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Online Campus, Part II: The Spinoff

September 30, 2008

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When the University of Illinois first announced its plan to create a separate, for-profit online education arm called Global Campus in 2006, observers saw potential for a significant shift in a landscape dominated by profit-seeking companies and a few successful models at public universities. That sentiment lasted only as long as it took faculty leaders to get hold of the proposal, however, which they rejected for relying heavily on non-tenure-track instructors, among other reasons.

Eighteen months later, after a slow start for the online campus, some faculty may be coming around to the university administration's attempt to resurrect some of that initial blueprint, albeit in altered form.

As a result of a 2007 compromise with faculty members, Global Campus doesn't currently operate as a stand-alone entity. It partners with existing university departments on all academic offerings, and existing university faculty control course content. Partially for that reason, and without significant incentives to do so, many professors have been reluctant to lend their resources to the enterprise. Officials predicted enrollments of up to 10,000 online students within five years of the initial incarnation's launch, but so far, Global Campus has logged 121 students in its five programs.

Last week Joseph White, the university's president and a strong backer of the initiative from the beginning, proposed a return to one of the original goals for Global Campus: achieving separate accreditation, which the administration argues would allow it to more freely expand and adjust offerings to market needs, and to hire its own faculty.

Until now, growth has been "slow," conceded Chester S. Gardner, chief executive of Global Campus and special assistant to the president. Keeping courses affordable meant no real financial incentives for partnering departments, which fed into a sense of wariness at the perceived added workload of delivering an online course. Those realities "just didn’t allow us to make much progress" and led to the latest proposal to revamp the online initiative's structure, Gardner said.

Unlike the original proposal that drew the ire of professors, Global Campus would remain nonprofit and would work with existing, tenure-track faculty members. With its own accreditation, it would effectively become a fourth campus in the University of Illinois system, Gardner said.

"Under the current plan, the Global Campus would employ a few non-tenured clinical faculty to help develop and deliver the academic programs as well as utilize existing University of Illinois tenure-system and emeritus faculty in this role," he wrote in a separate e-mail. "In other words, all academic programs would be University of Illinois faculty-[led]. These faculty would be encouraged to teach in the program but in order to scale the delivery, Global Campus would also employ adjunct faculty to teach, as we currently do with the existing Global Campus programs."

Administrators originally conceived the online campus as an extension of the university's land-grant mission in the state and a way to significantly expand access to quality higher education. Although the biggest player in online education nationwide is the for-profit University of Phoenix, officials stressed that many distance learners still prefer to buy local, as it were. UMassOnline, for example, enrolls fewer than 30 percent of its students from out of state.

Why Accredit?

The University of Massachusetts program, which officials at Illinois studied, isn't separately accredited but still operates with considerable autonomy. It enrolls more than 20,000 students and has seen double-digit growth year over year. Essentially spinning off an academic unit to become an independently accredited entity isn't ordinary, even in the unpredictable world of online education. One of the few notable examples is the University of Maryland University College, which started after World War II and eventually shifted into a separate, online-only campus.

Obtaining accreditation “allows us to definitively look at what programs are in greatest need and develop them. And we can offer them at essentially our cost, that we don’t have to build in financial incentives which of course affects tuition," Gardner said. "So this gives us the freedom of looking at the market place, determining what are the programs that are most needed then looking forward immediately to develop those programs."

"It gives the entity additional coherence and focus and allows it to perhaps operate in a more entrepreneurial way or perhaps be more responsive to the market place, but at the same time obviously wanting to maintain a fundamental link back to the parent institution, a key to the brand," said Richard Garrett, senior research analyst at the consulting firm Eduventures' Online Higher Education Learning Collaborative.

Garrett, who noted that he was speaking in general terms since the University of Illinois is a client, added that the argument for separate accreditation holds that it's "still very much a campus of the university but somewhat more independent of one of the more existing campuses, sort of a sensible halfway house, the best of both worlds, if you like." Still, he said there's no general trend toward such accreditation, although there "may be particular circumstances where it does make more sense."

When administrators were mulling over the form UMassOnline was taking, for example, they considered accrediting it as a stand-alone unit. "Among the advantages of creating a distinct organizational entity that would be separately accredited are better ability to measure business performance, potentially more control over what online academic programs are developed and delivered, and fuller control over the cost structure (for example, over the compensation that faculty will be paid to develop and teach online courses)," David J. Gray, UMassOnline's CEO, said in an e-mail.

