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Journal of Education for Business
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Applying for Initial AACSB Accreditation: An
Exploratory Study to Identify Costs
Kirk C. Heriot , Geralyn Franklin & Walt W. Austin
To cite this article: Kirk C. Heriot , Geralyn Franklin & Walt W. Austin (2009) Applying for Initial
AACSB Accreditation: An Exploratory Study to Identify Costs, Journal of Education for Business,
84:5, 283-289, DOI: 10.3200/JOEB.84.5.283-289
To link to this article: http://dx.doi.org/10.3200/JOEB.84.5.283-289
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Date: 11 January 2016, At: 22:54
ApplyingforInitialAACSBAccreditation:
AnExploratoryStudytoIdentifyCosts
Downloaded by [Universitas Maritim Raja Ali Haji] at 22:54 11 January 2016
KIRKC.HERIOT
COLUMBUSSTATEUNIVERSITY
COLUMBUS,GEORGIA
GERALYNFRANKLIN
UNIVERSITYOFSOUTHFLORIDA
ST.PETERSBURG,FLORIDA
WALTW.AUSTIN
MERCERUNIVERSITY
MACON,GEORGIA
ABSTRACT.Theauthorsidentifiedthe
typeandmagnitudeofcostscollegesand
schoolsincurwhenseekingAssociationto
AdvanceCollegiateSchoolsofBusiness
(AACSB)Internationalaccreditation.This
issueisimportanttothe156schoolsandcollegescurrentlyseekinginitialaccreditation
byAACSBandtothethousandsofschools
worldwidethatcouldseekaccreditation.
AlthoughthechangesintheAACSBaccreditationstandardsopenedthedoortomany
smallerteaching-orientedschools,therevised
standardsmayinduceschoolswithlimited
resourcestoseekaccreditation.Theauthors
identifysignificantcostsinbecomingaccreditedandaconsiderableincreaseinannual
operatingcoststomaintainaccreditation.The
10schoolsinthepresentstudyexperienced
1-timeinitialexpendituresandincreased
annualexpenses.Businessschooldeansand
universityadministratorsneedtobeawareof
theinitialcostsofaccreditationalongwith
theincreasedannualcosts.
Keywords:accreditation,Associationto
AdvanceCollegiateSchoolsofBusiness,
businesseducation
Copyright©2009HeldrefPublications
O
rganizations must deal with
change as an inevitable reality
of the dynamic world in which they
operate. The implications of change
are particularly true for institutions
engagedinbusinesseducation(Kemelgor, Johnson, & Srinivasan, 2000).
Among the important issues that an
academicorganizationsshouldconsiderarethe(a)costsand(b)benefitsof
changing their programs. One important issue confronting many smaller
business schools is whether to change
from being unaccredited to becoming
an Association to Advance Collegiate
SchoolsofBusiness(AACSB)Internationalaccreditedschool.
AACSBhastwicemodifieditsoriginal 1919 standards, once in 1991 and
more recently in 2003 (AACSB International,2007).Priortotheadoptionof
themission-orientedstandardsin1991,
AACSB membership consisted mostly
of larger research-oriented business
schools. The revision of the standards
in 1991 provided an opportunity for
a school with a teaching emphasis to
pursueAACSBaccreditationaslongas
teachingwasafundamentalpartofthe
school’smission(AACSBInternational,
2007). According to our conversations
withAmyRoberts,senioraccreditation
associate for AACSB, more business
schools are responding to the change
in standards by seeking initialAACSB
accreditation. There are currently 201
schoolsinthecandidacyprogramseekingaccreditation.
Most of the recent research about
AACSBaccreditationhasexploredtopicsaboutthestandardsandtheeffectsof
thechangesincluding(a)perceptionsof
businessschooldeansabouttherevision
ofthestandardsin1991(Mayes,Heide,
&Smith,1993);(b)changesinfaculty
workloads (Henninger, 1998); (c) the
relative emphasis placed on teaching,
research, and service (McKenna, Cotton, & Van Auken, 1995); and (d) the
impact that changes in standards may
haveonbusinessfaculty(Miles,Hazeldine,&Munilla,2004).Thebenefitsof
AACSB accreditation were adequately
addressedpriortothechangeinthestandards in 1991. These benefits include
certificationofstandardsofexcellence,
signalingqualitytostudents,andhigher
facultysalaries(Pastore,1989).
Yet, the benefits of AACSB
accreditation are not free. Schools
seeking initial accreditation may need
tochangeprograms,curricula,staffing,
administration, and facilities, any of
which may entail significant costs. It
comesasasurprisetousthatnostudy
has investigated issues related to the
costsofAACSBaccreditation.McKee,
Mills,andWeatherbee(2005)suggested
that some business school deans may
seeAACSB accreditation as necessary
or inevitable, rather than a strategic
alternative that needs to be evaluated
May/June2009
283
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before being pursued. With such a
mindset,businessschooldeansmaynot
conductacost–benefitanalysis.
Thepurposeofthepresentstudywas
to identify the type and magnitude of
costs that colleges and schools incurred
when seeking AACSB accreditation.
This issue is particularly important to
the schools seeking initial accreditation
and to AACSB. At present, there are
560 AACSB-accredited schools worldwide;however,therearemorethan2,000
schools or colleges of business in the
United States alone, with thousands of
more potential member schools worldwide (AACSB International, 2009).
Thus,thepotentialnumberofprograms
thatmaybeaffectedbythecostsofinitialaccreditationissignificant.
LiteratureReview
Mostoftheresearch-basedarticleson
AACSBaccreditationfocusonthevalue
ofbusinesseducationwithanemphasis
onhowaschoolcansuccessfullyteach
businessskillsandconceptswhileconducting worthwhile business research.
Researchabouttherevisiontothestandardsin1991andinitialaccreditationis
rare, whereas research into the cost of
initialaccreditationisnonexistent.
Mayesetal.(1993)conductedasurvey of business school deans to assess
their perceptions of the 1991 AACSB
accreditation standards. Their research
classified schools as Category I, II, or
III. Category I schools are accredited
doctoral-degree granting schools with
accredited undergraduate and masters’
programs. Category II schools consist
of accredited schools without doctoral
programs,andCategoryIIIschoolsare
nonaccredited schools. These categorieswerecreatedonthebasisofPorter
and McKibbin’s (1988) classification.
Although the categories do not distinguish between accredited and nonaccredited programs with and without
masters’ programs, they are still useful
as a basis for comparison. Perhaps the
most interesting finding of the present
study was that deans from nonaccredited business schools anticipated that
AACSBaccreditationwouldchangethe
resourcesallocatedtotheirbusinessprograms. Category III deans anticipated
convertingpart-timeintofull-timeposi284
JournalofEducationforBusiness
tions. They also expected to increase
resourcesfordisciplinaryresearch.Itis
clear that each of these changes would
increase the costs of operating their
businessprograms.
Cotton, McKenna, Van Auken, and
Yeider(1995)askeddeansofaccredited
andnonaccreditedcollegiateschoolsof
business to offer their perspectives on
the impact of the change in AACSB
accreditation standards on the mix of
teaching, research, and service. Cotton et al. concluded that accredited
schools and schools seeking accreditation“sawnomandateforchangeinthe
new AACSB accreditation standards”
(p. 10).Alternatively, deans from nonaccredited schools who did not anticipate seeking accreditation believed
that they would have to change if they
were to meet the new standards. Their
responses were directly related to their
perceptions of the emphasis that they
wouldneedtoplaceonresearch.Ironically,deansfromnonaccreditedschools
seekingaccreditationbelievedthatthey
could now achieve accreditation with
more emphasis on teaching and less
emphasisonresearch.
