Meeting of the Board of Regents | October 2008

THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234

 

TO:
FROM:	Johanna Duncan-Poitier
SUBJECT:	Laboratory Institute of Merchandising: Regents Authorization to authorize LIM to award the Master of Business Administration and Master Plan Amendment authorizing LIM to offer a Master of Business Administration (M.B.A.) degree program in Fashion Management and Entrepreneurship
DATE:	October 1, 2008
STRATEGIC GOAL:	Goals 2 and 4
AUTHORIZATION(S):

 

SUMMARY

 

Issue for Decision (Consent Agenda)

 

Should the Board of Regents authorize Laboratory Institute of Merchandising to award the Master of Business Administration (M.B.A.) degree and approve a master plan amendment authorizing the Institute to offer an M.B.A. degree program in Fashion Management and Entrepreneurship?

 

Reason for Consideration

 

              Required by State regulation.

             

Proposed Handling

 

The question will come before the Higher Education Committee at its October 2008 meeting where it will be voted on and action taken.  It will then come before the full Board at its October 2008 meeting for final action.

 

 

 

 

 

Procedural History

 

LIM submitted this proposal in March 2008. The Department has determined that the program, if approved, would meet registration standards.

 

Background Information

 

Laboratory Institute of Merchandising, a proprietary college located in midtown Manhattan, was founded in 1939. It currently offers A.A.S. and A.O.S. programs in Fashion Merchandising, and B.P.S. and B.B.A. programs in Fashion Merchandising, Marketing, and Management. In the fall 2007 semester, the Institute reported an enrollment of 1,120 students, and a retention rate of 72 percent. The proposed M.B.A. program will be the Institute’s first graduate level program. Regents authorization of the Master of Business Administration (M.B.A.) degree is required because LIM is not currently authorized to award that degree title. Master plan amendment approval is needed to authorize LIM’s first master’s level program in the discipline of Business.

 

The purpose of the proposed M.B.A. program is to educate students in advanced concepts and theories of management, leadership, and entrepreneurship within the context of global industry, and specifically for the application of these theories within the business of fashion. This purpose supports the LIM mission to educate students in the businesses of fashion and marketing through an interactive and creative approach that fosters understanding of the relevant issues facing industry and the global community.

 

The curriculum of the proposed program requires completion of 45 credits (27 core credits, 9 in the concentration, and 9 elective credits). The first and second terms offer foundational courses in business administration, covering management theories and strategies. The third term offers students a concentration in either Fashion Management or Entrepreneurship, building on the business administration core within more specific contexts. The fourth term offers elective courses designed to broaden students’ knowledge and skills within their chosen specialization. Students will also complete a capstone project designed to apply and synthesize the knowledge gained in their coursework. Students who do not have fashion industry experience will take an additional 6-credit internship.

 

The proposed program must satisfactorily address a three-part planning test of (1) need, (2) potential effect on the proposing institution, and (3) potential effect on other institutions.

 

(1) Need has been shown in terms of employment projections for marketing managers both state-wide and nation-wide. For example, data from the New York State Department of Labor indicate that statewide, the job market for marketing managers is expected to be very favorable over the next five years. It stands to reason that within the highly competitive fashion industry, managers with specific knowledge of the fashion industry will have an advantage. In addition, in surveying its current student body, LIM found that 94 out of 100 respondents would be interested in a master’s program at LIM. 

 

(2) The effect on the institution would be to enhance the Institute’s baccalaureate-level programs by offering LIM graduates an opportunity to continue on to a graduate degree within the same institution.

 

(3) Regarding the effect on other institutions, following a canvass of degree-granting institutions in the New York City region, two institutions had concerns about competition for students. Staff observations on competition are discussed below in the Information in Support of Recommendation.

 

Since the mid-1970’s, the Regents position has been that concerns over competition should not bar approval of new programs that meet quality standards and for which need is demonstrated. The Department notes that the Laboratory Institute of Merchandising expects that 50 percent of the students for the proposed program will come from Western and Eastern Europe as well as from Asia, and the other 50 percent from within the United States.

 

The Institute expects to enroll 30 students in the first year of the program, increasing to 107 in the fifth year. The prospective student body is expected to be approximately 50 percent fashion industry professionals, mostly female. As noted above, the Institute expects to draw approximately 50 percent of its student body from outside the United States. This expectation alone should mitigate concern about competition for students within the New York City metropolitan area.

 

Recommendation

 

It is recommended that the Board of Regents authorize Laboratory Institute of Merchandising to award the Master of Business Administration (M.B.A.) degree and   approve a master plan amendment authorizing LIM to offer a Master of Business Administration (M.B.A.) program in Fashion Management and Entrepreneurship.  This amendment will be effective until October 31, 2009, unless the program is registered by the Department prior to that date, in which case master plan amendment shall be without term.

 

Timetable for Implementation

 

If the Board of Regents authorizes LIM to award the M.B.A. degree and approves the master plan amendment, the Department will register the program and Laboratory Institute of Merchandising will proceed to recruit and enroll students.