"The disadvantages include creating a sense of competition within the university or university system via the creation of a new separate entity, including the faculty distrust that can accompany that, and the difficulties of creating synergies within the preexisting university structure."

But, like the proposed changes to Global Campus, UMassOnline relies on the existing campus resources. "All parts of the UMass system have been the beneficiaries," he said. "A wholly separate entity was unnecessary for us and I believe would have proven counterproductive to our successful development and growth in the online arena."

The View From the Faculty

Gardner and others believe there's a much better chance of the plan passing muster with faculty this time around, especially since the for-profit proposal is off the table and the program has been around long enough to alleviate concerns over course quality. But, as Gray observed, there's the possibility that a newly independent Global Campus could threaten the university's existing online programs at its three brick-and-mortar campuses.

"The competition aspect is particularly important if the institution is already operating online courses and programs," Gray said.

So far, it hasn't been a problem in part because of the sheer difference in number: the award-winning Springfield campus's online programs enroll about 1,200 students -- about a quarter of its total student population -- in liberal arts programs that have received support from the Alfred P. Sloan Foundation. Global Campus's programs will be more directed toward industries in need of trained graduates.

Pat Langley, chair of the Campus Senate at the University of Illinois at Springfield and a critic of Global Campus when it was first introduced, noted that most of the faculty have decided not to partner with the new online programs in part because of a lack of comfort with the model. "If they become their own institution, one of the key questions is, Who are they going to hire to deliver all these programs? There aren't a ton of answers here yet," she said.

Faculty at the Springfield campus support the vision of broadening access to education, Langley added, but there were concerns about a larger program marking online programs as "inferior." Springfield offers degree completion programs with core arts and humanities courses online, with a level of quality, she said, that derives directly from their on-campus sources.

Gardner said the president has already met with faculty leaders, whose advice he will present to the Board of Trustees in November. That leaves less than two months for faculty groups to study the plan, which still lacks details, and consider whether to oppose it publicly.

Following approval from the Illinois Board of Higher Education, he continued, Global Campus will begin the accreditation process with the Higher Learning Commission of the North Central Association of Colleges and Schools. Normally, that would take four to six years, he said, but since Global Campus is already operating, he expects to be able to negotiate accreditation within two or three years. Students who earn degrees until that time would have the option to receive diplomas from one of the residential campuses.

"I think a lot of people acknowledge that the current model isn't producing the kind and variety of programs that we all envisioned when the Global Campus started," said Nick Burbules, chairman of the Urbana-Champaign Faculty Senate who also serves on the Global Campus Academic Council. "People I talk with are willing to consider a different model."

Burbules said the fact that Global Campus would remain a partnership with existing faculty and that the content would originate from the university "broadly reassures people," and said the accreditation may not in itself be a "deal breaker." In general, he said that faculty will continue to be concerned about program quality -- and some, such as Elliot Kaufman, secretary of the Chicago Faculty Senate, think accreditation could actually ensure that it remains high.

"Personally I don't think seeking accreditation is a bad thing. It demands rigor and excellence [and] provides oversight and all of that good stuff. So, in essence, it's certainly not going to allow the Global Campus to cut any corners."

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Comments on Online Campus, Part II: The Spinoff

  • Lipstick on a Pig
  • Posted by Hoosier Prof on September 30, 2008 at 8:50am EDT
  • I don't see much in the administrators' plans about increasing the incentives for tenure track faculty to teach these online courses. Until universities stop pretending that online teaching is just more of the same, until they offer sufficient support to faculty and sufficient incentives to do the extra work online teaching involves, I doubt it really matters who accredits the program. It's still a farm animal....

  • Posted by On Line and On Site Adjunct on September 30, 2008 at 10:45am EDT
  • As a thirty year veteran of business and doctoral candidate specializing in organizational change, I sit bemused as I read this. The teaching part of universities are distribution channels. Distribution channels are changing and eliminating waste. Education is facing the same issues that confronted the Encyclopedia Britannica, the music industry, the movie industry, and newspapers. The business model is broken and no amount of luddite-like moaning will stop it. You may recall that Britannnica's initial attempts to move into the digital world were stymied by salespeople who resisted because they couldn't make the same commission selling CD's and subscriptions as they could selling immediately out of date books. The company responded by delaying the digital initiative and is now, for all intents an purposes, gone. Would you like to invest in a video rental business or CD music store in this era of digital downloads? Tower Records is gone and iTunes is the world's largest music retailer.