Slone and LaCava (1993) used an
in-process observation of the efforts
of Boise State University to highlight
how its program had responded to the
new business school challenges. Slone
andLaCavapointedoutthattheircomprehensive assessment of their undergraduateprogramledtoanewstrategic
focus and a process for implementation.Morethansimplyfocusingoncosmetic issues that gave the appearance
of improvements, Slone and LaCava’s
newdeanledtheschoolonaprocessof
changeanddiscoverythatyieldedseveralusefulinsights.SloneandLaCava
discussed benefits of accreditation and
ways to achieve continuous improvement;however,theydidnotaddressthe
costsofchange.
Roller,Andrews,andBovee(2003),ina
studyofthebenefitsofaccreditationconducted among deans atAACSB schools
and non-AACSB schools, nominally
addressedthecostsofAACSBaccreditation. Roller et al.’s study indicated that
deansareawarethatadditionalcostsincur
when achieving accreditation; however,
Rolleretal.didnotprovidedetailsabout
thetypeandmagnitudeofthesecosts.
InastudyofCanadiandeansonthe
perceived value of accreditation versus
the real value of accreditation, McKee
etal.(2005)acknowledgedthataccreditationmayentailsignificantcosts.They
noted that a number of Canadian business schools were at some stage of
AACSB accreditation in 2005, in spite
oftheheavycosts(financialandhuman
resources)involvedinaccreditationand
maintenance. One Canadian business
deanestimatedthataccreditationwould
costhisschoolasmuchas$100,000.
Thus, although there is ample evidence that deans know that achieving
accreditationiscostly,thereisnosystematicresearchthatidentifiesspecificcosts
and their magnitude in achieving initial
AACSB accreditation. The purpose of
thepresentarticlewastoaddressthecost
sideofthecost–benefitparadigm.
METHOD
Yin (2003) identified three designs
thatresearcherscommonlyuse:exploratory,descriptive,andexplanatory.The
choiceoftheresearchdesigndependson
how much the researcher knows about
the issue (Creswell, 2004; Yin). Creswell posits that exploratory research
is well suited to situations in which
the research problem is difficult to
delimitandthoseinwhichtheresearch
problemisnotwellknown.Theobjective is to collect as much information
as possible. Exploratory research is a
qualitativetechniquethatelicitsdetailed
information in an effort to understand
theuniquenessofasituation(Creswell;
Yin).Exploratoryresearchrangesfrom
informal, using secondary data and
informal discussions with participants,
to more formal, using in-depth interviews, focus groups, case studies, or
pilot studies. In the present study, we
used an exploratory research method
because we had limited theoretical
knowledge about the costs associated
withinitialAACSBaccreditation.
Participants
All participants in the study were
deansselectedtoparticipateinthestudy
on the basis of two criteria. First, one
of the authors is a dean and knew the
potential participants well enough to
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discuss the study with them and ask
themtoparticipate.Werealizedthatthe
exploratorynatureofthedesignwould
require considerable effort by the participants to complete our open-ended
survey.Therefore,wewantedtobesure
that a dean was informed adequately
aboutthelevelofcommitmentrequired
before committing to participate in the
study.Second,allofthedeansarecurrentlyorpreviouslyweretheindividual
responsibleforinitialaccreditationwith
AACSB at their respective institutions.
Eachofthemwasinapositiontoprovide details about initial accreditation
costs (Creswell, 2004). Demographics
of the schools in the present study are
presentedinTable1.
Deansfrom10schoolsparticipatedin
theexploratorystudy.Atthetimeofthe
data collection, five schools had been
accredited in the past 18 months. One
school was a candidate. Four schools
hadcompletedtheirself-evaluationand
were awaiting the peer-review visit.
There were seven public schools and
three private schools. The enrollments
inthesecollegesanduniversitiesranged
from 2,400 students to almost 7,700
students,withanaverageenrollmentof
3,975 students. The universities were
located along the east coast and the
southwesternpartoftheUnitedStates.
The participating colleges or schools
ofbusinesshadbetween220and1,500
students enrolled in their graduate and
undergraduate programs, with an average enrollment of 734 students. Two
of the schools did not have an MBA
programatthetimethattheyappliedfor
AACSBaccreditation.
study, the dean at a school of business
seekingaccreditation,andamemberof
theboardofAACSB;theinstrumentwas
reviewedbytheotherauthors.Because
there is scant evidence of the types of
costsincurredintheinitialaccreditation
process, we chose not to use multiplechoice questions that may omit costs
thatwerenotincludedonthequestionnaire(Yin).Instead,theinstrumentwas
designed to prompt the participants to
identifyallofthecoststhatwereassociatedwiththeirrespectiveaccreditations.
Thus,thesurveyusedopen-endedquestionswithminimalguidanceotherthan
simpleinstructions.
intotwocategories:(a)thosethatwere
primarily one-time expenditures and
(b) those that increased annual operating costs. The one-time costs such
as upgrading infrastructure are those
that refer to improving technology or
costs associated with the accreditation process itself. The second type
of cost includes the annual increased
operating costs, such as additional
faculty,professionaldevelopment,ongoingmaintenanceoftechnology,and
AACSBannualdues.
RESULTS
With the exception of the costs of a
peer-reviewteamvisit,externalconsultantswerethemostcommonlyincurred
cost,with9ofthe10schoolsreporting
this cost. Schools in candidacy clearly
valuedhavinganexternalreviewerwho
was highly knowledgeable of AACSB
standardstoidentifyareasforimprove-
IdentificationofCosts
andAmounts
Tables 2 and 3 list the costs participating schools reported that they
incurredwhenseekingAACSBaccreditation. These costs may be divided
One-TimeCosts(CapitalCosts)
Consultants
TABLE1.ParticipatingCollegesandUniversities
College
A
B
C
D
E
F
G
H
I
J
Location
Student
enrollment
Southeast
Mid-Atlantic
Southwest
Mid-Atlantic
Southeast
Southwest
Northeast
Northeast
West
Northeast
3,000
4,300
3,400
7,680
4,500
2,600
4,000
3,870
4,000
2,400
Business
student
Yearof
enrollment accreditation
380
1,000
596
1,533
700
780
1,253
280
600
222
2005
2006
2005
2005
—
2005
2004
2003
2004
2004
Public
orprivate
Public
Public
Public
Public
Public
Public
Private
Private
Public
Private
DataCollection
Yin (2003) suggested that interview-
ing people in their own environment
could improve the quality of their
answers. However, conducting interviews in 10 different, widely dispersed
locations across the United States
was not feasible. In addition, many of
the questions pertaining to monetary
amountswerelikelytorequireresearch
and thus were unlikely to be answered
in interviews. Hence, we developed a
surveyinstrument,whichisshowninthe
Appendix. The instrument was initially
developed by an author of the present
TABLE2.One-TimeCosts(N=10)
Costelement
Useof
consultants
Mockreview
Peer-review
team
Infrastructure
upgrades
Schools
Lowest
reporting expenditureof Greatest
M
Mdn
expenditure schoolswithan expenditure expenditure expenditure
(%)
expenditure($)
($)
($)
($)
9
7
1,000
1,250
12,000
12,000
5,217
7,207
5,000
8,000
10
3,500
18,000
8,530
7,000
4
5,000
60,000
33,750
35,000
May/June2009
285
TABLE3.IncreasedAnnualExpenditures(N=10)
Annualincreased
costs
Schools
Lowest
reporting expenditureof Greatest
M
Mdn
expenditure schoolswithan expenditure expenditure expenditure
(%)
expenditure($)
($)
($)
($)
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Facultysalaries
Recruitment
Technology
Professional
development
Libraryholdings
andinformation
access
AACSBInternational
duesandconference
participation
9
9
6
142,250
2,500
9,000
800,000
15,000
45,000
319,088
7,056
29,167
222,500
5,500
28,000
10
10,000
60,000
32,075
27,500
5
4,000
25,000
12,500
5,000
7
3,000
40,000
13,857
8,000
Note.AACSB=AssociationtoAdvanceCollegiateSchoolsofBusiness.
ment. The lowest reported cost was
$1,000, whereas the highest reported
cost was $12,000 (M = $5,217). The
cause of the variation in costs among
schools was not discernable from the
survey instrument. However, possible
causesare(a)differentfeespaidtothe
consultants, (b) schools having multiplevisitsbyconsultants,or(c)differences in expenses and travel costs of
theconsultants.
