A Degree of Doubt at NCCU

North Carolina Central University School of Business in Durham, N.C., recently ousted Dean Benjamin Newhouse for losing the school's accreditation with the Association of Collegiate Business Schools & Programs (ACBSP) by failing to send in the proper paperwork. Newhouse had headed the school since September, 2004. Now, as administrators scramble to renew the ACBSP approval they've held since 1994, students worry that their MBA degree will be devalued in the marketplace.

On Dec. 13, university Chancellor James Ammons received a letter from the ACBSP notifying him of the imminent expiration of the school's accreditation. At that time, it was too late to meet the deadline. "It was extremely disturbing," says Ammons. "After I looked into the matter, I decided that there needed to be new leadership in the school of business," he says, adding that Newhouse made the conscious decision not to pursue the accreditation. The school, which must reapply for accreditation every 10 years, had already received a one-year extension on the process.

Newhouse says the college's preparation for the more prestigious Association to Advance Collegiate Schools of Business (AACSB) accreditation is the reason he didn't pursue reaccreditation with the ACBSP. "You can't do two things at once," says Newhouse. "It was [Ammons'] call, his decision, and I accept the decision."

TWO-TIER ATTACK.  B-school accreditation is the process by which outside organizations review schools' policies and procedures to make sure they're in line with educational standards. Having the approval of AACSB, widely considered to be the most respected international accreditation, gives a degree of prestige to a program. ACBSP, although respected, is a younger and less well-known organization than AACSB.

Bijoy Sahoo has been named interim dean of the B-school while the university launches a search for replacement for Newhouse, who has been offered eight months administrative leave before he can return to his tenured faculty position.

Since the school's accreditation expired at the end of 2005, NCCU administrators have been rushing to reapply for accreditation with the ACBSP before the next class graduates in the spring. Administrators are also continuing the AACSB accreditation process that was already in the works and could be completed in about a year.

CASE STUDY.  If students are forced to graduate without an accredited degree, some soon-to-be-graduates say job pickings could be slim. "People were worried about being able to transfer or having a worthless degree," says Kristen Hunter, a senior at the school. But with a little explanation in an interview, diligent students should have no trouble finding a job, Hunter adds.

On the brighter side, Hunter says participation in the school's student-advisory board has nearly tripled since the news broke about the loss of accreditation. She says students are doing all they can to help administrators complete the due diligence on the current accreditation paperwork for both organizations.

To mitigate the damage, NCCU administrators are explaining to students, and especially the school's top recruiters, that the reason for losing accreditation has nothing to do with any decreased quality in the program. Although Ammons says the school is expediting the process, the time frame for completing the reaccreditation remains fuzzy. "We just can't say to our students, faculty, or alumni exactly when it will be worked out," says Ammons.

For these NCCU business students, it has been a case study in how not to run an organization.

By Jeffrey Gangemi

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The Value of an MBA

Getting an MBA may give graduates a salary boost right off the bat, but what about long-term benefits? A recent study conducted by two Pace University Lubin School of Business professors yields some surprising results: CEOs with an MBA don't necessarily perform better than counterparts who have only undergraduate credentials. However, the study did find that having prestigious schools and/or an MBA degree on your résumé does generally net you better pay.

The study's authors, Aron Gottesman and Matthew Morey, compiled the results by examining CEOs of New York Stock Exchange-listed companies who had an undergraduate-level degree or higher. The CEOs' educational backgrounds were scored based upon the mean SATs or GMAT of their alma maters and then compared with their company performance measures, including return on equity and total sales, among other factors, over a two-year span. Results apply to both undergraduate and MBA programs.

The study focused on the following paradoxical conclusions: CEOs from more prestigious institutions performed no better than those from less prestigious institutions, and companies managed by CEOs with MBA or law degrees did no better than those with CEOs without graduate degrees. However, compensation is somewhat higher for CEOs who attend more prestigious schools, a disparity perhaps based on traditional assumptions that these credentials imply a superior intellect and performance ability.

ETERNAL QUESTION.  Gottesman and Morey say it's possible that CEOs from less prestigious schools gain additional skills from experiencing a more difficult climb up the corporate ladder and wanting success more than their Ivy League counterparts. Or it could be that exceptional managers, no matter what their academic pedigree, eventually rise to the top.

"With CEOs, even if they went to a lower-level school, that talent showed up," says Morey. Furthermore, the gap in years between graduation and achieving this top position may be significant enough to diminish any initial benefits of a superior education. The eternal question remains: Is the MBA worth it?

By Lindsey Gerdes

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