hour. And you can only drive it in this kind of vehicle. And if the rules change, sorry you haven’t been taught how to respond to that. And you should tell your employer that your speed is limited and so your organization’s speed is limited too.” The fact is that it is because we are an island that we need to be able to compete with the best in the world in the education that we provide. It is in helping organizations in Newfoundland and Labrador innovate and adapt by developing new products and services for both global and local markets that we will build our economy, our self-reliance, and our standard of living. It is in being comfortable working in a global environment, which comes from studying alongside international students that are attracted to our MBA program, that our students will be able to succeed in a global environment and contribute to the international success of organizations in Newfoundland and Labrador.
Thanks
Wilfred Zerbe
Dean, Faculty of Business Administration
Memorial University of Newfoundland
Welcome back Wilfred,
ReplyDeleteI agree that education is not a "product" like a car, but the analogy to an expensive luxury car is not an inappropriate one at all. That is, if one is indeed interested in serving the education needs of Newfoundland and Labrador.
If one is married to a high fees agenda, then it makes sense to selectively quote from a consultant's report that says what one would like to hear and use to support that agenda.
Promoting that agenda requires one to ignore the fact Newfoundlanders and Labradorians actually support reducing tuition fees at Memorial rather than increasing them.
It also requires one to ignore, as Jessica McCormick of the Canadian Federation of Students pointed out today, that taxpayers in the province have provided increased funding to Memorial University for over a decade in order to offset the institutional pressure that would otherwise have resulted from a low tuition fee policy on its own.
Whatever metaphor you are comfortable with, you are treating that transformative process of education like a product to be sold. If you are charging as much as the market will bear for a driver's license that does more than other driver's licenses, then you are selling a product. Your product is a luxury driver's license.
ReplyDeleteNo surprise, though. To modernize an aphorism: When all you have is business degree, every problem begins to look like a product.
And how much of your pension is stake? If a thousand people are priced out of an education that might have brought them out of poverty, will you too be sleeping in your car, eating cold beans? I'm sorry to say that your defense there rings a little hollow. I've never seen any university administrators broken and destitute because their graduates didn't get jobs. If this happens to someone, please tell me. I have nice bottle of homemade mead I'm saving for a celebration.
It's the responsibility of the Dean to deliver the best programs to the students. It's more than reasonable to assume that better resourcing tranlates to better product over time(of course there's no guarantee--you can have a lot of resources and still screw up, but it's a problem most would prefer over penury).
ReplyDeleteI read Dr. Zerbe's point--perception among a particular cohort that low cost = low quality/cache--to be only one among many that would support increased fees. But it's a strong one--I for one would question how Memorial can offer the same or better educational experience as everyone else at half the price.
Memorial does not offer the same or better educational experience as everyone else at half the price... Mun offers this education at half the cost to students who attend the university. The reality is that the full price is covered by the people of Newfoundland and Labrador.
ReplyDeleteAs Jessica McCormick and others have repeated we are fortunate enough to come from a province where the population understands the need for accessible education and the government has respond with additional funding for out post-secondary institutions. Since 1999 successive governments have endorsed the current tuition freeze by increasing funding to Memorial and the College of the North Atlantic, every single year.
There was once a time when tuition fees did not exist at Memorial. This did not stop the university from attracting and educating some of the most successful business people to ever come out of Newfoundland and Labrador... one person such person was a young Danny Williams!
Cameron Campbell
2011 Bachelor of Arts, Minor in Business Graduate
Yeah Wilfred, we try to do that at my company too, it's called gouging.
ReplyDeleteI just billed a client the other day for 32.50/hr when our actual cost was 12/hr. And I'll tell you I was anxious to hear that one to five second pause between me declaring our price and the customer sighing and accepting it. It's a satisfying feeling when you get the customer to just bend over and take it.