MockReview
Inall,7ofthe10schoolsinthestudy
reported that they conducted a mock
review. The lowest reported cost of a
mock review was $1,000, whereas one
school reported spending $12,000 (M
=$7,207).
PeerReviewTeam
All 10 schools in the study had
received a peer-review team visit or
had been budgeted for one. The lowest reported cost was $3,500, and the
highest reported cost was $18,000 (M
=$8,530).
InfrastructureUpgrades
In all, 4 of the 10 schools reported
refurbishingorupgradingtheirphysical
plant. These expenditures ranged from
$5,000to$60,000.
286
JournalofEducationforBusiness
faculty to meet AACSB faculty sufficiencyandqualificationstandards.One
school’s faculty was adequate and did
notincuranyfacultyrecruitmentcosts.
Forschoolsincurringcosts,theyranged
from $2,500 to $15,000, with a mean
annualcostof$7,056.
AnnualTechnologyImprovementsfor
Faculty
Of the 10 schools that participated in the present study, 7 reported
increased expenditures on technology
forfacultyandstudents.Theseexpendituresrangedfrom$9,000to$45,000
per year, with an average increase of
expenditure of $29,167. The school
with the greatest increase in annual
expenditures reported acquiring databasesforfacultyresearch.
IncreasedAnnualExpenditures
ProfessionalDevelopment
Having far greater economic significance than one-time costs were the
increased annual expenditures, which
aschoolmustanticipateandincludein
futurebudgets.ThesecostsaresummarizedinTable3.
All 10 schools in the study reported
increasedcostsforprofessionaldevelopment.Thesecostsrangedfrom$10,000
to$60,000(M=$32,075).
IncreasedNumberofFaculty
andSalaries
Thisitemwasthelargestcostidentifiedbytheparticipantsinthestudy.Of
the10schoolsrespondingtothesurvey,
8 reported that they had increased the
numberoftheirfaculty.Oneschooldid
not answer the question, although it
reported an annual increase in faculty
cost.Last,onlyoneschoolreportednot
increasing the size of its faculty. Of
theeightschoolsthatprovidednumbers
on hiring additional faculty, the number of faculty members ranged from
2 to 10, with an average of 4 faculty
members. In all, 9 of the 10 schools
reportedthattheyhadincreasedannual
facultycostsrangingfrom$142,250to
$800,000,withanaverageof$319,088.
Theschoolthatreportednoincreasesin
numberswasastateschoolwithamandatoryhiringfreezeineffect.
FacultyRecruitmentCosts
Closely related to the increase in
faculty salaries was that of the annual
costsofrecruitingnewandreplacement
LibraryEnhancementandInformation
Access
In all, 5 of the 10 schools reported
direct investments in the institution’s
library to enhance the business collection or improve access to information.
Oftheschoolsmakingexpenditures,the
lowestexpenditurewas$4,000andthe
highestwas$25,000.Themeanexpenditure for those schools making them
was$12,500.
AnnualAACSBDuesandCostsof
AttendingMeetingsandSeminars
In addition to the increased annual
costs described previously, being in
candidacy and subsequently accredited
entailsmembershipfeesand,especially
during the candidacy period, increased
annual costs to attend accreditation
seminars and workshops. In addition,
9 of the 10 schools that participated
in the study indicated that between
one and six persons attended AACSB
meetings and seminars per year, with
an average of three persons attending.
Onlysevenoftheschoolsprovidedcost
dataonduesandattendance.Thecosts
reported ranged between $3,000 and
$40,000, with an average annual cost
of$13,857.
OpportunityCosts
Oneschoolindicatedthatinaddition
totheout-of-pocketcostsincurredwhen
pursuingaccreditation,ithadincurreda
major opportunity cost as well. It had
reduced programs, which resulted in
an annual drop in tuition revenue of
$400,000peryear.
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EffectivenessofCostPlanning
In preparing to enter candidacy and
subsequently maintain accreditation, a
realisticknowledgeofthetypesandmagnitudesofthecostslikelytobeincurred
is essential for making an informed
decisionaboutseekingAACSBaccreditation. Deans were asked to identify
areas in which costs exceeded or were
below estimates. Table 4 reports the
cost elements in which the actual cost
differedfromthatoftheestimatedcost
and shows the number of schools that
missedtheirestimates.
Inall,6ofthe10schoolsinthesurvey
indicatedthattheyhadnotfullyanticipatedthecostsidentifiedinthesurvey.
Failure to correctly forecast costs may
leadtoschoolsbeingunabletocontinue
andcompletetheaccreditationprocess.
Inaddition,2ofthe10schoolsreported
that costs became a major obstacle to
completing the accreditation process.
One of these two schools reported that
its president became concerned about
potential revenue loss ($400,000 per
year), and the second school reported
thatfindingqualifiedfacultyinbudgetaryrestrictionswasdifficult.Particularlynoteworthyisthattheactualcostfor
addingadditionalfacultydidnotexceed
theforecastedcostatanyoftheschools,
andattwoschoolsitwasactuallylower
thanprojected.
DISCUSSIONAND
IMPLICATIONS
Although the accreditation standards
changed, shifting some of the focus
away from research, achieving initial
accreditation remains a costly endeavor. Every school in the study experienced both one-time expenditures and
increasedannualexpenses.Thus,teaching institutions that are considering
AACSB accreditation should be aware
that the decision is fraught with economic consequences not only for the
businessschool,butfortheinstitutionas
awhole.Universityadministratorsneed
to be fully aware of the significant upfront costs of accreditation, along with
theincreasedannualexpenditures,while
facingapotentialdecreaseintuitionrevenuefromthebusinessschool.Although
some of these costs can be reasonably
anticipated, the unexpected size of the
anticipatedcostsandthosecoststhatare
notanticipatedcreateacriticalfinancial
decision for schools seeking accreditation.Asteachinginstitutions(publicand
private)examinethisissue,itisevident
TABLE4.CostsThatDifferedFromExpectations
Costelement
AACSBInternational
duesandconferences
Mockreview
Assuranceoflearningprocessa
Professionaldevelopment
Technology
Consultants
Additionalfaculty
Numberof
schools
underestimating
cost
Numberof
schools
overestimating
cost
3
2
2
1
1
1
0
0
0
0
0
0
0
2
Note.Respondentsweregiventheopportunitytomakecommentsinadditiontoprovidingaresponse
totheinstrument.AACSB=AssociationtoAdvanceCollegiateSchoolsofBusiness.
a
Indicatesassuranceoflearningwasnotincludedinthesurvey.
that AACSB accreditation may have a
significant financial impact not only on
the business programs, but also on the
rest of the college or university. Thus,
schools that are considering accreditationmustweighthecostsandbenefits.
