Financial struggles affecting universities across the United States have caused debate about whether business schools are cost prohibitive or cost savvy, especially for small liberal arts universities that lack large endowments and are highly dependent upon student enrolment. In other words, are they too expensive for small schools to operate? The presence of a business school necessitates hiring business faculty with comparatively high salary expectations.
This paper analyses the cost effectiveness of business schools at four small liberal arts universities.
Our results show that cost is most strongly correlated with class size and adjunct instruction as opposed to faculty salaries.
Thus, class size and the implementation of adjunct instruction can make having a business school not only affordable but also advantageous.
Business schools offer a way for universities with missions centred around developing the whole person through a liberal arts education to remain a going concern in such a volatile climate.
This paper uses proprietary data to analyse the cost of faculty in different disciplines.
