SCHOOL OF BUSINESS ADMINISTRATION
The University of Michigan School of Business Administration exemplifies much of the best in the sound development of management education. Throughout its history it has stood for rigorous analysis in basic disciplines along with practical applications of theoretical understanding. The School was established in 1924, and Edmund Ezra Day, chairman of the Economics department, became the first Dean of the new school. It was largely patterned after the Harvard Graduate School of Business Administration, but without the distinctive term "Graduate" in its name. Permission to use the name "Graduate School of Business Administration" on diplomas, official announcements, publications, transcripts, letterheads, news releases, and for other official purposes was not granted by the University until the 1960s.
In the meantime, the School went through three distinct phases. The first was from 1924 to 1944, a period of twenty years when the School only awarded graduate business degrees: the Master of Business Administration (M.B.A.) and the Doctor of Philosophy in Business Administration (actually presented by the Horace H. Rackham School of Graduate Studies). Enrollment was small, first reaching 200 in 1939, only to decline sharply during World War II. Following Dean Day's departure in 1926 to join the Rockefeller Foundation, Clare E. Griffin served as Dean for the remainder of the twenty-year period. In this formative time the School established a graduate degree and curriculum based on a "combined program," conducted primarily with the College of Literature, Science, and the Arts and the College of Engineering.
The Bureau of Business Research and the Bureau of Industrial Relations were also established before 1940. Dean Griffin presided when the Bachelor of Business Administration degree program was set up in 1942, and at a time when the School's program and faculty were adjusting to the special needs of a country at war. Initial plans were also being made at this time for a building that would eventually house the new School of Business Administration.
During the second phase in the School's history, Page 73Russell A. Stevenson served as Dean. This period extended from 1944 to 1960 and was marked by rapid increases in the enrollment in the Bachelor of Business Administration degree program and the admission of more undergraduate degree candidates than graduate following World War II. During Dean Stevenson's tenure the postwar enrollment peak for regular degree candidates reached a total of 1,249 in 1949, two-thirds of the enrollment being in the B.B.A. program and one-third in the M.B.A. program. Enrollment decreased sharply following the postwar peak with the undergraduate enrollment remaining larger than the graduate. Dean Stevenson led in gaining the necessary business and political support to assure legislative approval for the School's new building. He added to the faculty to meet the peak postwar demands and encouraged the faculty and bureaus to extend their activities to serve the needs of the state. This encouragement resulted in the first off-campus credit program, as well as in regular executive development programs and numerous special conferences and workshops.
In the third phase, beginning in 1960 and continuing into the seventies, the emphasis shifted back to the graduate level. The declining trend in graduate enrollment was sharply reversed; the M.B.A. clearly became the dominant degree, and graduate enrollment doubled between 1960 and 1971. Floyd A. Bond was Dean during this period. In this phase the off-campus programs were rationalized and made essentially extensions of the day program, having the same standards and admission requirements. This provided an evening M.B.A. program for well-qualified older students holding full-time employment. These enrollment shifts, along with changes in the application of behavioral science and quantitative methods to business, resulted in major revisions of the curriculum.
During this third period the School also developed a more vigorous Ph.D. program with a larger enrollment of highly-qualified candidates, a greatly expanded postgraduate continuing-management-education program with improved facilities and year-round operation, a distinguished Visiting Committee of Chief Executive Officers of leading corporations, more research and publication, better classroom and research facilities privately financed through School fund-raising efforts, greatly expanded scholarship and loan funds for students, improved business contacts through the extension of the School's national and international activity and influence, and more discretionary funding to provide that extra "margin of excellence."
Page 74Enrollment Growth. — Enrollment in the School of Business Administration was relatively small before World War II; the peak enrollment of 240 students was reached in 1939. For the next few years enrollment declined, reflecting the beginning pressures of World War II, and in 1943 only 6 students were registered for the master's program and 62 for the bachelor's program. There were also 130 special students, many of them under government contract from the Navy Supply Corps.
The return of World War II veterans to the campus brought enrollment to a new peak of 1,249 in 1949. In the next three years, it dropped more than 400, reaching 832 in 1952, but rebounded to 1,100 in 1954 with the return of the Korean War veterans. Following this increase, enrollment in both the B.B.A. and M.B.A. programs again dropped. Throughout the period after World War II and the Korean War, the B.B.A. program had the greater number of students.
