WHU – Otto Beisheim School of Management E-Book

Klaus Brockhoff

• Herausgeber: tredition
• Kategorie: Gesellschafts- und Liebesromane
• Sprache: Englisch

Seitenzahl: 597

Veröffentlichungsjahr: 2021

Beschreibung

How can a personal desire to leave a lasting mark and criticism of the German university system lead to the establishment of an internationally renowned institution of higher education? Klaus Brockhoff provides the answer to this question by accurately tracing the detailed 35-year history of WHU – Otto Beisheim School of Management – and highlighting all of its highs and lows in the process. Despite the challenges associated with founding and operating an institution of higher education, it was always and will continue to be the remarkable spirit of the donor, university administration members, employees as well as students, alumni and sponsors that make a decisive contribution to the overall success of WHU. At the same time, the history of WHU may also serve as an example for other universities wanting to position themselves successfully amid international competition that is becoming increasingly dynamic. Ever since the establishment of WHU, Professor Dr. Dr. h. c. Klaus Brockhoff has been monitoring the institution's evolution, served as its dean for five years and then went on to be part of the foundation's Executive Board for 13 years. His presentation relies on a comprehensive document analysis in addition to personal conversations with numerous contemporary witnesses and members of WHU. The Beisheim foundations in Switzerland and Germany remain committed to promoting the philanthropic legacy of Otto Beisheim, one of the co-founders of Metro. At the same time, both foundations are the primary sponsors of WHU, which has borne the name of the entrepreneur – Otto Beisheim School of Management – ever since he demonstrated such impressive personal commitment in 1993. The Beisheim foundations are the editors of this publication, which will also be published in German.

Leseprobe

WHU – Otto Beisheim School of Management

WHU Publishing

Klaus Brockhoff

WHU – Otto Beisheim School of Management

From Niche Position to International Recognition, 1984–2019

Editors:

Prof. Otto Beisheim Stiftung, Baar

Prof. Otto Beisheim Stiftung, München

Author:

Prof. Dr. Dr. h.c. mult. Klaus Brockhoff, Koblenz

Print: ISBN 978-3-347-04253-7

ePub: ISBN 978-3-347-04254-4

WHU Publishing

Publisher: tredition GmbH, Hamburg

Translation: Leinhäuser Language Services GmbH

Cover Design: Kerstin Ax

Typesetting: Satzbüro Peters

Production Project Manager: Ruth Spiekermann

This work including all its parts is protected by copyright. All rights reserved, in particular those of reproduction, reprinting in extracts, translation as well as storage and processing in electronic systems.

For information regarding permissions, write to [email protected].

Foreword by the editors

From today’s perspective, it was a bold move when on July 8, 1983, the Chamber of Commerce and Industry in Koblenz submitted an application for government approval of a private business school. The initiative came about as a result of the obvious shortcomings that characterized business administration studies at public universities in the 1970s and early 1980s. As an expression of their determination to bring about change, the founders of WHU set out the following priorities in their early strategy documents: performance orientation, practice orientation, internationality and personal development. What is remarkable is that these guidelines still define WHU’s basic philosophy today. The Chamber of Commerce and Industry’s application was daring for a number of reasons. The plan to establish a private business school to compete with public institutions was not a new one. Several previous attempts had failed. Why should this ambitious plan succeed in Koblenz? Indeed, obtaining the necessary financial resources for the start-up and later expansion turned out to be much more difficult than the founders, in their euphoria, had anticipated before the founding. It was thanks to the great commitment of the representatives of the Koblenz Chamber of Commerce and Industry as well as the first dean, Professor Sönke Albers, and his fellow supporters that the seemingly insurmountable initial difficulties were overcome.

But the start-up and its sparse funding were not the only challenges WHU has faced in the course of its history. In the wake of the Bologna reform, the business school had to open itself up to increased international competition. The management at the time courageously initiated an ambitious growth and internationalization process without which WHU would probably not be able to survive today. Now, 35 years after WHU’s founding, we can look with pride at an institution that has worked continuously to build its reputation and is today regarded as an internationally highly recognized business school with a strong research tradition.

In 1988, Professor Hans Bauer succeeded in gaining the support of Otto Beisheim, businessman and founder of METRO, for WHU. Beisheim, who was not able to pursue a university degree himself, was impressed by the still young, international business school with its performance- and practice-oriented approach. And so, in 1988, the Inge Beisheim Foundation began funding the Chair of Marketing, and a substantial donation from Otto Beisheim in 1993 finally enabled a very successful growth strategy. Otto Beisheim’s two foundations in Baar, Switzerland and Munich, Germany – to which all of his assets were transferred after his death – remain closely linked to WHU, both in spirit and financially. For many years, the chairpersons of both Beisheim foundations have also served on and presided over the Executive Board of the WHU Foundation.

Harald Winkel wrote the first history of WHU to mark its 10th anniversary. When Professor Klaus Brockhoff stepped down from the board of the WHU Foundation in 2018 after his 14-year term of office, we asked him whether he would be willing to continue this history. Brockhoff has followed the development of WHU since its founding: He served as dean from 1999 to 2004, and from 2005 he was a member of the WHU Foundation’s Executive Board, most recently as its deputy chairman.

Since retiring from the deanship, Brockhoff has devoted much of his time to the historical aspects of business administration. He has succeeded in meticulously researching the history of WHU and vividly recounting it, describing in impressive detail the many difficulties encountered during the founding years and how it was possible, thanks to the tireless efforts of many supporters, to lead WHU to the top group in the list of European business schools. We would like to express our sincere thanks to Klaus Brockhoff for this accomplishment.

Further thanks go to the current dean, Professor Markus Rudolf, his predecessor Professor Frenkel, Professor Weigand and Mr. Borkowsky, as well as to the members of staff of the business school who volunteered to provide information and document their own experiences and adventures.

We hope that this book will help keep the history of WHU alive. Historical writing is never neutral. Each author brings his or her own point of view to bear, makes judgments and sets priorities – and this description of WHU’s history is likewise subjective. Nevertheless, it is intended to provide interested readers, faculty members, students and alumni with fact-based information about an unusual but successful experiment. The history of WHU is also a story of the successful cooperation between the school and its private sponsors. Without their generous support, in some cases over many years, WHU would not have grown so quickly or sustainably.

