Research Area 4

Area 4 – Financial Sustainability and New Financing Models

Overview

Business schools are increasingly relying on entrepreneurially acquired revenue streams to fund their activities. A larger revenue base typically goes hand in hand with an increase in revenue volatility, while the corresponding buildup of delivery capacity often represents a quasi-fixed cost. As a consequence, business schools can be exposed to dangerous margin squeezes, which can potentially even threaten institutional survival. It follows that professional risk management is the other side of the coin of entrepreneurialism.

Oversight bodies are increasingly discovering the need to regulate risk-taking of higher education institutions. Some are currently experimenting with a risk-based regulation approach aiming to align regulatory scrutiny with the prevalence of risk taking (see e.g. HEFCE, TEQSA).
RSU activities on the topic of risk management have been represented at a special session of the EFMD Deans & Directors Meeting 2013 in Istanbul and have also motivated changes in the EQUIS documents.

2013 Risk Management Survey

The Deans Barometer 2013 was devoted to examining the current state of risk management in business schools. The results have been published in a special report and summarized in a Global Focus article.

“Good Practice” Guide for Risk Management of Business School

RSU has set up a task force to develop a “good practice” guide for risk management activities of business schools. The guide is intended to contribute to the further professionalization of risk management activities in business schools. It will be non-binding with no direct links to the EFMD accreditation systems. Members of the task force are deans, chief financial officers and academics with an interest in risk management. The final report will be published in 2015.