When Dean Bond was appointed in 1960, campus enrollment was at its lowest point in fourteen years. Total enrollment was 924, including off-campus students numbering over 200. Registrations for the B.B.A. program continued to drop during the sixties, but the M.B.A. enrollment in both campus and off-campus programs increased significantly. By 1971 over 75 percent of the enrollment represented graduate students, including 958 master's candidates (589 on campus and 369 off campus), and 75 in the Ph.D. program. Students in the B.B.A. program, numbering 269, brought total enrollment to 1,302.
The temporary increases during the fifties appear to result from several circumstances: fluctuations in the numbers of returning servicemen, a special program given during the school years 1954-55 and 1955-56 for the Internal Revenue Service, and the initiation of off-campus M.B.A. work. Considering the effect of these special situations on enrollments, it was evident that maintaining satisfactory B.B.A. and M.B.A. enrollments in the basic daytime programs was a major problem during most of the period.
Off-Campus and Evening Offerings. — In May 1938 the faculty voted to offer selected business administration courses in the Detroit Study Center as part of the Extension Service. Although a standard schedule of courses was planned to allow progress toward the M.B.A. degree, the faculty ruled that 24 of the last 30 hours to be applied toward graduation had to be taken in Ann Page 75Arbor. Admissions to the evening classes were handled by the Extension Service.
In the fall of 1960 the faculty removed the residence requirement for those taking evening classes and allowed all work at the Detroit Study Center to count toward graduation.
By 1960, in addition to the Detroit program, classes were also being offered in Grand Rapids and in Midland. After the development of the Dearborn Campus, work was concentrated in that area. In 1963 central administration requested that the School extend the M.B.A. program to Flint.
By 1967 nearly all evening students were formally enrolled in the M.B.A. degree program. The same admissions standards were being applied to day and evening applications, and students were free to move from one program to another. Instruction was offered in Ann Arbor, Dearborn, and Flint, as well as on the University's educational TV system. The TV courses were channeled to three other locations where cooperating business firms furnished space in their own buildings. All instruction was given by regular full-time University of Michigan faculty.
Enrollment in the M.B.A. Evening Program continued to increase, serving the needs of a highly-qualified student body in southeastern Michigan. By 1971 students in the program numbered approximately 370. Fifty-three evening courses were offered during 1970-71.
Minority Enrollment. — Since the early sixties, the faculty of the School of Business Administration has paid increasing attention to the problems of interesting more minority students in business training. The first concerted step in this direction was taken in 1965, when the campus visitation program began to include colleges with predominantly Black student bodies.
In April 1966 Dean Bond appointed a special Ad Hoc Committee on Educational Programs in Business Administration for Negroes. This committee actively explored a number of proposals for interesting more members of minority groups, particularly Blacks, in preparing for business careers and in coming to the University of Michigan for their work.
In cooperation with other groups at the University, the School of Business Administration developed close contact with Tuskegee Institute. One result of this Page 76association was the faculty's approval of a special noncredit seminar to be staffed by our faculty and offered at Tuskegee Institute during the winter term of 1966-67.
Nine faculty members participated in the first seminar series. They traveled to Tuskegee over the weekend, without special compensation, where they lectured and held conferences with students in an effort to interest them in business careers. The seminar series was expanded during the second year and carried credit from Tuskegee Institute to students who participated. During the third year a senior professor from the School of Business Administration at Michigan was assigned to teach full-time in the Tuskegee program and to help recruit Black students for business careers. Regrettably, the program was terminated after officials of Tuskegee Institute had advised the School that student unrest at their institution made it too dangerous for their officials to assume responsibility for the safety of visiting faculty.
Paralleling the effort at Tuskegee, steps were taken toward building a continuing relationship with Howard, Fisk, and Atlanta Universities. Beginning in 1966, members of our faculty and staff made regular visits to these schools, often accompanied by currently enrolled Black students or a Black graduate of the School. Later a Black counselor was added to the School staff, and campus visits were extended to 27 schools selected primarily for their large Black enrollments. The School's Black Business Students Association has been particularly cooperative in recruiting prospective Black Students.
