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Friday, September 18, 2020

Comments on _Critical Chain_, ch 5

The scene involves BJ, the University Professor, and another guy named Chris Page talking about setting next year's budget.

They are discussing a previous instance of a university that saw a dip in demand and almost going bankrupt. It was agriculture. They think that their business school doesn't have that problem.

“Without a doubt. Today, if you want to climb the corporate ladder you must have an MBA."

Maybe that was already changing and could change dramatically soon enough.

Then BJ mentions a law school that is seeing declines in demand and that's an industry that requires law school by law, unlike business schools (no law requiring it).

“[Law schools] are facing a real problem, he told me. New student enrollments at their law school are less than half compared to three years ago."

BJ explains why there was a drop in demand.

“Being a lawyer became a real fad," she starts to explain. "No wonder, considering the base salaries that were being offered. There was a flood of young people wanting to be lawyers. The schools ballooned. Almost a replica of the story I told you about my old university."

... it's because demand was artificially high, and demand was just dropping to the reality.

“Being a lawyer became a real fad," she starts to explain. "No wonder, considering the base salaries that were being offered. There was a flood of young people wanting to be lawyers. The schools ballooned. Almost a replica of the story I told you about my old university."

This seems similar to lots of other things. People do stuff because lots of other people already are. Most people are not thinking in terms of supply and demand when they choose to go to school or choose a school program. Part of the problem is that government incentivizes going to school, which causes artificial increases in demand.

Page says that demand for MBA is not dropping.

It doesn't work. B.J. is not impressed. "Isn't the growth in enrollment at our business school the smallest it has been in years?"

That's a drop in demand!

"A temporary phenomenon," he dismisses it. "Nothing to worry about.”

How does he know? This sounds like someone just shutting his mind shut.

What he should do is look at those numbers to see if there's a trend in the dropping.

Page cannot afford to leave it like this. "B.J., how can I put your mind at rest about this?" He signals that he is ready for business.

This is a bad attitude. He's not even looking at this as if maybe he's wrong. He's only trying to convince her to his side. He should be trying to see both sides. He's biased to his side.

“I'm not concerned with the immediate future," she responds. "My nightmare is to be stuck with an expensive burden that will be almost impossible to trim. For example, vent are budgeting for tenure for eight more professors. If push comes to shove such decisions may kill us. What about putting a freeze on all tenure, at least until the situation becomes clearer?"

That's a good attitude and policy. And I think it's something that should be done every single year (or more often). 

“No, B.J., that would be a mistake. We need these people. If we don't give them tenure now, we have to let them go. Think of the implications. Think of the shock wave it would send. I understand your concerns, but, in my opinion, there is no reason for alarm. Definitely no reason for such drastic actions."

I don't understand why they have to wait to get the answers. It seems simple enough to figure out pretty quickly. 

“To his surprise she is not willing to counter-offer her number. "I'm still worried that what is happening in law schools can happen in business schools," she insists. "What are you suggesting we do about the possibility of a change in the trend?"

yeah bring the issue back to finding out whether or not this year's drop in demand is an anomaly.

“Exactly right," she sails along. "Do we agree that the first, decisive indications will appear as the ability of graduates to get jobs?"

ah yes. The next line in the chain after getting an MBA degree is getting a job (or a promotion I guess). So like find out if the percentage of conversions (from degree to job) is dropping over time.

“We don't have time for committees, Chris." Before he can object, she turns around and walks to her desk. "Here are the results of our new survey. I think you'll find it interesting. Even quite alarming. But once you study it, I'm sure you'll agree with me that we have to put a total freeze on granting more tenure."

oh shit, she already did the data collection and analysis of the issue of conversion from degree to job.

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