Companies design, fund curricula at universities

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RALEIGH, N.C. -- When graduate students at North Carolina State University took their seats on the first day of a class called Services Management, the kickoff lecture wasn't delivered by a professor. Instead, it was given by a manager from International Business Machines Corp.

The company, in fact, helped develop the curriculum and awarded grants to the school with the expectation that the course would be taught -- all with the aim of producing graduates better prepared to work for IBM. The guest speaker, a regional manager, began his lecture by saying, "My name is Craig Nygard, and I am a services professional," later adding, "You have started thinking about tackling big problems and turning them into revenue opportunities."

A fast-moving, competitive economy -- and the perception that students are unprepared for its demands -- is creating a new phenomenon at colleges and universities: courses supported by, and tailored for, potential employers. In addition to IBM, other major corporations seeking to increase their presence and influence on campus include Credit Suisse Group and German auto maker BMW AG.

None have approached IBM's breadth of involvement in helping to create and promote a new discipline. In the past two years, IBM has been drilling its priorities into graduate and professional schools to help ease its transformation from a manufacturer of hardware and software to a provider of what it calls "solutions" and "services," including consulting and support services. The Armonk, N.Y., company has even developed a new academic field: "Service Sciences, Management and Engineering," or SSME.

The discipline focuses on the relationship between clients and service providers by combining studies in such disparate fields as computer science, engineering, management sciences and business strategies -- areas that IBM contends are too segregated in higher education, to the detriment of students, companies and, ultimately, the economy.

The curriculum offers an academic way of understanding interactions between client and provider, according to IBM, using a mix of scientific and business concepts to focus on areas that might not be core in either a Masters of Business Administration or computer-science program. Some of these concepts -- customer satisfaction, using mathematical models and market research, understanding a supply chain -- may already exist in graduate programs, but they are rarely packaged as a program of study in their own right.

The federal government is also keen on strengthening the relationship between universities and potential employers. That is one of the issues before the Commission on the Future of Higher Education, appointed by Education Secretary Margaret Spellings and comprising academics and corporate executives from companies such as Microsoft Corp., Boeing Co. and IBM. Its goal is to shake up what critics charge is complacency and unaccountability in higher education, leading to graduates who are poorly equipped for the realities of corporate work today.

The trend goes beyond the traditional ties between private industry and academia. Companies have long funded chairs for faculty -- or even academic centers -- in areas of particular interest. They underwrite research into business issues that eventually turn into case studies for classes. And executive-education programs housed in business schools cater to corporate employees with courses taught by university faculty. For companies, these links have promoted a better-prepared work force. Faculty, meanwhile, have incorporated real-world applications into the classroom.

Now, though, critics worry about the implications of companies tailoring classes for their benefit, as IBM is doing. "This is a breach of academic integrity," says Jennifer Washburn, a fellow at the New America Foundation and author of "University Inc.," a 2005 book critical of corporate influence on education. She says such influence has mushroomed as universities face cutbacks in federal and state support, and as companies increasingly seek out the best talent. The upshot: "More and more universities are allowing companies to have a greater say ... even when it compromises their own academic independence."

IBM, for its part, says the curriculum can help prepare students whether or not they go to work for the company. "This is much broader than IBM's focus ... . It's becoming part of prominent types of jobs in most economies," says Gina Poole, IBM's vice president of university relations. Still, she says the company has a bottom-line advantage in helping to establish this curriculum. When students who have taken the courses look for jobs, they will be "more likely to consider and perhaps recommend IBM," says Ms. Poole.

The University of California, Berkeley -- which has also been working with IBM to develop coursework -- has created a "certificate" in Services Science, Management and Engineering, which started this fall. The company has also awarded research grants to five faculty members, IBM says. The effort began, says A. Richard Newton, dean of Berkeley's College of Engineering, when an IBM executive who sits on an advisory board suggested the school devote more resources to teaching service sciences.

"If IBM spends money on you, people start to get a little more motivated," says Robert Glushko, an adjunct professor at Berkeley's School of Information. This fall he is co-teaching a new course he helped create, titled The Information and Services Economy. This summer he met with IBM executives at the company's Silicon Valley research center to seek their advice on his syllabus. Among other readings, Mr. Glushko's students now are required to study selections from the IBM Systems Journal and an article by IBM's chief executive, Samuel Palmisano, published in Foreign Affairs magazine.

At IBM, revenue from its services business rose to $47.4 billion in 2005 from $12.7 billion 10 years earlier. Today, the company says, more than 50 percent of its revenue comes from areas it considers to be "services."

And, it argues, that is where the rest of the economy is headed as well. According to the Bureau of Labor Statistics, 83 percent of all employees in 2005 were in service-providing jobs. It is estimated that sector of employment will encompass 90 percent of all new jobs by 2012.

IBM is a big employer of North Carolina State graduates, says Ira Weiss, dean of the College of Management. And that, he says, is a top reason the university was eager to work with IBM to develop a curriculum in service sciences. The "services management concentration," which took about a year to build through intense collaboration between NC State faculty and IBM staff, officially began this fall.

The concentration is open to graduate students in both the M.B.A. and Masters of Sciences in Computer Networking programs, and will draw from research and teaching in both computer and business-related fields. The company has so far given five faculty awards of $30,000 each -- and the time of IBM employees -- to help create five courses.

In developing the curriculum, the university says it was careful to make the content broad enough so it could be applicable to students going to work at companies other than IBM, says Professor Mitzi Montoya-Weiss. The school is in the process of setting up an advisory board of corporate representatives from different industries to continue advising the program, to ensure that different perspectives are represented.

IBM says it invests $100 million a year in its university initiatives. Funding for its SSME efforts, which are part of that, have increased 30 percent in the past three years. Faculty receives grants starting at $10,000 to be used either for curriculum and course development that aim toward service skills, or specific research aimed at solving service-related problems. In some cases, the company contributes more than $100,000 for more-involved research projects, which can include hardware, software and staff support.

Since 2004, IBM has hosted a half-dozen conferences and workshops, inviting hundreds of faculty from universities around the country -- and the world -- in an effort it dubs "A Call to Action." At a recent workshop the company co-hosted in Washington, D.C., it showcased efforts by faculty at universities such as Arizona State University and UC Berkeley to incorporate services into courses. Corporate rivals such as Hewlett-Packard Co., Oracle Corp. and Accenture Ltd. joined the discussion.

Mary Jo Bitner, who teaches marketing at Arizona State, says talks with IBM have influenced her teaching. "I have to teach the course more broadly than just from an IBM perspective, but what they've done has inspired us to ... rethink what we do," she says, adding that she has received a "small honorarium" from the company.

Ken Laudon, a professor at New York University who teaches a class this semester called "Managing the Digital Firm," says he hasn't received any money from IBM. But a recent presentation by IBM on service sciences to his class inspired some changes in his teaching this fall.

"We're going to spend three hours on service sciences, whether to criticize it, support it, have IBM come in and talk about it, and just consider it. It's a serious idea from a serious company with serious money," he says. "You have a big gorilla jumping up and down. How can you not listen to it?"


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