Thefindingsofthepresentstudymay
appear obvious, especially to faculty
and administrators at AACSB accredited schools. However, the findings
maybemuchlessapparenttoschools
considering accreditation. The revised
AACSBaccreditationstandards,onthe
basisofaschool’smission,mayinduce
teaching institutions that would never
have considered accreditation under
thepriorstandardstoattempttheprocess.Considerthedifferencesbetween
traditional research-oriented schools
and teaching-oriented schools. Traditional research-oriented schools typicallyhavesignificantlygreaterbudgets
with funds routinely provided for the
itemsnecessarytomaintainaccreditation,whereassmallerteaching-oriented
schoolsmustbeginfundingitemspreviouslyunfundedandcontinuefunding
them on an annual basis. Thus, the
resources to achieve initial accreditation and maintain it may prove problematicintheshortandlongterm.
Itisclearthatcollegesandschoolsof
business pursue AACSB accreditation
for different reasons. Some colleges
andschoolsseeaccreditationasinevitable, whereas others pursue AACSB
accreditationforqualitypurposes,asa
defensivestrategy,oratthebequestof
theirleadership.Nonetheless,thepresentstudy’sfindingsindicatedthatinitial
accreditationbyAACSBisanendeavor
that incurs costs. Hence, accurate cost
identification and realistic estimation
of increased annual costs have enormousimplicationsforaschoolseeking
initial accreditation because it means
thataccreditationmaybeshort-livedif
fundsarenotavailabletomaintainthe
high-quality programs demanded by
AACSBstandards.
NOTE
KirkC.HeriotistheRayandEvelynCrowley
Endowed Chair of Entrepreneurship at Columbus State University. He teaches entrepreneurship small business management, and strategic
management at the undergraduate and graduate
levels. His research includes business education,
May/June2009
287
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determinants of new venture creation, and entrepreneurshipinchallengingenvironments.
Walt W. Austin is a professor of accounting
attheStetsonSchoolofBusinessandEconomics
and teaches courses in accounting at the undergraduatelevelandoneofthecoursesintheMBA
program.Heregularlyservesasanexpertwitness
andlegalconsultantonaccountingmatters.
Geralyn Franklin is the dean of the college
ofbusinessattheUniversityofSouthFlorida–St.
Petersburg.Shepreviouslyservedasthedeanof
theschoolofbusinessattheUniversityofTexas
of the Permian Basin. She is a member of the
board ofAACSB International and a past president of the United States Association for Small
BusinessandEntrepreneurship.
Correspondence concerning this article should
beaddressedtoKirkC.Heriot,TurnerCollegeof
Business, Columbus State University, 4225 UniversityAvenue,Columbus,GA31907,USA.
E-mail:kirk.heriot@gmail.com
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businessschoolperspective.Journal of Education for Business,75,133–137.
Mayes, B. T., Heide, D., & Smith, E. (1993).
Anticipatedchangesinthebusinessschoolcurriculum:AsurveyofdeansinAACSBaccreditedandnonaccreditedschools.JournalofOrganizationalChangeManagement,6(l),54–63.
McKee, M. C., Mills, A. J., & Weatherbee, T.
(2005).Institutionalfieldofdreams:Exploring
theAACSB and the new legitimacy of Canadian business schools. Canadian Journal of
AdministrativeScience,22,288–301.
McKenna, J. E, Cotton, C. C., &VanAuken, S.
(1995).Businessschoolemphasisonteaching,
research and service to industry: Does where
you sit determine where you stand? Journal
of Organizational Change Management, 8(2),
3–16.
Miles,M.P.,Hazeldine,M.F.,&Munilla,L.S.
(2004). The 2003 AACSB accreditation standards and implications for business faculty:A
shortnote. JournalofEducationforBusiness,
80, 29–34.
Pastore,J.M.,Jr.(1989).Developinganacademic
accreditationprocessrelevanttotheaccounting
profession.CPAJournal,159(5),18–26.
Porter, L.W., & McKibbin, L.W. (1988). Management education and development: Drift
and thrust into the 21st century? New York:
McGraw-Hill.
Roller, R. H., Andrews, B. K., & Bovee, S. L.
(2003). Specialized accreditation of business
schools:Acomparisonofalternativecosts,benefits,andmotivations.JournalofEducationfor
Business,78,197–204.
Slone, R. R., & LaCava, J. (1993). Responding
tothenewB-schoolchallenges:Anin-process
observation.JournalofOrganizationalChange
Management,6(1),64–71.
Yin, R. K. (2003). Case study research: Design
andmethods(appliedsocialresearchmethods).
ThousandOaks,CA:Sage.
APPENDIX
AssociationtoAdvanceCollegiateSchoolsofBusiness(AACSB)InternationalAccreditationCost
SurveyQuestions
1. YouhavebeenidentifiedasanAACSBInternationalmemberschoolinoneofthefollowingcategories.Selecttheonethat
bestdescribesyourschool:
_____
_____
_____
_____
Recentlyearnedinitialaccreditation(last18mo.)
Currentlyincandidacypartnershipin_____yearofprocess(Fillintheblank.)
Havecompletedselfevaluationreportandareawaitingpeer-reviewteamvisit
Recentlycompletedpeer-reviewteamvisitandareawaitingaffirmationbyIAC
2. Howmanyyearswasyourschoolengagedintheaccreditationprocess?
3. WhatpromptedyourschooltoseekinitialaccreditationbyAACSBInternationalasopposedtoanalternativeaccreditingagency?
(Pleaseprovideonlythetopthreeprioritiesifyouelecttogivemultiplereasons.)
4. Duringtheaccreditationprocess,forthefollowingcategorieswhatnewdirectcostsdidtheschooloruniversityincurinpursuitof
accreditation?(Pleaseprovideadollarrangeordollarpointestimate.)
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a. Facultypositions(total):$___________peryear
b. Technologyinvestmentforfaculty:$____________
c. Technologyinvestmentforstudents:$_____________
d. Facultyprofessionaldevelopment:$____________peryear
e. Newfacultypositions:_________;Averageperline$____________peryear
f. Professionaltravelexpenditures(ifseparatefromitemd):$___________
g. DuesanddirectexpendituresforattendanceatAACSBmeetings:$___________
h. AveragenumberoffacultyattendingAACSBmeetingsperyear:________
i. Independenttravelbudgetfordean?_____;Ifyes,amount:$_________
j. Estimateofdirectcostsassociatedwithpeer-teamvisit:$____________
k. Didyourschoolinviteconsultant(s)tocampusforreview?________
Ifyes,whatwerethetotaldirectexpendituresfortheconsultants?$__________
l. Didyourschoolconductamockreview?_________
Ifyes,whatwereyourdirectcostsassociatedwiththemockreview?$____________
m. Directinvestmentbytheuniversitytoenhancebusinesslibraryholdingsorinformationaccess:$___________peryear(average)
n. Estimatedirectrecruitmentcoststofillfacultyslotsessentialtoaccreditationefforts:$____________peryear
(Donotincludesalaries.)
o. Other?Pleasespecifybycategoryandcostsbelow.
5. Whatnewindirectcostsdidtheschoolincurinpursuitofaccreditation?Examplesareprovided;pleaseaddthosethatyoucanidentify.
a. Remodelingorrefurbishingbuildings,offices,lobbies,receptionareas:$__________
b. Upgrading:$__________
c. Other?Pleasespecifybycategoryandcostsbelow.
6. Ofallcostsidentifiedabove,weretheyfullyanticipatedintheaccreditationplansubmittedtoAACSB?_________
Ifno,inwhatareasdidcostsexceedestimates,andinwhatareasdidcostsfallbelowprojections?
Aboveetimates
Belowestimates
a.
b.
c.
d.
e.
a.
b.
c.
d.
e.
______________________
______________________
______________________
______________________
______________________
______________________
______________________
______________________
______________________
______________________
7. CanyoumakeanygeneralizationsaboutestimatingcostsassociatedwithseekingAACSBaccreditation?Ifso,whatarethese?
8. Whattypesofcostswerenotconsideredinyoursubmittedplanbutbecameimportantoressentialtosuccessintheprocess?
Pleasespecifybycategoryandcosts.