The problem of minority enrollment was not the most immediate concern of student activists during the late 1960s, but this issue was foremost in specific actions against the School in the spring of 1970. During the preceding years the School of Business Administration had been the target of several forays by "midnight raiders," who broke windows from the apparent idea that the School represented the "establishment." In the spring of 1970 student action at Michigan coalesced around minority enrollment, and a student strike was sponsored by the Black Action Movement (BAM).
The School was able to continue classes as usual, except for the presence of pickets, until the week of March 23. Early in that week BAM supporters, almost none of them business students, organized student rallies. Through the week these built up to mass demonstrations in the halls. Bulletin boards were destroyed, classes Page 77disrupted, fires set in wastepaper baskets, and fire alarms triggered. An "ammonia raid" severely limited the use of the building for academic purposes.
On March 26, a large examination was scheduled for late afternoon, and word had reached our students that a major disruption was planned. By this time the students in the School felt they had taken enough without retaliating. There was a rapidly rising determination to deal physically with the disrupters if they returned. Since most schools on campus had already closed, the Student Council asked the Dean and the Executive Committee to close the School of Business Administration immediately to avoid any direct conflict between the students. On Monday morning, March 30, 1970, adequate police protection was provided. Picketing was restricted to areas outside the building. The School opened and classes were held with normal attendance.
The School's cooperation was evident in the 1970-71 school year: all requests from minority students for financial aid were granted, although the requests of many other needy students were denied. In that year the average grant to minority students in the School of Business Administration was $3,175, while the average amount to other students receiving financial aid was $1,084.
A special approach was also developed to increase the enrollment of women students in the School. The campus visitation program was extended to include more women's colleges, and special brochures and recruiting efforts were made from the mid-sixties onward to attract women students. Special scholarship funds were also made available. These efforts to recruit women were more successful than the efforts to attract Blacks. By 1970 the women enrolled in the School represented more than 6 percent of the total, and the proportion showed signs of increasing rapidly.
Research, Publications, and Continuing Education. — Two bureaus oriented toward research, service, and continuing education were established in the School before 1940. The Bureau of Business Research assumed responsibility for coordinating the School's research, and the Bureau of Industrial Relations, through its workshops and seminars, became the major arm of a coordinated continuing education program.
Bureau of Business Research. — Prior to World War II the Bureau's role was largely confined to supporting and Page 78publishing faculty research. The support consisted primarily of assigning research assistants to work under faculty members with approved projects. An extension of this role was the special project to study department stores' operating results and practices, started in 1939 as a cooperative effort among the principal department stores in Michigan, excluding the large metropolitan areas. Stores outside the state were later added as a special group.
Following World War II more opportunities arose for sponsored research, and its administration was generally considered a responsibility of the Bureau of Business Research with faculty members assigned as project directors or principal investigators. Among the early sponsors of research were the Ford Motor Company and various governmental agencies. Studies included pilot marketing-research projects preliminary to national studies by Ford Motor Company and such comprehensive studies for governmental agencies as evaluating governmental procedures and policies for the purchase of tanks and automobiles. Business groups also sponsored major research projects in investment banking, the automotive parts market, and education for business leadership.
Individual companies provided funding for other important studies. Some were related to local business problems, but others dealt with important national developments such as the application of the Robinson-Patman Act.
During most of its existence, the Bureau of Business Research attempted to include in its current projects at least one that was of major concern to the state of Michigan. Studies ranged from detailed analytical studies of the state budget to explorations into the special problems associated with industrial development and expansion. Special workshops and conferences on industrial development were also held for state agencies, city officials, and commercial and civic groups in cooperation with the State Office of Economic Development. When the Industrial Development Division of the Institute of Science and Technology was set up in 1960, the Bureau of Business Research worked cooperatively with that agency.
Bureau of Industrial Relations. — The program of the Bureau of Industrial Relations continued to show steady growth during the forties and fifties. The primary areas of activity included an expanding continuing-education program and the establishment of a Faculty Research Page 79Fellowship in Personnel Administration supported by corporate contributions. This program helped support research in such fields as executive development, collective bargaining, arbitration, and special aspects of personnel administration. The conference program of the Bureau came to assume a major share in the Bureau's activities. In 1955-56 the Bureau sponsored 28 conferences in five different Michigan cities. The scope of this program increased under the direction of John W. Riegel, who retired as Director of the Bureau in 1959.