At the same time, our aim is to further encourage broad public support for the idea of private educational institutions of international standing. We want WHU to continue to be an example of how students can gain access to excellent academic education regardless of their social and cultural backgrounds as well as through our various scholarship programs. Munich, February 2020

For the Professor Otto Beisheim Foundations:

Dr. Toni Calabretti

Chairman of the Executive Board

Prof. Otto Beisheim Stiftung, Baar

Dr. Fredy Raas

Chairman of the Executive Board

Prof. Otto Beisheim Stiftung, Munich

Foreword by the dean

Courage and commitment at WHU – Otto Beisheim School of Management

The beginnings

WHU was founded in 1984 as an alternative to public universities, and was deliberately intended as a thorn in the flesh of the existing university system. The year 1984 came after an era in which a social-liberal coalition government had been in power in Germany under Chancellors Willy Brandt and Helmut Schmidt for 13 years, from 1969 – directly after the student protests of 1968 – to 1982.

During this period, German society underwent a profound transformation that, among other things, addressed a common understanding of fair and democratically legitimized access to higher education. Although this shift was certainly understandable after the experiences of two World Wars, changes in policy led to radically different regulations for access to higher education and to a certain deterioration in the quality of public universities and their business schools. The core elements of this new approach to reform higher education in Germany were (i) that no tuition fees should be charged (this principle still holds true) and (ii) that the percentage of people with access to higher education among the younger generation should be significantly increased. While German society and public universities enjoyed a much improved understanding of democracy during this period, the educational system went from being one of the world’s leading systems to one characterized by relatively inexpensive mass education. In 1982, the Christian Democratic Union (CDU), with Helmut Kohl at its helm, succeeded the coalition government, leading Germany’s federal government together with the Free Democratic Party (FDP).

The first 20 years

These events paved the way for a tentative shift toward more competition in German higher education. The process of liberalizing the higher education landscape in Germany began relatively late, compared with other European countries. Spain, for example, was able to establish two first-class private business schools during the Franco dictatorship: IE Business School and IESE. WHU – Otto Beisheim School of Management (together with the founding of the European Business School) was possibly the first serious attempt to take advantage of this new freedom in Germany and to carry on the success of German universities before World War II.

From that point on, WHU’s goal was to stand up to the public university system in Germany and offer gifted students a higher quality of education. In contrast to public universities, admission was very selective and depended on an admissions test. Class sizes were small to allow for an intensive learning experience, which was something public universities could not offer. On the other hand, the study programs at WHU were subject to tuition fees, unlike those at the public universities. Internationalization and a technology orientation were firmly anchored in WHU’s basic charter in those days, and they are still considered two of its guiding principles. The “Diplom” degree program that existed at the time incorporated internationalization by requiring all students to spend two semesters abroad. Thanks to these principles – small groups, high selectivity, internationality and a technology orientation – WHU was able to offer an educational environment that attracted many of the most talented young people in Germany.

This approach worked well for many years – perhaps until the beginning of the new millennium – even though WHU charged tuition fees and German public universities offered free tuition, albeit for a comparatively low-quality education. The period between 1984 and the early 2000s shaped the competition in the German higher education system. Despite strong international elements, the old “Diplom” program at WHU still focused on Germany. After 20 years of existence, it became clear at the beginning of the new millennium that this mission would not suffice for the next 20 years. Thus a first step – and one that benefits the business school to this day – was taken as early as 1997 with the introduction of the Kellogg WHU Executive MBA (EMBA) Program. This is still one of our flagship programs, demonstrating the foresight that was shown in the early years of the school.

The past 20 years

It took some time before WHU was far enough in its development to understand that its future did not lie in the German system, but as an international business school competing for top-class young talent against the best schools in Europe (and in some cases worldwide). WHU began to realize that it needed to be international, diverse and English-speaking – requirements that sometimes still pose a challenge today. What certainly helped at the time was the introduction of the Bologna Process in Europe, which replaced the old “Diplom” program with modern Bachelor and Master of Science programs. Although the Bologna Process was obligatory because it was prescribed by the European regulatory authorities, the WHU Foundation and the WHU management team were reluctant to accept the idea that the days of the “Diplom” program were over. The Bologna reforms were introduced in 1998, but it took until 2005 before the first Bachelor cohort was accepted at WHU, and the first Master of Science cohort even had to wait until 2008. For the first time in its history, WHU was not a pioneer in Germany.

The primary arguments against a rapid implementation of the Bologna requirements were mostly quality-related: The Executive Committee at the time doubted whether the Bachelor program would be able to match the quality of the old “Diplom” program. While this argument could never be completely refuted in the European and German debate, international comparability was one of the obvious advantages of the Bachelor and Master programs over the national degree systems, and this argument was probably not given sufficient attention at WHU in the early 2000s. After 1998, it was possible almost worldwide to use a Bachelor’s degree from one country in another country. This effect was beneficial for students and has led to increased competition between business schools in Europe and throughout the world. The introduction of the Bologna criteria was thus a real game changer – suddenly WHU was no longer a German business school that competed against public universities in Germany. Since 1998, it has instead been one of a hundred excellent business schools in Europe, most of which charge tuition fees and all of which are international, larger than WHU, compete for the best talent, have small class sizes and offer not only their national programs but also Master, MBA, EMBA and Executive Education programs.

The institution was not really prepared for this new period and the new Bologna environment until the first Bachelor cohort arrived in 2005, and during those years, much time was lost between the creation of the single European Higher Education Area according to the Bologna rules and the start of our own Bachelor program. However, as soon as the Bachelor program began, the inclusion of international standards at WHU had a significant impact. The Bologna reform did not simply replace domestic degree programs with Bachelor’s and Master’s degrees; its main objective was the adoption of international standards.

One of the standards by which WHU lagged behind its competitors was size. An important factor in international competitiveness is that the size of the business school is close to the average size of its competitors. In the early 2000s, a former chairman of the Executive Board of the WHU Foundation claimed that a business school should be “small and beautiful”. This line of thought was driven by the notion that the fewer students and faculty members were admitted, the more selectivity and exclusivity would enhance the quality of the school. Today we know that the more outstanding students and faculty members there are, the more visible the business school becomes and the greater its potential to attract more outstanding people. That is why WHU developed and implemented a growth strategy at the time that aimed to simultaneously increase the business school’s quality and size. The WHU alumni organization was initially skeptical, but gradually began to support the growth strategy initiated in 2005, and this strategy has indeed improved the school’s competitive position with regard to its pre-experience programs. By 2015, WHU had reached the necessary size in both its Bachelor and Master programs.

