Alumni are threatening to pull the University’s endowment funding if the Board of Trustees votes to approve the proposed College of Business at the end of this week.
Plans for the College of Business — which were announced Dec. 14 — would merge programs from the School of Hotel Administration, the Charles H. Dyson School of Applied Economics and Management and the Samuel Curtis Johnson Graduate School of Management.
“Within the new College of Business, the distinctive nature and excellence of each school, brought together with the other accredited business schools to take advantage of integration for the benefit of students and faculty, will be the defining feature of the business program at Cornell,” President Elizabeth Garrett said in a Dec. 21 statement.
While the administration hopes that the Board of Trustees will decide to formally recognize the new college, many alumni and faculty members have voiced concerns over the proposed college’s funding and structure.
Faculty Senate Votes to Table
Just two days after the proposed College of Business was first announced, the Faculty Senate unanimously passed a resolution requesting that the Board of Trustees table the proposal.
“Resolved, that the University Trustees table the consideration of the creation of the College of Business until the Faculty Senate can deliberate on the proposal,” the full resolution states.
In a Jan. 4 letter to the Faculty Senate in response to the resolution, President Elizabeth Garrett said the “only pending action” regarding the College of Business is a request for the Board of Trustees to formally recognize a new administrative unit.
“Provost [Michael] Kotlikoff and I determined that it was important first to engage the Board of Trustees on this initial question of organizational structure, and, once that decision is reached, to engage deeply with all the involved constituencies, especially faculty, as key educational decisions are reached collegially,” Garrett wrote.
‘We Don’t Know How the College is Going to Operate Yet’
Although the Board of Trustees will vote on whether to approve the proposed College of Business next week, how the college will function remains largely unknown.
“We don’t know how the college is going to operate yet,” said Prof. Ronald Ehrenberg, industrial and labor relations. “We are led to believe from what the provost said that all arrangements about the college will have to be discussed by the faculty of the three units and some agreement will come.”
The upcoming Board of Trustees vote will concern only whether to create a new administrative unit for the College of Business and does not address how the proposed college would be funded.
As part of the College of Agriculture and Life Sciences, the Dyson School of Applied Economics and Management receives state funding. However, the School of Hotel Administration and Johnson School of Graduate Management are privately funded.
If these different funding sources are all used to fund the College of Business, the deans of each individual program may lose budgetary authority, according to Ehrenberg. Individual programs within the three merged schools may need approval of all three schools to spend reserves or allocate endowments to professors, Ehrenberg said.
Ehrenberg’s concerns about the mixing of state and private funding will become relevant if the Board of Trustees approves the proposition for the College of Business.
“Over the next several months, the deans and directors of the three schools and the College of Agriculture and Life Sciences will work with faculty to develop the academic process that will be critical to achieve our aims of faculty integration and individual school identity,” Garrett said.
Many alumni have also expressed a desire to table this issue in order to further develop the details of the new college before its creation is put to a vote by the Board of Trustees.
Funding Questions
Some faculty and alumni are asking to table the proposal in part because there is little information available about how the new college will be funded, including changes to the budgets of the three previously independent programs.
“It appears that [in the new college] the dean of the Hotel School and who will become the dean of the Dyson program are going to lose budgetary authority. Without it, they’re not really in control of their own destiny,” said Erik Hansen ’71, who with his wife Vanessa Hansen endowed a scholarship to the School of Hotel Administration in 1994.
Garrett stressed that the formation of the College of Business would not affect the money alumni provide to each individual school.
“All gifts designated for a particular school, including scholarships, will stay so designated, and future gifts can be similarly designated,” Garrett said.
After expressing his concerns about the proposed College of Business, Hansen received a personal phone call from Garrett. However, Hansen said he does not feel reassured and plans to write Cornell University out of his will altogether if the merger is approved by the Board of Trustees.
“I’m not happy at all,” Hansen said. “If the school ends up no longer an endowed college, than my wife and I plan to take the University out of our will. We’re not going to do anything precipitously here. We want to make sure that our hard work is used in a way that we think is appropriate and will do some good.”
If Hansen does not exclude Cornell from his estate plan, his gift will have accumulated up to an eight-figure dollar amount and would be used to cover scholarships. Hansen has informed the University that he and his wife plan to donate their money elsewhere if the proposed College of Business is approved.
The University declined to comment on alumni’s decisions and threats to retract donations from endowments.
‘There Were No Courtesy Calls’
Hansen is not the only alumni to express surprise and concern about the proposed plans for the College of Business.
“The alumni learned of this when the article came out,” said Ari Cantor ’05, referring to a Dec. 14 story published in The Sun about the College of Business. “There was no pre-announcement. There were no courtesy calls given out.”
Cantor is part of an email chain group that he said began between over 100 alumni from several colleges, including the School of Hotel Administration and the Dyson School. Members span from the Class of 1953 to the Class of 2007.
“When the alumni learned about this, a number called the administration office at Day Hall to get more color on the proposed merger,” Cantor said. “Many of them did not receive a call back or received very limited answers that were vague at best.”
In the chain email, alumni expressed their concerns, including that this merger would end the industry-specific character of the Hotel School.
“As a successful alumnus, what is the impetus for me to recommend this new school to my children when they can choose from hundreds of other business schools like it?” Federico Castellucci III ‘07 commented in the email chain. “The Hotel School has always been known as a unique program that is one of a kind.”
Because the Board of Trustees meeting is closed to the public, alumni have been sending emails to the dean of the Hotel School as well as the office of alumni affairs to express their dissatisfaction, according to Cantor. He and other alumni are hoping this will allow their voices to be heard.
“Why would you combine three schools, and waste time, money, and resources in Ithaca, to boost the performance of one?” Cantor said.
Alumni from the School of Hotel Administration also said they were worried that the Johnson School’s lower ranking — 16th in Bloomberg Business — could bring down the other schools.
“Why not relocate the Johnson School, which is the program that seems to have the lowest ranking of the three, to Manhattan to the new Long Island City Tech Campus?” Cantor said. “It is a hub for finance with Wall Street, biotechnology research with the Weill College, and the tech sector with Google, Pinterest, Facebook, etc. Think of the marketing potential for executive education, working MBA candidates, and the recruitment of faculty.”
Alumni also created a Facebook page called “Keep Cornell Hotel School Independent” on Dec. 17, and it has since garnered over 700 likes. Elaine Liang ’14 used the page to promote a petition created along with other alumni, urging the Board of Trustees to vote down the college. The petition had about 500 signatures.
“The inclusion of SHA in the College of Business is bewildering,” the petition stated. “While SHA markets its curriculum as a business program, all of its core classes have a heavy focus on the hospitality industry. Therefore, it is unclear as to how future generations of students at SHA can benefit from a generic business program offered by the College of Business.”
Garrett and Kotlikoff also addressed some of the alumni and faculty concerns in a Dec. 21 statement.
“We expect that the new College of Business will elevate Cornell as a leading university in the study of business at the undergraduate and graduate levels, and each school will maintain its unique identity and mission,” the statement said.