9. Werethecostsassociatedwiththeprocesseveramajorobstacletocompletingtheprocess?__________Ifyes,pleaseexplain.
10. WhatsuggestionscanyouofferthatmayhelpothersgainbettercontrolofcostsintheAACSBInternationalaccreditationprocess?
May/June2009
289
ISSN: 0883-2323 (Print) 1940-3356 (Online) Journal homepage: http://www.tandfonline.com/loi/vjeb20
Applying for Initial AACSB Accreditation: An
Exploratory Study to Identify Costs
Kirk C. Heriot , Geralyn Franklin & Walt W. Austin
To cite this article: Kirk C. Heriot , Geralyn Franklin & Walt W. Austin (2009) Applying for Initial
AACSB Accreditation: An Exploratory Study to Identify Costs, Journal of Education for Business,
84:5, 283-289, DOI: 10.3200/JOEB.84.5.283-289
To link to this article: http://dx.doi.org/10.3200/JOEB.84.5.283-289
Published online: 07 Aug 2010.
Submit your article to this journal
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Download by: [Universitas Maritim Raja Ali Haji]
Date: 11 January 2016, At: 22:54
ApplyingforInitialAACSBAccreditation:
AnExploratoryStudytoIdentifyCosts
Downloaded by [Universitas Maritim Raja Ali Haji] at 22:54 11 January 2016
KIRKC.HERIOT
COLUMBUSSTATEUNIVERSITY
COLUMBUS,GEORGIA
GERALYNFRANKLIN
UNIVERSITYOFSOUTHFLORIDA
ST.PETERSBURG,FLORIDA
WALTW.AUSTIN
MERCERUNIVERSITY
MACON,GEORGIA
ABSTRACT.Theauthorsidentifiedthe
typeandmagnitudeofcostscollegesand
schoolsincurwhenseekingAssociationto
AdvanceCollegiateSchoolsofBusiness
(AACSB)Internationalaccreditation.This
issueisimportanttothe156schoolsandcollegescurrentlyseekinginitialaccreditation
byAACSBandtothethousandsofschools
worldwidethatcouldseekaccreditation.
AlthoughthechangesintheAACSBaccreditationstandardsopenedthedoortomany
smallerteaching-orientedschools,therevised
standardsmayinduceschoolswithlimited
resourcestoseekaccreditation.Theauthors
identifysignificantcostsinbecomingaccreditedandaconsiderableincreaseinannual
operatingcoststomaintainaccreditation.The
10schoolsinthepresentstudyexperienced
1-timeinitialexpendituresandincreased
annualexpenses.Businessschooldeansand
universityadministratorsneedtobeawareof
theinitialcostsofaccreditationalongwith
theincreasedannualcosts.
Keywords:accreditation,Associationto
AdvanceCollegiateSchoolsofBusiness,
businesseducation
Copyright©2009HeldrefPublications
O
rganizations must deal with
change as an inevitable reality
of the dynamic world in which they
operate. The implications of change
are particularly true for institutions
engagedinbusinesseducation(Kemelgor, Johnson, & Srinivasan, 2000).
Among the important issues that an
academicorganizationsshouldconsiderarethe(a)costsand(b)benefitsof
changing their programs. One important issue confronting many smaller
business schools is whether to change
from being unaccredited to becoming
an Association to Advance Collegiate
SchoolsofBusiness(AACSB)Internationalaccreditedschool.
AACSBhastwicemodifieditsoriginal 1919 standards, once in 1991 and
more recently in 2003 (AACSB International,2007).Priortotheadoptionof
themission-orientedstandardsin1991,
AACSB membership consisted mostly
of larger research-oriented business
schools. The revision of the standards
in 1991 provided an opportunity for
a school with a teaching emphasis to
pursueAACSBaccreditationaslongas
teachingwasafundamentalpartofthe
school’smission(AACSBInternational,
2007). According to our conversations
withAmyRoberts,senioraccreditation
associate for AACSB, more business
schools are responding to the change
in standards by seeking initialAACSB
accreditation. There are currently 201
schoolsinthecandidacyprogramseekingaccreditation.
Most of the recent research about
AACSBaccreditationhasexploredtopicsaboutthestandardsandtheeffectsof
thechangesincluding(a)perceptionsof
businessschooldeansabouttherevision
ofthestandardsin1991(Mayes,Heide,
&Smith,1993);(b)changesinfaculty
workloads (Henninger, 1998); (c) the
relative emphasis placed on teaching,
research, and service (McKenna, Cotton, & Van Auken, 1995); and (d) the
impact that changes in standards may
haveonbusinessfaculty(Miles,Hazeldine,&Munilla,2004).Thebenefitsof
AACSB accreditation were adequately
addressedpriortothechangeinthestandards in 1991. These benefits include
certificationofstandardsofexcellence,
signalingqualitytostudents,andhigher
facultysalaries(Pastore,1989).
Yet, the benefits of AACSB
accreditation are not free. Schools
seeking initial accreditation may need
tochangeprograms,curricula,staffing,
administration, and facilities, any of
which may entail significant costs. It
comesasasurprisetousthatnostudy
has investigated issues related to the
costsofAACSBaccreditation.McKee,
Mills,andWeatherbee(2005)suggested
that some business school deans may
seeAACSB accreditation as necessary
or inevitable, rather than a strategic
alternative that needs to be evaluated
May/June2009
283
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before being pursued. With such a
mindset,businessschooldeansmaynot
conductacost–benefitanalysis.
Thepurposeofthepresentstudywas
to identify the type and magnitude of
costs that colleges and schools incurred
when seeking AACSB accreditation.
This issue is particularly important to
the schools seeking initial accreditation
and to AACSB. At present, there are
560 AACSB-accredited schools worldwide;however,therearemorethan2,000
schools or colleges of business in the
United States alone, with thousands of
more potential member schools worldwide (AACSB International, 2009).
Thus,thepotentialnumberofprograms
thatmaybeaffectedbythecostsofinitialaccreditationissignificant.
LiteratureReview
Mostoftheresearch-basedarticleson
AACSBaccreditationfocusonthevalue
ofbusinesseducationwithanemphasis
onhowaschoolcansuccessfullyteach
businessskillsandconceptswhileconducting worthwhile business research.
Researchabouttherevisiontothestandardsin1991andinitialaccreditationis
rare, whereas research into the cost of
initialaccreditationisnonexistent.
Mayesetal.(1993)conductedasurvey of business school deans to assess
their perceptions of the 1991 AACSB
accreditation standards. Their research
classified schools as Category I, II, or
III. Category I schools are accredited
doctoral-degree granting schools with
accredited undergraduate and masters’
programs. Category II schools consist
of accredited schools without doctoral
programs,andCategoryIIIschoolsare
nonaccredited schools. These categorieswerecreatedonthebasisofPorter
and McKibbin’s (1988) classification.
Although the categories do not distinguish between accredited and nonaccredited programs with and without
masters’ programs, they are still useful
as a basis for comparison. Perhaps the
most interesting finding of the present
study was that deans from nonaccredited business schools anticipated that
AACSBaccreditationwouldchangethe
resourcesallocatedtotheirbusinessprograms. Category III deans anticipated
convertingpart-timeintofull-timeposi284
JournalofEducationforBusiness
tions. They also expected to increase
resourcesfordisciplinaryresearch.Itis
clear that each of these changes would
increase the costs of operating their
businessprograms.