Nevertheless, the overall business school was still significantly smaller than its competitors in terms of the number of students and faculty members. Growth, especially in the post-experience programs, was the primary issue addressed by the new management team of the WHU Foundation and the Executive Committee. In particular, it became clear that a change in mindset was needed for the MBA programs and Executive Education to grow. Whereas in the past, WHU sought to ensure excellence in student quality through a selective admission process, it now realized that selectivity alone was not enough to achieve the necessary quality and size at the same time. A much stronger sales orientation was necessary in order to increase both growth and quality: The MBA programs had to attract more applications from Germany and, above all, from abroad. This, in turn, would allow the business school to gain enough visibility to be able to develop its Executive Education program and catch up with the other excellent business schools in Europe.

Since then, an effective and systematic process has been developed and implemented to create a much more professional sales organization, and as a result, the Bachelor and Master programs have reached the critical size – at least for the time being. Since 2014, the MBA programs have grown by a factor of 2.5 and the Executive Education program by a factor of 8. WHU was now able to compete with its European rivals in the areas of Bachelor and Master, Part-Time MBA, Full-Time MBA and EMBA as well as the Open Enrollment Executive Education programs. Excellence has remained the key priority during the entire growth process since 2014: WHU is now by far the best institution of higher business education in Germany with regard to Bachelor, Master and MBA programs – i.e., all programs leading to an academic degree. At the same time, the faculty is publishing more research than ever before. WHU is now a respected European player that ranks among the top 25 business schools in Europe, having started out as a niche player in competition with the much bigger but also slower institutions in Germany’s public university system. But to achieve this, WHU had to reinvent itself 15 years ago – that is, 20 years after its foundation. The process was not easy, but eventually the management team, supported by the visionary WHU Foundation, was able to steer the school in the right direction. This reinvention was the basis for WHU’s current status as one of the best business schools in Europe and one of the top three in Germany.

Furthermore, it has become progressively clearer over the past 20 years that WHU’s alumni are a great asset to the school: The In Praxi alumni association helps us receive applications for our programs, strengthens WHU’s ties with the business world, brings practical experience to the lecture halls and, last but not least, provides WHU with financial support. Over the course of time, and especially in recent years, the close relationship between WHU and the In Praxi alumni organization has become more and more valuable.

The next 20 years

During the first 20 years of its existence, WHU’s ambition was to rank among the outstanding universities in Germany. The 20 years that followed (including the overlap period) were marked by a change of direction due to the Bologna standards. Afterward, the focus was on being one of the outstanding European business schools in Europe, and over the next 20 years, WHU wants to continue on this path of excellence. WHU is in excellent shape in 2020 compared with other European schools, but it is also clear that stagnation today cannot be an option for the future. The common goal of the entire community should be to become one of the top 10 European business schools and thereby catch up with the leading business schools in the world. To meet all the requirements associated with this goal, the faculty will have to grow to around 80 and the student body to 2,400. Simultaneously, a truly international atmosphere will have to be created, with English as the official campus language. If WHU should fail to achieve these ambitions, it is doubtful whether it will be able to maintain its current excellent positioning for the future. On the way to becoming one of the best business schools in Europe, it is necessary to balance the number of domestic and foreign students, as well as the number of women and men in all groups on campus. This may sound simple, but it calls for a significant cultural change at WHU. And such a change requires considerable additional resources – not an unimportant factor.

In any case, WHU – Otto Beisheim School of Management would no longer exist in 2020 without the change of direction that took place in 2005. Even though WHU’s core values (excellence, internationalization, community, entrepreneurship) have hardly changed at all in the years since 1984, they are now practiced in a completely different way than 20 years ago. Between 1984 and 1998, it was enough to attract the best researchers and the best students from Germany. The result was a culture dominated by Germans (most of them men). Today, we compete with institutions such as London Business School or HEC in Paris – and in some market segments even with the best schools in the United States.

To be competitive and at the same time stay true to our traditional core values, we will have to break new ground again. And this time, WHU will probably not have as long a transition period as in 1998, when the Bologna rules were introduced. Instead, it will have to rush to keep pace with the increasingly competitive character of other European business schools. Due to its special situation at the beginning of the last century and all the developments in the higher education system after the Second World War, Germany is certainly one of the weakest countries in the EU in terms of business school education – which explains why not even WHU is considered a European champion in the “market” for business schools. However, it is one of the few business schools in Germany that is capable of becoming one of the best schools in the world. Since its foundation in 1984, the school has repeatedly demonstrated its innovative strength, and it will continue to benefit from this and remain in good shape for the next 20 years. I wish the school and its stakeholders courage and commitment always – then success will be sure to follow.

Markus Rudolf

Montabaur, December 9, 2019

Foreword by the author

Ten years into WHU’s existence, patron and innovative entrepreneur Dr. Herbert Krautkrämer asked Harald Winkel to write the first history of the school. To date that book has been the only comprehensive source of information about the private business school created as a result of an initiative by the Chamber of Industry and Commerce in Koblenz. Today, 35 years after its rocky start, WHU has an international reputation enjoyed by scarcely any other private business school in Germany. We owe this to many people, but especially to another patron: Professor Otto Beisheim, whose financial support remains unequaled to this day. During his lifetime, he rendered outstanding services to WHU as a critical, interested and generous sponsor – which is why WHU has proudly used his name as a subtitle to its own name since 1993. After his death, the foundations he established have continued his charitable work in the most generous manner. Many will be aware that WHU Beisheim – or simply Beisheim as it is known in some international rankings – is precisely the business school that is the subject of this book.

The initiative for writing this book came from the representatives of the Beisheim Foundations, Dr. Toni Calabretti, Dr. Fredy Raas and Hugo Trütsch, and it is my pleasure to thank them most sincerely for it. They gave me an exciting task and actively supported my work through many ups and downs, providing me with helpful tips and comments. In addition, I have fond memories of many encounters with Professor Otto Beisheim, who placed a great deal of trust in me.

