In the annual BSQ Finances Module, as noted in my last post, we ask participating schools to break down their uses of operating funds into amounts used for salary versus non-salary purposes. Additionally, each of these types is further broken down by a large number of different categories, in order to understand how these funds are used by our members. In this second part of my series on the factors relating to the uses of business school operating funds, I will concentrate on the usage types for salary purposes, and I will cover non-salary uses by type in Part III.[i] Because we have many different usage categories, I have merged them as follows, for greater ease of display and analysis:
|Uses of Funds Categories in BSQ Finances Module||Analysis Categories for Uses of Funds|
|Degree Program Instructional Activity||Degree Program Instructional Activity|
|Total Benefits Compensation
Non-Degree Executive Education
|Other Faculty and Admin Activity|
|Student Services and Admissions
|Faculty/Staff Recruiting Expenditures
Figure 1. Mean Percentages of Total Uses of Operating Funds for Salary Purposes, by School Size and Usage Category
Note: These data come from the 218 AACSB members who entered data regarding their uses of operating funds by type on the 2013-14 BSQ Finances Module. Small schools have 35 or fewer full-time faculty, Medium schools have 36-74, and Large schools have 75 or more.
As you can see, no matter what the size category of the school, Degree Program Instructional Activity constitutes the majority of the average uses of operating funds. This is understandable, given that this category includes all faculty salary expenditures for teaching purposes (faculty salary expenditures for other purposes are included in the relevant categories, e.g., research, public service, executive education, etc.).
That said, size most definitely matters when it comes to the proportion of salary operating funds used, appearing as it does to be inversely correlated for Degree Program Instructional Activity, and directly correlated for every other usage category. This makes sense, given that smaller schools have less staff with time and resources to pursue activities other than instruction towards degree programs (which is arguably the most important activity type for business schools), but the size of the differences is impressive.
Figure 2. Mean Percentages of Total Uses of Operating Funds for Salary Purposes, by AACSB Accreditation and Usage Category
AACSB Accreditation is another factor that, somewhat unsurprisingly, corresponds to a greater spread of the average proportion of operating funds used for salary purposes across usage categories. The most noticeable difference is that, on average, the proportion of salary operating funds accredited schools devoted to Degree Program Instructional Activity was 8.5 percent less than their non-accredited counterparts, while they devote more to every other usage category.
AACSB accreditation standards emphasize the importance of research, public service, and other such impactful activities, with the philosophy that faculty engaging in these activities in turn provide better quality instruction. Given that fact, this difference is also understandable.
Be sure to join me next time to see what differences exist in the categorical proportions of non-salary expenditures!
[i] I should note here that the way we collect salary expenditures on the BSQ Finances Module does not require respondents to categorize the salaries of individuals. Rather, they are asked to break down the total amount spent by the school on salaries into the various categories.