    Gilbert at Harvard did an interesting analysis of newspapers' inability to adapt to the digital world in his study of organizational inertia (Gilbert, C. (2005). Unbundling the structure of inertia: Resource versus routine rigidity. Academy of Management Journal, 48(5), 741-763). What we have here is what he calls resource rigidity. The inability or unwillingness to redirect resources because of prior commitments or, more alarmingly and more frequently, the fear of cannibalizing existing on site programs. Well, if you don't cannibalize your own business model, somebody will do it to you. Gilbert suggests spinning off the new entity so the members of the organization will view it as an opportunity not a threat. At the university where I teach, which touts its on line program, there is an iTunesU account which almost nobody uses. Why? I have heard faculty argue it is because if they posted their lectures, nobody would come to class. In business, we call this a wasted element of the value stream. If you don't create value in class over what they can get off a podcast, nobody should come to class.

    As this country faces increasing education costs and the need to educate more of our citizenry to a higher standard, as well as a future of increasing competition and diminished prosperity, one has to question the high cost model that exists. If universities don't do it, somebody else will and today's universities will become marginalized.

  • What's wrong with this picture?
  • Posted by Hoosier Prof on September 30, 2008 at 11:45am EDT
  • So pedagogy should be driven by business models?

    Adjunct, if you're suggesting that the future is coming and the rest of us "luddites" should just adapt or get out of the way, I'd like you to demonstrate to us that student learning modes and faculty teaching modes are as flexible as the available online technology. In other words, what's the evidence that students can learn as well using online technology? Perhaps there are volumes; I'd like to see them before your "business model" interferes with my livelihood and that of my students.

  • Posted by sanalyst on September 30, 2008 at 12:25pm EDT
  • This situation is similar to what many corporations face when trying to enter a new market segment. Often the human resources that should provide significant advantages impede growth as they seek to protect their current entities and personal power bases. Corporations almost always have to separate the new entity from the established organization if they hope to achieve success. Another alternative for Illinois would be to empower an entrepreneurial start up organization to fulfill this mission. There are plenty of examples of Universities licensing their intellectual property and brand names to outside parties for the purpose of gaining access to new markets and the generation of new revenue streams...

  • Learning outcomes
  • Posted by DL expert on September 30, 2008 at 2:45pm EDT
  • Many studies have shown the efficacy of online learning methods. For details on scores of studies that have shown no statistically significant differences between outcomes of students taught through distance methods and students taught through traditional methods, see http://www.nosignificantdifference.org/

  • not working
  • Posted by Don Sanders on September 30, 2008 at 2:55pm EDT
  • I hate to state the obvious, but the same people asking for accreditation now are the same people who promised 10,000 new students in 5 years and 50,000 new students in 10 years.

    A hockey stick forecast, to be kind, and a new plan for indepdendence and accreditation still doesn't change the fact that it hasn't worked and cost taxpayers millions of dollars. In an environment where faculty get 1.5% raises, this may not be a good time for the Board of Trustees to double down.

    There were already 75 online programs available through the 3 U of I campuses when Global Campus came into being, and many others available directly at the College/Department level. Launching a new business with a built-in channel conflict and confusing brand message, let alone several well-funded and well-established competitors (e.g., DeVry, U of Phoenix), doesn't seem like the sharpest tool in the shed.

    If this was a venture funded by angel or venture capital investors, the plug would have been pulled or, at the least, new management brought in to fix the mess.

  • Hoosier Prof Misses the Point
  • Posted by On Line and On Site Adjunct on September 30, 2008 at 3:15pm EDT
  • Hoosier Prof. displays Gilbert's other source of structural inertia in organizations - routine rigidity. The deer in the headlights syndrome when new methods and models appear and we don't know how to react.

    We are not messing with your livelihood. The customers are - the students and parents who pay the bills for the transfer of knowledge through existing high cost model - and they have the right to mess with it if they feel they are not receiving adequate value for money.

    I refer you to Clayton Christensen's work on disruptive innovation - new processes, products and technologies that provide adequate results for the vast majority of users while the incumbents continue to pursue an extravagant, high cost model that aims at the 10% of the users who want the ultimate. He is now extending his work into education.

    Finally, I refer you to Sheth (Sheth, J. (2007). The self-destructive habits of good companies:...and how to break them. Upper Saddle River, NJ: Pearson Education Inc.). He notes that one of the classic traits of good organizations that fail is the tendency to cross subsidize high cost portions of their operations with low cost operations. Competitors without the burden of cross subsidization can offer a lower cost alternative and always win vs. the curse of incumbency.