The work on this history was both complicated and aided by the business school and its staff. It was complicated by the fact that there was no archive organized on the basis of professional criteria. It was aided by the contributions of many members of the school – first and foremost, the staff of the WHU Foundation. Stephanie Daleki and Vicky Hansen had already begun many years ago to electronically store important documents on the activities of the foundation’s and business school’s bodies. Though there are some gaps in the data, the work on this book would have been much more laborious without their efforts. Moreover, both of them were always willing to offer advice on the text and to help with technical problems related to the preparation of the manuscript. Ms. Daleki also applied great meticulousness and intuition in searching for and finding documents that would provide evidence for as many events as possible, and for this she deserves my special thanks. I would also like to thank the acting dean, Professor Markus Rudolf, as well as the head of administration, Peter Christ, for supplying me with materials and working space at the business school and for providing constructive criticism. Long-standing staff members of the school and foundation, whether past or present, helped me interpret incomprehensible transcripts and contributed valuable material. Above all, I would like to mention Professor Horst Albach, Professor Sönke Albers, Professor Hans Bauer, attorney Jürgen Büring, Professor Michael Frenkel, Professor Wilhelm Pfähler and Professor Jürgen Weber. Staff members Dr. Katharina Baedorf, Nadine Günter, Monika Helm, Claudia Heyman, Heidrun Hoffmann, Heike Hülpüsch, Andrea Kron, Dirk Jonach, Eva Kohl, Hanne Mai, Vincent Meertens, Daniela Nowak, Kerstin Nicolai, Nadine Salz, Stefanie Schweins, Klaudia Wilde, Jennifer Willms and student Lukas Zervudakis assisted me by supplying material. Jörg Borkowsky and Stefan Schubert, members of the board of the alumni organizations, reviewed and added to the chapter on In Praxi. Ruth Spiekermann served as creative production manager for the English edition of the book. I extend my sincere thanks to all of them.

I was kindly supported by the Rheinisch-Westfälisches Wirtschaftsarchiv, a business archive in Cologne, where Dr. Hans Schoser had deposited his records. The same applies to the Landeshauptarchiv in Koblenz, where I was able to inspect files archived by the state government (State Chancellery and Ministry of Culture) from the days of the business school’s founding.

We tried to find photos for many of the subjects addressed, and almost all of them are from the archives of the WHU Foundation or the business school. Many were taken by professional photographers, some by students or staff. The photographers of these distinctive shots also deserve my thanks. Unfortunately, some photos had to be left out because we were unable to identify the photographers or the persons depicted.

Finally, an editorial team composed of Dr. Calabretti (Chair) and Dr. Raas from the Beisheim Foundations, Professors Rudolf, Weigand and Frenkel from WHU’s Executive Committee and Mr. Borkowsky as Chairman of the In Praxi alumni association reviewed the draft text and made suggestions for its improvement.

In terms of methodology, I had access to both oral history and written sources, although the two did not always coincide. Written information could often be compared: The results of senate debates are typically made public or discussed in subsequent meetings of foundation bodies, and this made it possible to achieve a high degree of validation.

I have four comments to make on the following text. First, I have chosen not to use academic titles in the running text. Most of the people mentioned in the text hold a title, which is not surprising in a business school environment. Second, for the most part I only use people’s first names when they are first mentioned, unless there are people with identical last names and the first name is necessary to avoid confusion. Again, this is not intended to be discriminatory in any way. Third, I modeled the structure on that of another book. Melvin T. Copeland organized the first parts of his history of Harvard Business School (And Mark an Era, Boston et al., 1958) in accordance with the passage of time. Like Copeland, the author assumes that not every reader of such a book is interested in all the details. For this reason, subjects that are likely to be of particular interest for certain readers have been removed from the first chapter, “History in brief,” so that they can be dealt with in greater detail later on. Fourth, it should be noted that the literature was selected primarily with a view to using sources on private business schools in general and on WHU in particular. The literature on the economics of higher education institutions is much more extensive, of course.

Professor Erich Schneider, the then famous economist from Kiel, would occasionally surprise his peers by saying: “I’m going to mention you in my memoirs,” or “You certainly won’t appear in my memoirs.” No one was ever quite sure which option was better, but in any case, his memoirs were never published. This anecdote gives me the opportunity to apologize to all those who do not appear in this history, even though they rightfully know that they are connected with it in one way or another. Likewise, I apologize to those who appear here but feel that their work is not properly reflected. This account of WHU is subjective. In particular, it is not possible to fully acknowledge the many awards and accomplishments that deserve mention. Aspects such as topicality and thematic diversity have influenced the selection.

It is a great pity that I did not have the knowledge I gained through working on this book about WHU when I took up my position as dean. I could have spared myself many a disappointment and would not have appeared quite as naive as some people probably perceived me to be. I would be delighted if members and friends of the business school were to read the book and have an “aha!” moment or two. Above all, I hope that they can take something away from it. Maybe they will be able to make or justify their decisions more easily by looking at the history of the school. But even if people only read the book for entertainment, I won’t be disappointed. What would please me most is if the book gave readers a deeper and more rational foundation to their pride in this great business school, which has been built up by so many people with incredible dedication. Among these people are, of course, the students. The quality of services can be greatly improved through the cooperation of those for whom they are intended. This is what makes life both strenuous and enriching for faculty members.

What is the readership I’m hoping for? Hopefully many current and former members of WHU. In conversations I have often discovered that knowledge of the institution is much more limited than one would expect given all the information available. I can therefore promise that readers will learn many new things from this book. It would also be wonderful if people interested in the development of higher education institutions in Germany could be persuaded to read at least part of the book. This might help reduce the prejudices against private business schools in general and WHU in particular. Perhaps they will even disappear altogether. I hope that reading this book will give all those considering supporting WHU the confidence to make a strong and responsible educational institution even stronger. First and foremost, their support will help promote the development of people whose work will make the lives of many others richer and fuller. This has been observed quite conclusively in the past, and we can expect it to be the same in the future – assuming that similar, non-discriminatory principles guide the admission of particularly ambitious students, that high quality standards are set for all lecturers, that lecturers are committed to their work as motivated teachers and researchers, that a willingness to serve makes relations between all members of the business school easier, and that everyone remains open to new ideas.