Cotton, McKenna, Van Auken, and
Yeider(1995)askeddeansofaccredited
andnonaccreditedcollegiateschoolsof
business to offer their perspectives on
the impact of the change in AACSB
accreditation standards on the mix of
teaching, research, and service. Cotton et al. concluded that accredited
schools and schools seeking accreditation“sawnomandateforchangeinthe
new AACSB accreditation standards”
(p. 10).Alternatively, deans from nonaccredited schools who did not anticipate seeking accreditation believed
that they would have to change if they
were to meet the new standards. Their
responses were directly related to their
perceptions of the emphasis that they
wouldneedtoplaceonresearch.Ironically,deansfromnonaccreditedschools
seekingaccreditationbelievedthatthey
could now achieve accreditation with
more emphasis on teaching and less
emphasisonresearch.
Slone and LaCava (1993) used an
in-process observation of the efforts
of Boise State University to highlight
how its program had responded to the
new business school challenges. Slone
andLaCavapointedoutthattheircomprehensive assessment of their undergraduateprogramledtoanewstrategic
focus and a process for implementation.Morethansimplyfocusingoncosmetic issues that gave the appearance
of improvements, Slone and LaCava’s
newdeanledtheschoolonaprocessof
changeanddiscoverythatyieldedseveralusefulinsights.SloneandLaCava
discussed benefits of accreditation and
ways to achieve continuous improvement;however,theydidnotaddressthe
costsofchange.
Roller,Andrews,andBovee(2003),ina
studyofthebenefitsofaccreditationconducted among deans atAACSB schools
and non-AACSB schools, nominally
addressedthecostsofAACSBaccreditation. Roller et al.’s study indicated that
deansareawarethatadditionalcostsincur
when achieving accreditation; however,
Rolleretal.didnotprovidedetailsabout
thetypeandmagnitudeofthesecosts.
InastudyofCanadiandeansonthe
perceived value of accreditation versus
the real value of accreditation, McKee
etal.(2005)acknowledgedthataccreditationmayentailsignificantcosts.They
noted that a number of Canadian business schools were at some stage of
AACSB accreditation in 2005, in spite
oftheheavycosts(financialandhuman
resources)involvedinaccreditationand
maintenance. One Canadian business
deanestimatedthataccreditationwould
costhisschoolasmuchas$100,000.
Thus, although there is ample evidence that deans know that achieving
accreditationiscostly,thereisnosystematicresearchthatidentifiesspecificcosts
and their magnitude in achieving initial
AACSB accreditation. The purpose of
thepresentarticlewastoaddressthecost
sideofthecost–benefitparadigm.
METHOD
Yin (2003) identified three designs
thatresearcherscommonlyuse:exploratory,descriptive,andexplanatory.The
choiceoftheresearchdesigndependson
how much the researcher knows about
the issue (Creswell, 2004; Yin). Creswell posits that exploratory research
is well suited to situations in which
the research problem is difficult to
delimitandthoseinwhichtheresearch
problemisnotwellknown.Theobjective is to collect as much information
as possible. Exploratory research is a
qualitativetechniquethatelicitsdetailed
information in an effort to understand
theuniquenessofasituation(Creswell;
Yin).Exploratoryresearchrangesfrom
informal, using secondary data and
informal discussions with participants,
to more formal, using in-depth interviews, focus groups, case studies, or
pilot studies. In the present study, we
used an exploratory research method
because we had limited theoretical
knowledge about the costs associated
withinitialAACSBaccreditation.
Participants
All participants in the study were
deansselectedtoparticipateinthestudy
on the basis of two criteria. First, one
of the authors is a dean and knew the
potential participants well enough to
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discuss the study with them and ask
themtoparticipate.Werealizedthatthe
exploratorynatureofthedesignwould
require considerable effort by the participants to complete our open-ended
survey.Therefore,wewantedtobesure
that a dean was informed adequately
aboutthelevelofcommitmentrequired
before committing to participate in the
study.Second,allofthedeansarecurrentlyorpreviouslyweretheindividual
responsibleforinitialaccreditationwith
AACSB at their respective institutions.
Eachofthemwasinapositiontoprovide details about initial accreditation
costs (Creswell, 2004). Demographics
of the schools in the present study are
presentedinTable1.
Deansfrom10schoolsparticipatedin
theexploratorystudy.Atthetimeofthe
data collection, five schools had been
accredited in the past 18 months. One
school was a candidate. Four schools
hadcompletedtheirself-evaluationand
were awaiting the peer-review visit.
There were seven public schools and
three private schools. The enrollments
inthesecollegesanduniversitiesranged
from 2,400 students to almost 7,700
students,withanaverageenrollmentof
3,975 students. The universities were
located along the east coast and the
southwesternpartoftheUnitedStates.
The participating colleges or schools
ofbusinesshadbetween220and1,500
students enrolled in their graduate and
undergraduate programs, with an average enrollment of 734 students. Two
of the schools did not have an MBA
programatthetimethattheyappliedfor
AACSBaccreditation.
study, the dean at a school of business
seekingaccreditation,andamemberof
theboardofAACSB;theinstrumentwas
reviewedbytheotherauthors.Because
there is scant evidence of the types of
costsincurredintheinitialaccreditation
process, we chose not to use multiplechoice questions that may omit costs
thatwerenotincludedonthequestionnaire(Yin).Instead,theinstrumentwas
designed to prompt the participants to
identifyallofthecoststhatwereassociatedwiththeirrespectiveaccreditations.
Thus,thesurveyusedopen-endedquestionswithminimalguidanceotherthan
simpleinstructions.
intotwocategories:(a)thosethatwere
primarily one-time expenditures and
(b) those that increased annual operating costs. The one-time costs such
as upgrading infrastructure are those
that refer to improving technology or
costs associated with the accreditation process itself. The second type
of cost includes the annual increased
operating costs, such as additional
faculty,professionaldevelopment,ongoingmaintenanceoftechnology,and
AACSBannualdues.
RESULTS
With the exception of the costs of a
peer-reviewteamvisit,externalconsultantswerethemostcommonlyincurred
cost,with9ofthe10schoolsreporting
this cost. Schools in candidacy clearly
valuedhavinganexternalreviewerwho
was highly knowledgeable of AACSB
standardstoidentifyareasforimprove-
IdentificationofCosts
andAmounts
Tables 2 and 3 list the costs participating schools reported that they
incurredwhenseekingAACSBaccreditation. These costs may be divided
One-TimeCosts(CapitalCosts)
Consultants
TABLE1.ParticipatingCollegesandUniversities
College
A
B
C
D
E
F
G
H
I
J
Location
Student
enrollment
Southeast
Mid-Atlantic
Southwest
Mid-Atlantic
Southeast
Southwest
Northeast
Northeast
West
Northeast
3,000
4,300
3,400
7,680
4,500
2,600
4,000
3,870
4,000
2,400
Business
student
Yearof
enrollment accreditation
380
1,000
596
1,533
700
780
1,253
280
600
222
2005
2006
2005
2005
—
2005
2004
2003
2004
2004
Public
orprivate
Public
Public
Public
Public
Public
Public
Private
Private
Public
Private
DataCollection
Yin (2003) suggested that interview-
ing people in their own environment
could improve the quality of their
answers. However, conducting interviews in 10 different, widely dispersed
locations across the United States
was not feasible. In addition, many of
the questions pertaining to monetary
amountswerelikelytorequireresearch
and thus were unlikely to be answered
in interviews. Hence, we developed a
surveyinstrument,whichisshowninthe
Appendix. The instrument was initially
developed by an author of the present
TABLE2.One-TimeCosts(N=10)
Costelement
Useof
consultants
Mockreview
Peer-review
team
Infrastructure
upgrades
Schools
Lowest
reporting expenditureof Greatest
M
Mdn
expenditure schoolswithan expenditure expenditure expenditure
(%)
expenditure($)
($)
($)
($)
9
7
1,000
1,250
12,000
12,000
5,217
7,207
5,000
8,000
10
3,500
18,000
8,530
7,000
4
5,000
60,000
33,750
35,000
May/June2009
285
TABLE3.IncreasedAnnualExpenditures(N=10)
Annualincreased
costs
Schools
Lowest
reporting expenditureof Greatest
M
Mdn
expenditure schoolswithan expenditure expenditure expenditure
(%)
expenditure($)
($)
($)
($)
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Facultysalaries
Recruitment
Technology
Professional
development
Libraryholdings
andinformation
access
AACSBInternational
duesandconference
participation
9
9
6
142,250
2,500
9,000
800,000
15,000
45,000
319,088
7,056
29,167
222,500
5,500
28,000
10
10,000
60,000
32,075
27,500
5
4,000
25,000
12,500
5,000
7
3,000
40,000
13,857
8,000
Note.AACSB=AssociationtoAdvanceCollegiateSchoolsofBusiness.