Under George Odiorne, appointed director in 1959, the conference and seminar work of the Bureau was further expanded, and to those programs were added the Center for Programmed Learning and several quarterly publications. In the late sixties a more integrated program was devised, and many firms began to look to the Bureau of Industrial Relations as their chief source of management training. By 1970 the Bureau was conducting seminars in cooperation with the School of Business Administration faculty and outside guest lecturers on 50 different topics. It offered about five workshops or seminars a week, amounting to more than 270 during the calendar year.
Bureau of Hospital Administration. — The Bureau of Hospital Administration was established in 1957 as the research arm of the Program in Hospital Administration. The Bureau showed rapid growth, and its faculty and staff soon made important contributions in medical economics and regional hospital planning. Within the first three years of its existence, it achieved sponsored research funding in excess of $500,000 annually, and its research remained at about this level throughout the remainder of its existence as part of the School of Business Administration.
Institute for International Commerce. — Established in 1966, the object of the program was threefold: to give more business students at the School an understanding and interest in foreign trade; to conduct workshops and seminars aimed at helping Michigan business men compete in international markets; and to conduct and sponsor research into the special problems and opportunities Michigan businessmen would encounter in seeking to increase their exports. The Institute also developed a special reference collection on foreign trade as a resource for businessmen.
The initial efforts of the institute were aimed at identifying the Michigan export community, its size, Page 80growth, and potential. As part of this effort, the first Directory of Michigan Exporters was published, and findings from special research on opportunities for Michigan businessmen were made available through workshops and conferences.
Publications. — For many years both the Bureau of Business Research and the Bureau of Industrial Relations were active publishers of periodicals as well as books and monographs. The Bureau of Business Research established the publication pattern for the School when it began issuing studies in a number of special series. Basic studies in the field were initially published under the title Michigan Business Studies. The title Michigan Business Reports was reserved for more specialized research reports. Another series, comprising speeches by faculty and business leaders at various conferences, was headed Michigan Business Papers. Cases for classroom instruction were also issued in a special series. As the international work expanded, new study series were added to cover work in international business, international labor, and international commerce. Through its publication program, the Bureau of Industrial Relations issued major works under separate titles, but it also published a series of monographs on industrial relations and other appropriate topics. In 1948 J. Philip Wernette joined the staff as Director of the Bureau of Business Research, and the Michigan Business Review was launched with Professor Wernette as editor. The first number was dated May 1949. The first few issues were identified with the Bureau of Business Research, but later the Michigan Business Review was sponsored directly by the School as a special activity. Professor Wernette remained its editor for twenty-five years. The journal was distributed gratis to management personnel and libraries; its circulation increased to approximately 7,500 by 1960. The Michigan Business Review was listed in the Business Periodicals Index and its circulation reached approximately 30,000 by 1971.
Other academic periodicals were also sponsored by the School through the Bureau of Industrial Relations. The Management of Personnel, a quarterly publication, was established in 1961 with an initial circulation of 2,100; by 1971 it had grown to 6,500. Personnel Management Abstracts, which came under the sponsorship of the School in 1954, had a circulation of 900 in 1961 and 7,000 in 1971. The Bureau of Industrial Relations also assumed responsibility for publishing and distributing the Industrial Relations Law Digest in 1967. By 1971 its circulation was 1,800.
Page 81Continuing Management Education. — An important program for the continuing education of executives gradually developed at the School through the activities of the separate bureaus and institutes as well as through the interest of individuals and groups among the faculty. The direction of the effort was established in the 1950s, but its major growth came later, during the 1960s. There appears to be little doubt that by 1971 the School's work in continuing education constituted the most highly developed program sponsored by any business school in the United States.
The continuing education program included much more intensive training programs than those found in short workshops and seminars lasting only from two to five days. The first longer executive development session was launched in 1950. This was the Bank Training Program, which was conducted two weeks each year for two years. The second major venture was the four-week Public Utility Executive Program, started in the summer of 1951. Within a few years the demand for the Public Utility Program was so high that two consecutive sessions were soon offered. In 1954 the faculty initiated a more general four-week Executive Development Program. These three programs have been continued each summer.
In addition to the continuing programs initially established in the 1950s, others were given for a few years to meet special requests. One such was for the Blue-Cross and Blue-Shield Associations. In the late 1960s a special two-week program on computer applications was initiated for business school faculty. It was first offered solely by the School of Business Administration but later came to be sponsored jointly with the American Assembly of Collegiate Schools of Business.