Klaus Brockhoff

Koblenz and Vallendar, May 2019

Translator’s notes

The academic environment in which WHU – Otto Beisheim School of Management operates is quite different from educational systems in other countries, English-speaking countries in particular. The translation of the original text written and published in German required a considerable number of compromises to make it more readable in English.

A few examples will help clarify this. The WHU Foundation as a legal entity includes the operations of the business school. The foundation operates on the basis of statutes (Stiftungssatzung), while the business school has a charter (Grundordnung). Various organs and committees bear specific names in German, for which we have chosen terms in English. For instance, the dean is a “Rektor” in German and the “Rektorat” is the Executive Committee, while the board of the foundation has a Management Committee and a manager (Geschäftsführer). And for brevity, all references to records of meetings are called “minutes” even though the official German names for those documents vary over time. However, we have left the German “Diplom” to describe the traditional degree program at German universities prior to the introduction of Bachelor’s and Master’s programs, because it is uniquely German and no English term captures its essence.

The Otto Beisheim School of Management is a university-level educational institution, which we refer to here variously by its name or as the business school, WHU or the university. However, the reference “university” should not be understood literally: In Germany, it is reserved mostly for educational institutions that offer degrees in many fields, not just in one field such as management.

In short, we have aimed for naming conventions that allow the reader to focus on the content rather than struggling to keep track of the various bodies and entities. Even so, the German text should be consulted in matters where legal precision is required.

Leinhäuser Language Services GmbH

Dedication

This book is dedicated to all those who went above and beyond what was expected or necessary to advance an institution that, at the time of its foundation, appeared to be barely viable: the Wissenschaftliche Hochschule für Unternehmensführung or WHU for short. It is also devoted to the memory of those who stood up for the school and placed their trust in it – as protagonists of the idea, as supporters and friends, as members and alumni – and who have since passed away. In particular, it is intended to pay tribute to the man whose name the school bears as a subtitle: Otto Beisheim. The book is also dedicated to all those who, at the time of publishing, are eager to support this special educational institution by contributing good ideas, their work or the necessary resources. WHU – Otto Beisheim School of Management is a magnificent collaborative effort, carried by something very special: Internally, it is known as the WHU spirit. May this good spirit continue to prevail in the future!

Contents

1 History in brief

1.1 From 1983 to 1993

Starting situation

Groundwork

A flying start

1.2 From 1993 to 1998

The Beisheim commitment

Otto Beisheim – the entrepreneur

Continuing education – initial extensions to the curriculum

New attempt at an old topic: a second faculty or the integration of new programs?

Elements of additional internal growth and recruitment of a dean from outside the school

1.3 From 1999 to 2005

A difficult start for the dean

New activities and facilities

Succession issues for the deanship

1.4 2005: A new program structure – and a new path for WHU

1.5 From 2005 to 2018

WHU’s 25th anniversary

A strategy for the period till 2016

Partnership with Bucerius Law School

Düsseldorf – a second campus

Ever more international

Promoting entrepreneurship

Two terrible deaths

The new dean’s strategic goals

1.6 WHU: the foundation and the university in 2018

The WHU Foundation

WHU – Otto Beisheim School of Management

1.7 Conclusions: clear success factors

Ambient success factors

Management-related success factors

2 Values and goals, visions and missions

2.1 Orientations during the start-up phase

Five elements or orientations

Degree programs only for the rich?

A symbol

2.2 Five years after the degree programs began

2.3 Review after 10 years

2.4 A claim to provide orientation

2.5 Other elements of a value orientation

More “human touch ” and a new mission statement

A code of conduct

Guidelines for third-party funding

Safeguarding good scientific practice

2.6 The “brand house”

2.7 Role models and honors

2.8 Students as multipliers in discussions of values

3 Governance structures

3.1 Overview of structure

3.2 WHU’s sponsor

3.3 The trusteeship foundations

3.4 The university

Organizational structures

Beyond the corporate bodies

3.5 Complex administration

IT support at WHU

WHU management and program administration

3.6 A few observations

4 Education and continuing education programs

4.1 Teaching activities at WHU

4.2 “Diplom” program

Admissions process

Program structure

Career Center and International Relations Office

External accreditation

4.3 Bachelor of Science program

4.4 Master of Science programs

Master in Management

Master in Finance

Master in Entrepreneurship

Customized Master of Science in Management and Entrepreneurship

4.5 Master of Business Administration programs

4.6 The Executive MBA program

4.7 Doctoral programs

4.8 Executive education

4.9 Rankings and other indicators of program success

4.10 High school academy

4.11 WHU as multi-program provider

Complex structures

Will everything be superfluous in the future?

5 Research

5.1 Great changes

5.2 Systematic difficulties

5.3 Research during the initial years

5.4 Improving research success

5.5 Transferring knowledge to practice

5.6 The effects of research in academia

Junior staff in academia

Services for the academic community

Publications and citations as indicators of success

Awards for research excellence: some examples

The issue of research planning

6 Assets and financing

6.1 Basic objectives

6.2 Foundation capital and its preservation

6.3 Investment assets

6.4 Land and buildings

6.5 Property and equipment not recognized in the balance sheet

6.6 Revenue trends

Overview

Research funding, tuition and course fees

Financing problems: past highlights

6.7 Expenses and income

Attempt at an overview through 1993

The years following the large Beisheim donation

6.8 Relations with sponsors

Dependence on sponsors

Approaching sponsors

7 After the degree: In Praxi

7.1 Initial idea

7.2 The growing organization

7.3 Where graduates end up working

7.4 Further steps

8 Insights

8.1 Intensified competition

8.2 Small WHU

8.3 The significance of reputation

The long road to creating a reputation

Media presence

8.4 Reliable financing

8.5 Service orientation and willingness to cooperate

8.6 The high art of university governance

9 Appendices

9.1 WHU Foundation committee members

Members of the Administrative Board of the WHU Foundation, 1985 to 1986

Members of the Board of Trustees of the WHU Foundation, 1987 to 2004

- Members of the Board of Trustees of the WHU Foundation, 1987 to 2001

- Members of the Board of Trustees of the WHU Foundation, 1990 to 2004

Members of the Executive Board of the WHU Foundation, 1984 to 2018

- Members of the Executive Board of the WHU Foundation, 1984 to 1993

- Members of the Executive Board of the WHU Foundation, 1994 to 2004

- Members of the Executive Board of the WHU Foundation, 2005 to 2018

- Members of the Executive Board of the WHU Foundation, 2011 to 2018

9.2 Deans, heads of administration and associate deans, 1984–2019

Deans and heads of administration of WHU – Otto Beisheim School of Management, 1984–2019