ment. The lowest reported cost was
$1,000, whereas the highest reported
cost was $12,000 (M = $5,217). The
cause of the variation in costs among
schools was not discernable from the
survey instrument. However, possible
causesare(a)differentfeespaidtothe
consultants, (b) schools having multiplevisitsbyconsultants,or(c)differences in expenses and travel costs of
theconsultants.
MockReview
Inall,7ofthe10schoolsinthestudy
reported that they conducted a mock
review. The lowest reported cost of a
mock review was $1,000, whereas one
school reported spending $12,000 (M
=$7,207).
PeerReviewTeam
All 10 schools in the study had
received a peer-review team visit or
had been budgeted for one. The lowest reported cost was $3,500, and the
highest reported cost was $18,000 (M
=$8,530).
InfrastructureUpgrades
In all, 4 of the 10 schools reported
refurbishingorupgradingtheirphysical
plant. These expenditures ranged from
$5,000to$60,000.
286
JournalofEducationforBusiness
faculty to meet AACSB faculty sufficiencyandqualificationstandards.One
school’s faculty was adequate and did
notincuranyfacultyrecruitmentcosts.
Forschoolsincurringcosts,theyranged
from $2,500 to $15,000, with a mean
annualcostof$7,056.
AnnualTechnologyImprovementsfor
Faculty
Of the 10 schools that participated in the present study, 7 reported
increased expenditures on technology
forfacultyandstudents.Theseexpendituresrangedfrom$9,000to$45,000
per year, with an average increase of
expenditure of $29,167. The school
with the greatest increase in annual
expenditures reported acquiring databasesforfacultyresearch.
IncreasedAnnualExpenditures
ProfessionalDevelopment
Having far greater economic significance than one-time costs were the
increased annual expenditures, which
aschoolmustanticipateandincludein
futurebudgets.ThesecostsaresummarizedinTable3.
All 10 schools in the study reported
increasedcostsforprofessionaldevelopment.Thesecostsrangedfrom$10,000
to$60,000(M=$32,075).
IncreasedNumberofFaculty
andSalaries
Thisitemwasthelargestcostidentifiedbytheparticipantsinthestudy.Of
the10schoolsrespondingtothesurvey,
8 reported that they had increased the
numberoftheirfaculty.Oneschooldid
not answer the question, although it
reported an annual increase in faculty
cost.Last,onlyoneschoolreportednot
increasing the size of its faculty. Of
theeightschoolsthatprovidednumbers
on hiring additional faculty, the number of faculty members ranged from
2 to 10, with an average of 4 faculty
members. In all, 9 of the 10 schools
reportedthattheyhadincreasedannual
facultycostsrangingfrom$142,250to
$800,000,withanaverageof$319,088.
Theschoolthatreportednoincreasesin
numberswasastateschoolwithamandatoryhiringfreezeineffect.
FacultyRecruitmentCosts
Closely related to the increase in
faculty salaries was that of the annual
costsofrecruitingnewandreplacement
LibraryEnhancementandInformation
Access
In all, 5 of the 10 schools reported
direct investments in the institution’s
library to enhance the business collection or improve access to information.
Oftheschoolsmakingexpenditures,the
lowestexpenditurewas$4,000andthe
highestwas$25,000.Themeanexpenditure for those schools making them
was$12,500.
AnnualAACSBDuesandCostsof
AttendingMeetingsandSeminars
In addition to the increased annual
costs described previously, being in
candidacy and subsequently accredited
entailsmembershipfeesand,especially
during the candidacy period, increased
annual costs to attend accreditation
seminars and workshops. In addition,
9 of the 10 schools that participated
in the study indicated that between
one and six persons attended AACSB
meetings and seminars per year, with
an average of three persons attending.
Onlysevenoftheschoolsprovidedcost
dataonduesandattendance.Thecosts
reported ranged between $3,000 and
$40,000, with an average annual cost
of$13,857.
OpportunityCosts
Oneschoolindicatedthatinaddition
totheout-of-pocketcostsincurredwhen
pursuingaccreditation,ithadincurreda
major opportunity cost as well. It had
reduced programs, which resulted in
an annual drop in tuition revenue of
$400,000peryear.
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EffectivenessofCostPlanning
In preparing to enter candidacy and
subsequently maintain accreditation, a
realisticknowledgeofthetypesandmagnitudesofthecostslikelytobeincurred
is essential for making an informed
decisionaboutseekingAACSBaccreditation. Deans were asked to identify
areas in which costs exceeded or were
below estimates. Table 4 reports the
cost elements in which the actual cost
differedfromthatoftheestimatedcost
and shows the number of schools that
missedtheirestimates.
Inall,6ofthe10schoolsinthesurvey
indicatedthattheyhadnotfullyanticipatedthecostsidentifiedinthesurvey.
Failure to correctly forecast costs may
leadtoschoolsbeingunabletocontinue
andcompletetheaccreditationprocess.
Inaddition,2ofthe10schoolsreported
that costs became a major obstacle to
completing the accreditation process.
One of these two schools reported that
its president became concerned about
potential revenue loss ($400,000 per
year), and the second school reported
thatfindingqualifiedfacultyinbudgetaryrestrictionswasdifficult.Particularlynoteworthyisthattheactualcostfor
addingadditionalfacultydidnotexceed
theforecastedcostatanyoftheschools,
andattwoschoolsitwasactuallylower
thanprojected.
DISCUSSIONAND
IMPLICATIONS
Although the accreditation standards
changed, shifting some of the focus
away from research, achieving initial
accreditation remains a costly endeavor. Every school in the study experienced both one-time expenditures and
increasedannualexpenses.Thus,teaching institutions that are considering
AACSB accreditation should be aware
that the decision is fraught with economic consequences not only for the
businessschool,butfortheinstitutionas
awhole.Universityadministratorsneed
to be fully aware of the significant upfront costs of accreditation, along with
theincreasedannualexpenditures,while
facingapotentialdecreaseintuitionrevenuefromthebusinessschool.Although
some of these costs can be reasonably
anticipated, the unexpected size of the
anticipatedcostsandthosecoststhatare
notanticipatedcreateacriticalfinancial
decision for schools seeking accreditation.Asteachinginstitutions(publicand
private)examinethisissue,itisevident
TABLE4.CostsThatDifferedFromExpectations
Costelement
AACSBInternational
duesandconferences
Mockreview
Assuranceoflearningprocessa
Professionaldevelopment
Technology
Consultants
Additionalfaculty
Numberof
schools
underestimating
cost
Numberof
schools
overestimating
cost
3
2
2
1
1
1
0
0
0
0
0
0
0
2
Note.Respondentsweregiventheopportunitytomakecommentsinadditiontoprovidingaresponse
totheinstrument.AACSB=AssociationtoAdvanceCollegiateSchoolsofBusiness.
a
Indicatesassuranceoflearningwasnotincludedinthesurvey.
that AACSB accreditation may have a
significant financial impact not only on
the business programs, but also on the
rest of the college or university. Thus,
schools that are considering accreditationmustweighthecostsandbenefits.