The School generally assumed responsibility for developing its own continuing-education program, but it frequently joined with the Extension Service in offering special noncredit course work and in conducting special conferences. One important joint effort was the Real Estate Education Program, established by the School in 1947 in cooperation with the Extension Service. For many years this program offered the only professional training in real estate available to practitioners. Attendance at the program became almost a requirement for gaining a real estate license in the state of Michigan. By 1970 this program attracted 3,500 participants a year and offered 80 different courses in 25 locations throughout the state. Sixteen special institutes, lasting a week and covering essentially the same subject matter, were Page 82also offered. The Real Estate Education Program was fully supported by tuition revenue which in 1970 amounted to over $230,000.
New Buildings. — In 1940 the School still occupied its initial quarters in Tappan Hall. No serious efforts in developing plans for the new building had been made until 1938, when potential sites were investigated. Final plans for the School's first building were completed in 1944-45, making the building the first construction to be undertaken on the University campus following World War II. The appropriation for the building was approved by the legislature in its special session in 1946 and construction started the following September. Classes were held in the new building in the fall term of 1947, twenty years after the building was first proposed to the Regents.
Shortly after his appointment Dean Bond began developing plans for additional construction to the School. The original building had reached full utilization and increasing enrollment posed requirements that had not been anticipated in the design of the original building. The large continuing program in management education suggested a pressing need for an advanced management center. This was given fourth priority in the University's program for the $55-million campaign. The entire building program could be separated into individual projects if necessary, depending upon financing and timing. The William A. Paton Center for Accounting Education and Research represented one element of the total plan. It was initially agreed that the primary source of funds for this Center should be from professional accounting firms.
Among the early generous supporters of the program were Donald C. Cook, who made an initial gift of $50,000 in 1966, and the Consumers Power Company which gave $60,000 in 1967. Although small donations continued, and a general fund-raising program among alumni was initiated, only in 1970 was success assured through a substantial gift from Clayton G. Hale, a graduate of the University and a former lecturer and professor of insurance in the School of Business Administration. In January 1970 he gave $325,000 for an auditorium which would be part of the advanced management complex.
The proposed program for fund raising and construction was approved by the Regents, and ground was broken for the new addition to the school on June 23, 1971. The new unit was completed on schedule and was financed Page 83entirely by private gifts.
Library. — The specialized library facilities that were available to students of business administration in Tappan Hall had been extremely limited. In 1940 the holdings of the Business Administration Library consisted of 14,000 books and subscriptions to approximately 225 periodicals and services. Even after the move to the new building, the library holdings remained relatively meager. During much of the fifties, the library budget was wholly inadequate, allowing only about $25,000 for both salaries and books. In 1952, for example, only $2,000 was budgeted for new books.
During this period the library was only partially independent. Full independence was achieved in 1970 when the School of Business Administration Library was given the same status by the Regents as the Law Library and Clements Library. Following this change, the Program in International Business and the Bureau of Industrial Relations, both of which had available additional funds to build up their library resources, integrated their holdings into the main collection.
By 1970 the Library collection comprised about 75,000 books, 640 reels of microfilm, 12,691 pieces of michrofiche, 76,000 pamphlets, and 845 serials. Special collections of annual reports for 2,400 corporations were also available, as well as Form K reports to the Securities and Exchange commission. The library staff consisted of five professional librarians operating with a budget of approximately $150,000.
Foreign Contacts. — The School has always attracted a significant number of foreign students. Prior to World War II there were large numbers of Chinese students in attendance. After the war the enrollment shifted, and by the late sixties the School was attracting many students from Japan. At times more than half of the Japanese students at the University of Michigan were registered in the School of Business Administration. In 1971 approximately 5 percent of the enrollment consisted of over 50 foreign students from more than 20 foreign countries.
The students initiated an interesting foreign job exchange program under the sponsorship of the International Association of Students in Economics and Management (AIESEC). At the start of the program in 1963, seven business students spent the summer working abroad for Page 84European business concerns. By 1965 the number had increased to sixteen. This program was a cooperative effort between foreign and American students and businessmen. During the sixties the School conducted special programs for students from Venezuela. The program was sponsored by the State Department as part of an international student exchange program.