Associate deans of WHU – Otto Beisheim School of Management, 1987–2019

9.3 Honors

Honors bestowed by WHU

- Honorary dean

- Honorary senators

- Honorary professors and their research fields at WHU

- Honorary doctorates

- Senior fellows

- Honorary medal recipients

- Naming of facilities

- Naming of organizations (as of March 2019)

Honors bestowed by the WHU Foundation

- Ring of honor

- Silver pin of honor

- d’Ester Prize recognizing exemplary social commitment by students

Honors bestowed by In Praxi e. V

9.4 Faculty and employees

Groups, professors and junior professors (as of Aug. 1, 2018)

First position taken by habilitated post-docs or junior professors from WHU

WHU faculty members and duration of their service

Annual average of employees and average number of faculty for fiscal years 2000/2001 to 2016/2017

9.5 Centers and institutes (as of Aug. 1, 2018)

Centers (as of August 1, 2018)

Institutes (as of August 1, 2018)

9.6 WHU student exchanges – partner universities by region and type of exchange program (as of Sept. 1, 2018)

9.7 Map of the WHU buildings in Vallendar

9.8 Participants in education and continuing education in the 2017/2018 academic year (as of Sept. 30, 2018)

9.9 Degree programs 2018

9.10 List of references

Archives, registers, undisclosed communication

Personal information

Publications

Internet sources

1

History in brief

1.1 From 1983 to 1993

On October 1, 1984, on the initiative of the Chamber of Commerce and Industry (IHK) in Koblenz, a controversial private higher education institution opened its doors to students: WHU – Wissenschaftliche Hochschule für Unternehmensführung.1 The origins and early history of this unusual business school have already been covered in detail, thus this book will go beyond that.2 In Germany, establishing a private university was – and still is – a risky venture. Commenting on the Chamber of Commerce and Industry’s plans before the Association of German Chambers of Commerce and Industry, one speaker summarized, “Over the last 15 years, 10 attempts to establish private universities have failed; five of those were intended to be ‘elite’ universities.”3 What is WHU’s story? That is what we’ll describe here.

In September 2018, WHU had 1,560 students in eight degree programs. In fiscal 2017/2018, the business school had 1,292 participants in continuing education programs for companies and short-term programs for students from partner institutions abroad (Chapter 9, Appendix 9.8). Teaching was provided by 52 professors and 97 external lecturers. WHU had partnerships with 204 universities worldwide. WHU alumni remained extremely loyal to the business school, with the alumni association comprising 4,200 members. How was all this possible?

Starting situation

No intimate knowledge of the German higher education landscape was needed to see its obvious and serious deficits, especially when it came to the teaching of business management. Fortunately, at the Chamber of Commerce and Industry a keen interest in educational matters coincided with the will to effect change. It was obvious that this wish could not be fulfilled by exerting influence on the public universities, the majority of which are funded by Germany’s federal states. Moreover, the deficits were simply too grave, especially from the point of view of practice. Five inadequacies were particularly obvious:

• Operations research did not always allow business management theory to be expanded and modified in a resilient manner. The sense that the available teaching programs and research were becoming increasingly detached from practice was substantiated by advances in mathematical, decision-oriented business management and what were perceived as the complicated requirements of robust empirical research. It was no longer possible at public universities to enforce the formerly widespread demand that students furnish proof of practical professional experience (in particular a completed apprenticeship).

• The closely meshed network of companies engaged in foreign trade considered it odd that only a small number of students had gained any experience abroad, whether by studying or completing internships there. Likewise, only a small minority of the university teaching staff had worked or studied abroad. Some considered these experiences to be of little use as long as parts of the business management curriculum remained oriented to national conditions – which was the case for a very long time in the fields of human resources and accounting.

• In addition to these deficits, business management had become an extremely popular field of study, pushing up the number of applicants for courses. The problem was not remedied until the courts compelled the universities to accept unreasonably high minimum intake limits leading to overloads in student-teacher ratios, and planned-economy methods such as the centralized distribution of applicants between different universities had been introduced.4 Although university graduates received excellent training in methodological terms, they had personality deficits that undermined their suitability to lead companies, and educational methods modeled on mass production left virtually no scope for shaping students’ personalities.

• A further factor was the growing impression that societal trends were leading to a decline in students’ levels of motivation. In contrast to the past, reliable grading and rules for awarding diplomas were no longer indicators of motivation. Many considered the standard time needed to complete a degree program to be nothing more than a polite suggestion and a variety of excuses was offered for taking longer: inadequate degree program organization and conditions, for instance, or the need to hold a job in order to finance a certain lifestyle.

• Finally, some segments of the population were seen to fear or reject new technology, including the introduction of ever-more powerful “electronic computers” in the corporate and public sectors, and this spread to universities as well.

Against this backdrop, the idea of establishing a private business school free of such deficits must have seemed both plausible and attractive. According to some critics, such private institutions should be a “thorn in the flesh” of public universities. And since the chorus of those complaining about the deficits was large, it didn’t seem terribly difficult to find supporters for their rectification. Even so, any private course of study would naturally have to meet formal requirements for recognition by the state in order to give its graduates the same professional opportunities as those from public universities.

In Germany of 1980, many people found the idea of a private business school revolutionary. But it wasn’t; the country had had private commercial colleges since 1898. The pioneers of this trend were private commercial academies, but economic and political factors – World War I and periods of (hyper-)inflation thereafter – had shortened their lives. However, in the 1980s the European Business School (EBS), for instance, had been founded as a university of applied sciences in 1981, and an anthroposophical university had been established in Witten-Herdecke in 1983. Church-sponsored universities, too, have a long tradition in Germany. Elsewhere, especially in the United States, there were some excellent private universities with renowned business schools.