Information in Support of Recommendation

 

 

As mentioned above, according to data from the U.S. Bureau of Labor Statistics, employment projections for marketing managers were expected to grow by 14 percent in the decade beginning in 2006. In New York State, the Department of Labor lists the employment projections for this occupation as very favorable, with a 490 annual average number of openings statewide, and with a median wage of $133,600. Within the fashion industry more specifically, the job market was listed as favorable. It stands to reason that marketing managers with specific knowledge and experience of the fashion industry would enhance their job prospects in this highly competitive field. Indeed, LIM’s Fashion Industry Advisory Board, comprising 33 fashion industry executives, has expressed employment needs in the areas of merchandising, strategic planning, financial planning, and brand management, and has requested that a fashion-focused M.B.A. program be developed.

 

As part of the planning review, the Department canvassed all higher education institutions in New York City.  Eight institutions responded.  Two institutions objected: Pace University, on the grounds that the number of M.B.A. programs currently offered in Manhattan more than serves the market, and that the proposed niche is already covered by several other institutions; the Fashion Institute of Technology (F.I.T.) expressed concern that the proposed program could have a negative impact on its programs, given LIM’s proximity to its campus and the fact that F.I.T. also offers bachelor and master’s degree programs tied directly to the fashion and merchandising industries in New York City.

 

Differences between the Laboratory Institute of Merchandising and the objecting institutions should mitigate potential competition for students. These differences include the size and scale of the institutions as well as the cost of tuition. While LIM projects a graduate enrollment of 107 within five years, the Fashion Institute of Technology had a total headcount of 10,380 in the fall of 2006, including 185 graduate students; Pace has an enrollment of over 4,000 graduate students. The Fashion Institute of Technology, as a SUNY institution, charges $3,600 per semester for in-state graduate students and $5,730 for those coming from out of state. At Pace University, a graduate student taking 15 credits in a given semester would pay $13,500 for tuition. LIM currently charges $19,000 tuition per semester at the undergraduate level, and this would likely increase for graduate students. This differential in tuition rates indicates that it is likely that the three institutions cater to different segments of the market.

 

Concerning the similarity among program offerings in the metropolitan New York area, although other colleges offer entrepreneurial studies or specific courses in retail management within M.B.A. programs, none of these M.B.A. programs provide the level of fashion business education that LIM is prepared to offer. In addition, while the Fashion Institute of Technology, like LIM, is a college specializing in fashion, unlike LIM its primary focus has been on design, and it offers no M.B.A. programs. (See Attachment A for a comparison of the proposed program with graduate programs offered by F.I.T. and Pace University.)

 

              The focus, admission requirements and curricula of the programs cited by the objecting institutions differ sufficiently from those of the proposed M.B.A. that these points also mitigate potential competition. F.I.T.’s Master of Professional Studies in Global Fashion Management is a 36 credit program whose purpose is “to prepare current fashion executives for senior managerial positions.” Admission requirements are the GRE and a minimum of three years of work experience in a related area. The curriculum includes courses in production management and the supply chain, global marketing and fashion brand management, international culture and business. The program includes graduate seminars in Paris and Hong Kong. The course of study can be completed in a three-semester period.

 

              Pace University’s M.B.A. programs “seek to prepare students for broad management responsibilities,” and require 52 credits. Admission requirements include a U.S. bachelor’s degree or foreign equivalent and GMAT scores. Concentrations include Marketing Management and International Business, but there is no specific focus on the fashion industry. The program in Marketing Management prepares students for first-level marketing management positions in for-profit and non-profit organizations, and includes a 28-credit core with an additional 24 credits in the specialization (marketing).

 

              In contrast, the curriculum of LIM’s proposed M.B.A. program combines broad management and leadership skills with specific application to the fashion industry. Its purpose is “to educate students in advanced concepts and theories of management, leadership, and entrepreneurship within the context of global industry, and specifically for the application of these theories within the business of fashion.”

 

              An Internet search of fashion-related businesses within the New York City metropolitan area yielded over 1,200 companies. Within the context of the vast fashion industry in the New York metropolitan area as well as globally, there is surely room for one more graduate program to train entrepreneurs in fashion.

Attachment A

 

Comparison of Three Graduate Programs

 

 

	LIM	FIT	Pace
Degree	Proposed MBA	MPS	MBA
Program title	Fashion Merchandising & Entrepreneurship	Global Fashion Management	Marketing Management
Tuition per semester	$19,300	$3600 graduate (in-state) $5730 graduate (out-of-state)	$13,500 (estimate based on $900 per graduate credit in Lubin School of Business)
Purpose	“to educate students in advanced concepts and theories of  mgt., leadership, and entrepreneurship within the context of global industry, & specifically for the application of these theories within the business of fashion”	“to prepare current fashion executives for senior managerial positions”	“seeks to prepare students for broad management responsibilities”; concentrations include Marketing Management & International Business, but there is no focus on the fashion industry
Admission requirements	Earned bachelor degree; GMAT (min. score 550); 2 yrs. appropriate work experience	GRE; min. 3 yrs work experience in related area	US bachelor’s degree or foreign equivalent; GMAT
Curriculum	45 credits	36 credits	52 credits
Enrollment	1,120 total headcount (fall 2007) 107 (projected in proposed program in 5 yrs.)	10,380 total headcount (fall 2006); 185 graduate headcount (fall 2006)	Over 4,000 graduate students