The faculty and administration formally engaged in foreign-based programs from 1960 onward. The first project was to establish a School of Business and Public Administration at National Chengchi University in Taiwan in cooperation with the University's Institute of Public Administration. In 1965 an exchange professorship was set up with the Netherlands School of Economics. This led to a formal five-year contract with the Foundation of Management Education, an organization associated with the Netherlands School of Economics. Faculty members from our School were assigned as advisers and teachers in the first program in Holland for the Master of Business Administration degree.
New Technology in Teaching. — Weekly 15-minute radio broadcasts began in 1954. Almost continuously since that time members of the faculty of the School have presented radio and television business broadcasts with the cooperation of the University radio and television centers. In 1970 the School cooperated with the College of Engineering to offer course work over the University of Michigan Instructional Television Network. Eight courses, using live classes in the broadcast studio, were offered to students at receiving studios in Dearborn, Southfield, and Detroit. Because the network provided for remote control of three broadcast cameras in each studio and instantaneous two-way audio, participation of students at all the centers was possible.
Other technological advancements were applied in teaching. By 1970 faculty members were making full use of the computer for instruction and were employing audiovisual and audio cassettes, films, and slides in their classes. Overhead projectors were available and in use in all classrooms.
Special Lecturers. — It has always been a policy of the School to invite outstanding business executives to address the students and to hold discussion sessions with them. Ultimately, this arrangement for visiting lecturers was expanded to include a prominent executive in residence at the School. This program was notably supplemented in 1966 by the creation of the McInally Lecture Endowment Fund, named in honor of former Regent Page 85William K. McInally. Arjay Miller, President of Ford Motor Company, gave the first McInally Lecture in 1966. Other speakers since that time have included Richard Armour, Joseph L. Hudson, Jr., H. Bruce Palmer, Paul W. McCracken, and F. Lee Bailey.
Scholarship Funds and Endowed Chairs. — In the mid-fifties the School began a modest solicitation of funds from Alumni to set up scholarships in honor of Professors Paton, Griffin, and Rodkey. These were made available to students in accounting, marketing, and finance. Following this move, a nationwide alumni organization was developed to solicit annual gifts, and by 1971 the program of annual alumni gifts was producing close to $100,000.
In 1967 the S.S. Kresge Foundation created four endowed professorships in leading business schools in the United States in honor of the founder of the company, Sebastian S. Kresge. Gifts amounting to $600,000 were made for endowing chairs at Michigan, Harvard, Stanford, and Columbia, each of the holders to be known as the Sebastian S. Kresge Professor of Marketing. Professor James D. Scott was named the first holder of the chair at the School of Business Administration.
In 1970 the partners of the C.P.A. firm of Arthur Young gave funds to a small number of schools to endow chairs for distinguished faculty members who would have the title of Arthur Young Professor of Accounting. The School was again recognized with one of the endowments from the Arthur Young partners.
Alumni Activities. — As early as 1928 the School held an alumni conference in Ann Arbor. Few alumni attended, however, until in 1969 a committee, headed by Richard G. Gerstenberg (later to become Chairman of the Board of General Motors Corporation) suggested that the conference be held in Detroit and be made open to the Detroit business community. From that fall on, the conference was held in the Detroit Rackham Building and became known as the Annual Conference of the Graduate School of Business Administration. Attendance each year has now approached the full capacity of 600.
The first informal Alumni Bulletin was sent to the faculty by Dean Griffin in 1942. Other informal bulletins were sent intermittently during the following years until 1965, at which time the formal Alumni Bulletin was issued at regular intervals. Later this was replaced by Page 86the alumni magazine Dividend. Dividend was granted the Time-Life Magazine Improvement Award for the midwest in 1970, and the Award for Distinguished Achievement by the American Alumni Council in 1971.
Many alumni of the School have had distinguished business careers; some of them, the University has singled out for honorary degrees. Among those so honored during this period are: Frederick G. Donner, Chairman of the Board of General Motors Corporation (1961); Lynn A. Townsend, President of Chrysler Corporation (1965); Donald C. Cook, President of American Electric Power Company (1966); Robert P. Briggs, Commissioner of Financial Institutions for the State of Michigan, Regent Emeritus of the University (1969); and Eugene B. Power, Founder of University Microfilms and former Regent of the University (1971).