Groundwork

Thus it was a happy coincidence that Udo Glittenberg, who had stepped down from the management of EBS, fell into conversation with Karl Darscheid, CEO of the Chamber of Commerce and Industry. Their discussions resulted in the idea of founding a private business school with university-level standing.5 Hanno Ludwig, president of the Chamber of Commerce and Industry, found their first rough plan compelling (see Figure 1). After it gained more concrete form, the Chamber of Commerce and Industry’s presidential committee and annual members’ meeting were drawn into the project.

In 1983, an initial idea was put forward for a “Diplom” degree program limited to eight semesters, including two semesters studying abroad, foreign-language training, and mandatory internships in Germany and abroad.6 In response to four of the five deficits of public universities mentioned above, the following “fundamentals” and “guiding principles” were viewed as desiderata for WHU:

• “Performance orientation thanks to small groups for both teaching and research; mandatory attendance at courses; ongoing performance evaluations; and a time limit for degree completion of eight semesters.

• Practice-oriented approach to teaching, research and study through the involvement of leading professors and business practitioners; several months of project work by students in partner companies (with the supervision of the business school); practice-oriented case studies; and close contact with the problems that companies face. Students are expected to have completed a commercial apprenticeship.

• International atmosphere thanks to mandatory semesters studying (in the respective languages) at partner universities in the UK, France and later also in the United States as well as mandatory internships abroad.

• Personality development of students and graduates by all those at WHU with a view to enabling students to achieve their full career potential. The goal is to create an academic community for teaching, research and life.”7

Figure 1 Three protagonists of WHU.Photos: Reuther; H. Gauls; H. Gauls

As outlined by the authors (Darscheid, Glittenberg and Frank Pelzer), these fundamentals were very general, in part quite ambitious, and formulated on the basis of practical experience. They also included the requirement that all applicants submit to an admissions process designed by an appropriately qualified institute to determine the applicants’ interests and capabilities. Among other things, this process was intended to keep dropout rates low.

On July 8, 1983, the Chamber of Commerce and Industry “and, in view of his many years of pioneering work for the idea of a private university in Germany, Professor Dr. Udo Glittenberg,” submitted an application to the corresponding ministry of education for official recognition of the new business school. Several rounds of talks followed. The ministry of education informed the state chancellery of its support for the project and recommended its implementation “in order to ensure plurality and competition in higher education.”8 The ministry expressed similar opinions to the Chamber of Commerce and Industry.9 At almost the same time, the “Stifterverband Private Universität Koblenz – Wissenschaftliche Hochschule für Unternehmensführung e.V.” (association of sponsors for the private university of Koblenz – school of business management) was entered in the register of associations, with statutes dated December 19, 1983.10 Darscheid and Ludwig were named as board members. This created three problems: The “Stifterverband für die Deutsche Wissenschaft” (an association of sponsors for German science) criticized the similarity between the two associations’ German names, while the ministry criticized the use of the term “university” and also demanded that the association name a funding body. Precautions had already been taken for the latter in Article 2 (II) of the statutes mentioned above, which provided for the establishment of a “public foundation” (but definitely not a public-law foundation). Following the presentation by State Minister of Education Georg Gölter at the cabinet meeting of January 10, 1984, the state government stipulated that the planned tuition fees were not to function as a means of selecting students on the basis of income (a practice known as “segregation” or “separation”) and underscored that the state government would make no commitment to fund the school.11 The proposed “Wissenschaftliche Hochschule für Unternehmensführung” foundation, the body intended to fund the business school, was approved on March 21, 1984, in Koblenz by the then president of Rhineland-Palatinate’s regional government (Chapter 3).

Before the business school could be established, many details remained to be dealt with and three main requirements needed to be met – a detailed concept had to be developed, the state government of Rhineland-Palatinate needed to be convinced of the project, and the creation of a financial basis was necessary with the involvement of as many Chamber of Commerce and Industry members as possible.

Even though the educational deficits outlined earlier were obvious, that didn’t mean the protagonists had a concept at hand for a “university of business management” – as the institution was referred to by insiders at the time. It was a clever decision to place the development of the concept in the hands of a group of experts led by Horst Albach, a business administration professor from the University of Bonn,12 with 11 other people as members.13 The group’s concept was presented to the new university’s founding senate, which was appointed on January 31, 1984.14 The senate comprised not only Albach, but also the professors Gerhard Fels, Eduard Gaugler, Peter Mertens, Klaus Rose and Horst Wildemann – essentially all of the economists in the group of experts.15 Moreover, initial drafts of the degree program regulations and “Diplom” examination regulations had to be drawn up; these were analyzed in detail by the ministry, which added its own suggestions for changes, and were returned to WHU for discussion.

Figure 2 State government members who supported the project: Minister President Bernhard Vogel (photographed here in 2009) and State Minister of Education Georg Gölter.Photos: from Gölter’s private collection, 2013, G. Juraschek

After the “WHU Foundation”16 had submitted an extensive application, state recognition was granted on certain conditions just in time for the beginning of the university’s activities on August 20, 1984.17 Recognition was preceded by intensive talks with the responsible ministry as well as with Minister Gölter, various state secretaries and leading officials. The state cabinet also consulted and voted on the proposal.18 Minister President Bernhard Vogel had to be persuaded as well. Criticism of, and even hostility to, the idea of a private business school came, in particular, from the SPD (Social Democratic Party) in state parliament, from trade unions and from student councils of neighboring public universities. Coverage of the project in the press was lively and controversial and stretched all the way to the argument that the proposed promotion of the elite could turn out to be unconstitutional.19 In response to questions raised by the opposition, the proposal to establish WHU was discussed by the Rhineland-Palatinate state parliament on March 30, 1984,20 and again on May 24, 1984, after an essentially positive draft resolution on the project from the committee for education policy.21 However, even after the project phase was over the business school continued to meet with considerable political resistance.

