Duke May Delay EMBA Program in China

Citing a report that projects a $2.6 million first-year loss to launch a new master’s program in China, the faculty at Duke University’s Fuqua School of Business is expressing “deep reservations” about the school’s plans to open a new campus in Kunshan, China.

Professors expressed concern about the economic viability of the two programs Fuqua wants to launch in China—a one year master’s of management sciences and an executive MBA—as well as doubts that faculty would be willing to live in China long enough to deliver the program there. The reservations surfaced last week at a faculty meeting, according to Inside Higher Ed.

The faculty sent the MMS program design back to the drawing board, following a recommendation from two faculty committees charged with designing the programs. The fate of the EMBA program, meanwhile, is contingent on a redesign and approval of the MMS program. The decisions by Fuqua faculty put off a review by the full university faculty, threatening to delay Fuqua’s Chinese ambitions beyond the fall of 2012 when the school had hoped to offer the MMS program and the fall of 2013 when the school hoped to launch the EMBA program.

A spokesman for Duke said the faculty vote is unlikely to postpone the opening of the campus. “The faculty committees will be working over the summer with various university officials responsible for operations, finance, etc., to refine their proposals for further review in the fall,” said spokesman Michael Schoenfeld in an email response to Inside Higher Ed. “This does not affect the schedule for the opening in fall 2012, and indeed will result in an even better program.”

Not everyone agreed with that official assessment, however. A professor in the English department, Thomas Pfau, was quoted by Inside Higher Ed believes the recent decisions put the entire plan for China in jeopardy. “The upshot of faculty deliberations at Fuqua this past Wednesday is a sound and deserved rebuke to the reckless, inchoate, and high-handed approach taken by the senior administration to this entire initiative,” he told Inside Higher Ed.

A consulting report by the Chinese Market Research Group on the programs predicted that students in China would not pay a Western-level tuition for the MMS program because it was based in China, that faculty members would not be willing to relocate for long periods of time to teach the program, and that insufficient quality would compromise the university’s reputation.

“The bottom line figure for the MMS program is consistently negative, ranging from a loss of $2.6 million in its first year of operation (with 60 students) to a loss of $400,000 (with 170 students in the program),” the faculty report stated. “Because we believe the forecasts for the number of students and their ability to pay are optimistic (and section sizes to be too large), we view these bottom line figures to be quite optimistic, even though they are negative.”

The faculty is concerned that the China campus will siphon off resources from the school’s primary Durham campus. While Kunshan is providing the land and building the physical campus, Duke has made some financial commitments and is projected to spend $37 million on the campus in the first six years.

While the university has not provided details about how much the MMS program would cost, the report asked students whether they would be willing to pay $41,000 a year, which is about how much the college charges for the same program in Durham. That would be about 40 times higher than a graduate program at a Chinese institution.

The consulting firm that produced the study interviewed 50 undergraduate students at four different Chinese universities about Duke, its China campus, and a graduate program in management studies. Researchers also interviewed parents and potential employers.

It found that only 10 percent of students surveyed said they would consider the management studies program at Duke’s China campus directly after college, citing the lack of an international component and a perceived difference in quality between programs based in the U.S. and in China. Sixteen percent said they would consider the program if it offered the chance to study in the U.S. for at least two months, and 30 percent said they would consider it if half the program took place in the U.S.

“While most families have the means to pay $41,000 [annually] for a graduate degree and would be willing to do so for a degree earned from a prestigious university in the U.S., none are willing to pay that much for a China-based Duke MMS degree,” the report states.

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