Thefindingsofthepresentstudymay
appear obvious, especially to faculty
and administrators at AACSB accredited schools. However, the findings
maybemuchlessapparenttoschools
considering accreditation. The revised
AACSBaccreditationstandards,onthe
basisofaschool’smission,mayinduce
teaching institutions that would never
have considered accreditation under
thepriorstandardstoattempttheprocess.Considerthedifferencesbetween
traditional research-oriented schools
and teaching-oriented schools. Traditional research-oriented schools typicallyhavesignificantlygreaterbudgets
with funds routinely provided for the
itemsnecessarytomaintainaccreditation,whereassmallerteaching-oriented
schoolsmustbeginfundingitemspreviouslyunfundedandcontinuefunding
them on an annual basis. Thus, the
resources to achieve initial accreditation and maintain it may prove problematicintheshortandlongterm.
Itisclearthatcollegesandschoolsof
business pursue AACSB accreditation
for different reasons. Some colleges
andschoolsseeaccreditationasinevitable, whereas others pursue AACSB
accreditationforqualitypurposes,asa
defensivestrategy,oratthebequestof
theirleadership.Nonetheless,thepresentstudy’sfindingsindicatedthatinitial
accreditationbyAACSBisanendeavor
that incurs costs. Hence, accurate cost
identification and realistic estimation
of increased annual costs have enormousimplicationsforaschoolseeking
initial accreditation because it means
thataccreditationmaybeshort-livedif
fundsarenotavailabletomaintainthe
high-quality programs demanded by
AACSBstandards.
NOTE
KirkC.HeriotistheRayandEvelynCrowley
Endowed Chair of Entrepreneurship at Columbus State University. He teaches entrepreneurship small business management, and strategic
management at the undergraduate and graduate
levels. His research includes business education,
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determinants of new venture creation, and entrepreneurshipinchallengingenvironments.
Walt W. Austin is a professor of accounting
attheStetsonSchoolofBusinessandEconomics
and teaches courses in accounting at the undergraduatelevelandoneofthecoursesintheMBA
program.Heregularlyservesasanexpertwitness
andlegalconsultantonaccountingmatters.
Geralyn Franklin is the dean of the college
ofbusinessattheUniversityofSouthFlorida–St.
Petersburg.Shepreviouslyservedasthedeanof
theschoolofbusinessattheUniversityofTexas
of the Permian Basin. She is a member of the
board ofAACSB International and a past president of the United States Association for Small
BusinessandEntrepreneurship.
Correspondence concerning this article should
beaddressedtoKirkC.Heriot,TurnerCollegeof
Business, Columbus State University, 4225 UniversityAvenue,Columbus,GA31907,USA.
E-mail:kirk.heriot@gmail.com
REFERENCES
Association to Advance Collegiate Schools of
Business (AACSB) International. (2007). Eligibility procedures and standards for business
accreditation (Rev. ed.). Tampa, FL: Author.
Retrieved February 1, 2007, from http://www.
aacsb.edu/accreditation/standards.asp
AACSBInternational.(2009).Accreditedschools.
288
JournalofEducationforBusiness
Tampa,FL:Author.RetrievedMarch11,2009,
from http://www.aacsb.edu/accreditation/
accreditedmembers.asp
Cotton, C. C., McKenna, J. F., Van Auken, S.,
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Creswell, J. W. (2004). Educational research:
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Henninger,E.A.(1998).TheAmericanassembly
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APPENDIX
AssociationtoAdvanceCollegiateSchoolsofBusiness(AACSB)InternationalAccreditationCost
SurveyQuestions
1. YouhavebeenidentifiedasanAACSBInternationalmemberschoolinoneofthefollowingcategories.Selecttheonethat
bestdescribesyourschool:
_____
_____
_____
_____
Recentlyearnedinitialaccreditation(last18mo.)
Currentlyincandidacypartnershipin_____yearofprocess(Fillintheblank.)
Havecompletedselfevaluationreportandareawaitingpeer-reviewteamvisit
Recentlycompletedpeer-reviewteamvisitandareawaitingaffirmationbyIAC
2. Howmanyyearswasyourschoolengagedintheaccreditationprocess?
3. WhatpromptedyourschooltoseekinitialaccreditationbyAACSBInternationalasopposedtoanalternativeaccreditingagency?
(Pleaseprovideonlythetopthreeprioritiesifyouelecttogivemultiplereasons.)
4. Duringtheaccreditationprocess,forthefollowingcategorieswhatnewdirectcostsdidtheschooloruniversityincurinpursuitof
accreditation?(Pleaseprovideadollarrangeordollarpointestimate.)
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a. Facultypositions(total):$___________peryear
b. Technologyinvestmentforfaculty:$____________
c. Technologyinvestmentforstudents:$_____________
d. Facultyprofessionaldevelopment:$____________peryear
e. Newfacultypositions:_________;Averageperline$____________peryear
f. Professionaltravelexpenditures(ifseparatefromitemd):$___________
g. DuesanddirectexpendituresforattendanceatAACSBmeetings:$___________
h. AveragenumberoffacultyattendingAACSBmeetingsperyear:________
i. Independenttravelbudgetfordean?_____;Ifyes,amount:$_________
j. Estimateofdirectcostsassociatedwithpeer-teamvisit:$____________
k. Didyourschoolinviteconsultant(s)tocampusforreview?________
Ifyes,whatwerethetotaldirectexpendituresfortheconsultants?$__________
l. Didyourschoolconductamockreview?_________
Ifyes,whatwereyourdirectcostsassociatedwiththemockreview?$____________
m. Directinvestmentbytheuniversitytoenhancebusinesslibraryholdingsorinformationaccess:$___________peryear(average)
n. Estimatedirectrecruitmentcoststofillfacultyslotsessentialtoaccreditationefforts:$____________peryear
(Donotincludesalaries.)
o. Other?Pleasespecifybycategoryandcostsbelow.
5. Whatnewindirectcostsdidtheschoolincurinpursuitofaccreditation?Examplesareprovided;pleaseaddthosethatyoucanidentify.
a. Remodelingorrefurbishingbuildings,offices,lobbies,receptionareas:$__________
b. Upgrading:$__________
c. Other?Pleasespecifybycategoryandcostsbelow.
6. Ofallcostsidentifiedabove,weretheyfullyanticipatedintheaccreditationplansubmittedtoAACSB?_________
Ifno,inwhatareasdidcostsexceedestimates,andinwhatareasdidcostsfallbelowprojections?
Aboveetimates
Belowestimates
a.
b.
c.
d.
e.
a.
b.
c.
d.
e.
______________________
______________________
______________________
______________________
______________________
______________________
______________________
______________________
______________________
______________________
7. CanyoumakeanygeneralizationsaboutestimatingcostsassociatedwithseekingAACSBaccreditation?Ifso,whatarethese?
8. Whattypesofcostswerenotconsideredinyoursubmittedplanbutbecameimportantoressentialtosuccessintheprocess?
Pleasespecifybycategoryandcosts.
9. Werethecostsassociatedwiththeprocesseveramajorobstacletocompletingtheprocess?__________Ifyes,pleaseexplain.
10. WhatsuggestionscanyouofferthatmayhelpothersgainbettercontrolofcostsintheAACSBInternationalaccreditationprocess?
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