By August, most of the conditions for state recognition had been fulfilled: the establishment of a foundation as the school’s funding body; organization of an objective admissions test for students;22 agreement to provide full and partial scholarships to 20% of the students and a cap on tuition fees (DM 5,00023 per semester was considered to be too high although EBS charged annual tuition fees of DM 7,500 and received a state grant of DM 6,000 p.a.24); and the submission of partnership agreements with foreign universities for the planned study abroad program. The ultimately negotiated versions of the study regulations and “Diplom” examination regulations were also made available; in this respect, the ministry had been concerned that students would lack free time for independent work.25 Expectations of personnel and material expansion over a four-year period were formulated, indicating expected future growth. Two particular problems remained unresolved until August 16, 1984: the submission of the future business school’s charter as drafted by the foundation and proof of financing (in part through guarantees) for a four-year course of study.

It was not just in this phase that the financing issue proved more difficult to resolve than originally anticipated. A “business plan” from 1984 shows in that year’s prices what requirements would need to be met during the following five years.26 Excerpts are shown in Table 1. Tuition fees were set at DM 10,000 p.a. and it was assumed that 20% of the places would be awarded free of tuition. Despite optimistic estimates for the number of first-year students, a substantial gap between funding and total expenses opened up as of 1986/1987 that was attributable largely to the increase in personnel numbers evident in Table 1. The plan provided for two professors to start with, but that number was to rise to five after just three years. If the funding gap was to be closed solely with income earned on the foundation’s capital, almost DM 15 million in capital would be required (assuming a return of 8%). Given the same return, this capital stock would have had to be twice as high after four years. In this situation, the state government feared being called upon to fill the funding gap and took the precaution of ruling out any financial contribution on its part, even though it would have been legally possible. The government’s fear was also fed by diverse and seemingly contradictory information provided to the government about the foundation capital raised and the grants received. Any financing commitment or guarantee on the part of the state government would presumably also have led to major problems in parliament. As a result, in their letter to the state government of August 16, 1984, those pushing for establishment of the business school stated that they would raise the foundation capital of DM 21 million themselves and would not claim any state subsidies from Rhineland-Palatinate, either then or in the future.27 Unfortunately, they didn’t succeed in their fundraising. Compared with the school’s financing requirements, they didn’t even manage to obtain any corporate donations that could be considered “major” – and since the Chamber of Commerce and Industry members were mainly SMEs, this was hardly surprising. The founders received much encouragement from some large German companies, including a very substantial financial commitment of DM 350,000 annually over a period of ten years from Ms. Gertrud Reemtsma.28 Ultimately, at its request, the state government was provided with proof of a package of guarantees totaling DM 12 million. It included not only Ms. Reemtsma’s donation, but funding from Sparkasse Koblenz (a local savings bank), BHF-Bank Frankfurt, and the Chamber of Commerce and Industry.29

Table 1 Economic plan 1984–1989 (excerpt; value declarations in DM).

Source: Wissenschaftliche Hochschule für Unternehmensführung Koblenz …, VI/1984, op. cit.

While it was in the process of being set up, WHU was allowed to rent premises from the city of Koblenz in an unused grade school building in the Karthause suburb, where the students had to sit on pint-sized chairs and big lectures had to be held in the gym. In addition to copied manuscripts, the only didactic aids the lecturers had at their disposal were blackboard and chalk (Horst Albach, Figure 3). Probably over-skeptical of the project, the city government wasn’t prepared to contribute more. One political decision-maker was quoted as saying: “Die Leit gehiere nit zu ons.” (“Those people don’t belong here.”)

Figure 3 Classroom teaching during WHU’s first year.Photo: G. Juraschek

A flying start

As Darscheid noted in his speech to mark the opening of WHU: “The new Koblenz business school is ready. Finally. The path to this moment was long and arduous, fraught with inadequacies, and characterized by improvisation, mistakes and failures. But it has been worth it.”30 It wasn’t just the preparation phase that warranted this description; vision and reality continued to diverge noticeably.

The student numbers assumed in the business plan (Table 1) were not achieved. At the start of the first semester, only 48 students enrolled, not the estimated 60. In each of the next two years as well, enrollments totaled only 42 and 45 respectively, instead of the planned 100. What is more, in the first cohort in particular many students left after their intermediate exams; only 35 went on to submit a “Diplom” thesis.31 Indeed, it would take more than 15 years to get the annual intake up to 100 and more, and this naturally had an impact on income from tuition fees.

Initially, teaching operations could not have been maintained without the support of external lecturers – in fact, they made up the majority of the teaching staff. When WHU opened its doors, only the chair of marketing had been filled by Sönke Albers (Figure 4). The corresponding contract with him was signed on September 8, 1984, in the village where he was vacationing. Only thus was it possible to meet the state government’s condition that the school begin operating on October 1 with at least one professor in office. Since Albers rejected the term “Dozent” (lecturer) as his job title, the designation “Professor im Privatdienst” (private-sector professor) was coined and is still in use today. Albers left WHU in the spring of 1986.32

Figure 4 Dean Sönke Albers (1984).Photo: WHU

The plan to fill the second chair – which had a focus on industrial business management – initially failed. In May 1985, Wolfgang König was appointed as the chair of Business Information Science and Information Management, remaining at WHU until 1990. His research projects drew attention to the need to expand the four functions anchored in the founding philosophy to include a technology orientation, so that insights on the latest technological developments and innovations could be taught as the “basis or driver of business progress.”33 This proposal found support in a speech with the title “Managing new technology – how much basic training does a manager need,” which Heiner Müller-Merbach made on October 1, 1986.34 Jürgen Weber taught internal accounting and controlling from March 1, 1986 onward, initially as a lecturer. After completing his habilitation (postdoctoral university degree with a lecture qualification), he was appointed professor in August of the same year. This was the same procedure used for König’s recruitment and it became a model for later professorial appointments. To this day, Weber has remained loyal to WHU despite various offers from other universities. After Albers left, his position was filled almost immediately by Hans Bauer, who remained at WHU until 1993, when he was succeeded by Christian Homburg. Wilhelm Pfähler, the first professor of Macroeconomics, taught at WHU from December 1, 1986, till March 31, 1992.35 The recruitment of bank manager Adolf-Friedrich Jacob was a novelty: In an expert opinion presented to the senate, Albach affirmed that Jacob’s publications constituted the equivalent of a post-doctoral degree.36 Table 2 provides an overview of the professorial appointments during the time period covered here.

Table 2 Faculty appointments 1984–1993.