    What will prevent foreign universities from offering on line courses here without this need to subsidize U.S. based campuses? I assure you, employers will not care much about the arcane niceties of accreditation when students show up with a degree from the London School of Economics, the Sorbonne, INSEAD, or the Indian Institutes of Technology earned on line.

  • Education of the Future
  • Posted by Greg Harris on September 30, 2008 at 3:45pm EDT
  • Being a Graduate of two Online Schools keeps me focused on these types of discussions more often than I have time for yet making time for a positive comments seems needed here. What really upsets me is how Online Education is so pro the learner and change pro the learner. Yet change however is what’s holding up progress in a Mega University like U of I; and not that U of I can’t embrace change except it’s the Professors who can’t embrace it at the expense of its eager beaver learners.
    I can’t believe when Professors present augments about rather or not Online Education is on the same level or the outcomes being measurably the same. In Truth the online experience and non-linear learning because of the internet far exceeds the brick & mortar classroom experience and especially for a highly motivated learner. Moreover this whole thing about Non for Profit vs. For Profit is only a business model and has nothing to do with real learners…and I applaud U of I for even considering creating a For Profit Campus and even more so it being an Online Campus; that Campus will be proof based the numbers that Online is here to stay.
    Here is a funny For Profit story…I struggled for years via the inner city for an education and I say struggled because of family issues, family business, family struggles …inner city blues. I try City Colleges, State Universities and Private Schools and ended up semi away at a College named Kendall College Evanston to acquire almost two years of credit. I take all those schools combined, some profit, some non for profit and end up at American InterContinental University Online and get a Bachelor’s in Computer Systems plus graduate with Summa Cum Laude . Talk about pride…I’m a new person… then the real world sinks in ‘a For Profit University’…I never thought about it; but two years are with Non For Profit Kendall College whom decides to build another bigger better campus with a loan from mega money For Profit Laureate Education, Inc with the option of them exercising the right to take over the status if need be.
    Guess what…Kendall is now a successful For Profit College and my degree is to……LOL… and the moral of the story is…a degree and two bucks gets you bus ride…nothing more..nothing less and its only as good as you can apply it to the real world. I never have looked back after Kendall changed to For Profit because I knew they were a good school and now even better.

  • Greg, Do We Need an Interpreter?
  • Posted by DFS on September 30, 2008 at 5:15pm EDT
  • Does anyone else have difficulty quickly scanning the TEXT of Greg's remarks?

    After all, he is the product of online education.

    I hope and pray that I will still be able to see actual human beings write actual human statements on paper, by hand.

    Greg, it is inevitable that the future will necessitate the online avenue. What can we do to preserve some kind of STANDARDS?

  • Using Googles Chrome-Sorry
  • Posted by Greg Harris on September 30, 2008 at 5:55pm EDT
  • I am very sorry I did see that after the fact. Somehow Inside Higher Ed Programming must have pushed my writing and paragraphs together. I have never posted from Google's Chrome Browser before and when I did I copied and pasted after writing via MS Documents so it would correct grammar. I have no negative comments to your negative comments and humbly ask to be forgiven for the programming issue.

  • An outside observer's comment
  • Posted by On line and on site adjunct on September 30, 2008 at 8:40pm EDT
  • I referred a business associate and coauthor of mine to the site to read the article and comments. He has a daughter in college and a son about to enter. I thought his comments, reproduced below, would be of interest:

    "The Hoosier prof. is, to me, out of touch. Tell him his "pedagogy" is not threatened by a business model but it is threatened by economics. In today's America where the taxpayer is on the hook for trillions of dollars of debt and college costs have gone up double (per annum) what incomes have for the last 15 years, the "pedagogy" is definitely at risk because of its cost. If a student can cover the same coursework and demonstrate the same mastery of the subject on line vs the on campus option, then the only difference is the campus experience outside the classroom. I have yet to find why it costs $40,000 to send a young person to college or, for a Hoosier at IU, say $20,000 to $30,000-depending on residency. The parents and students that foot the bill are increasingly aware of the economic value of a degree vs. its cost. And sending a student into the world with $50,000 to $100,000 of debt is, in my mind, irresponsible and selfish if they could get the same education online. Education has to compete for customers just like businesses-and in the world of business with a mature product, the low cost producer of acceptable quality wins."

  • My Bad, Too
  • Posted by DFS on October 3, 2008 at 4:05pm EDT
  • That's okay, Greg. I'm learning about all of this crap, too, as you can tell if you read my interchange with Rae, elsewhere.