The Rise of the Corporate University

Three Case Examples

One of the prominent examples of a corporate university is Mars University (Rademakers 2014). The most remarkable characteristic of this educational institution is that it is not a facility with a certain building or campus; instead, it is a network of learning present wherever the company itself is present. However, Mars University does not only offer educational programs but also features a library and a research centre. Mars University positions itself as an improved form of a business school and offers education that helps build a career in various spheres, including marketing, engineering, and management. Mainly focusing its education on leadership and engagement, the university has received many awards from the global business community.

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A noteworthy feature of Mars University is that it educates according to the Five Principles that are ‘the fundamental components of a strategic change agenda’ (Rademakers 2014, p. 54). The principles are quality, responsibility, mutuality, efficiency, and freedom. The commitment to quality is expressed in Mars’s statement, ‘Quality is our work,’ and quality improvement is pursued as a priority in the corporate university, too. The principle of responsibility is expressed in the company’s strategy to require direct personal responsibility from every its associate for the results of his or her work instead of diluting personal responsibility in corporate networks. Ensuring mutuality is needed to make the company’s connections (in the case of the university, the connections between learners and educators) stronger by ensuring that values and benefits are shared, as it is recognised that shared benefits last longer. Efficiency is a major consideration because, being a large corporation operating many production facilities, Mars is highly concerned about the use of resources and the generation of waste; achieving better results with the same input is thus a principle transmitted to the corporate university. Finally, concerning freedom, Mars associates its freedom with its private ownership and promotes the principles of independence; this includes the company’s approaches to learning, too. Overall, Mars expresses more than satisfaction with its corporate university: the company is proud of it. However, certain disadvantages are recognised, too (see Pros and Cons).

Another example is Deloitte University that defines itself as a centre of leadership and a destination for leaders from various spheres (Rademakers 2014). The company is one of the Big Four accounting firms providing professional services in a variety of spheres including consulting, audit, taxation, analytics, and risk and financial advisory. Working in a professional environment (as opposed, for example, to Mars that primarily sells products), Deloitte had the need for extensive training, and it was met by creating an educational facility in Texas in the late 2000s. Creating the facility was rather a risky choice of the company’s management because it was the time of a recession, and few companies were willing to engage in such large-scale spending. This decision indicates that the company was planning to remarkably benefit from Deloitte University.

Deloitte explained that establishing a corporate university is an investment in people: current and prospective employees and partners. Another need that justified the creation of the university was the need for reliable data. In addition to being a training facility, Deloitte University also functions as a research centre that collects and analyses data relevant to the company’s operation. The former CEO of Deloitte wrote, ‘For an organization to reach its ultimate potential, it must understand how its clients and its people define success, and then respond as a leader, always demonstrating its ability to create and add value’ (Rademakers 2014, p. 70). The search for the way clients define success is exactly the driving force that moved Deloitte, as well as other large corporations, to engage in corporate education to the extent of establishing a university. This is the same desire to know more about clients and improve their employees’ understanding of what clients want that encourages the Deloitte’s management to constantly revise and update the university’s curricula.

One more example of a corporate university is Hamburger University established by McDonald’s in the early 1960s in Illinois. The corporate university is a large training facility preparing a wide range of specialists, mostly for the restaurant management business. The facility is rather large, as it includes many teaching rooms and several laboratories; teaching is in 28 languages, and more than 80,000 people have graduated from Hamburger University. McDonald’s presents its corporate university as a major success, as the company has become the first restaurant corporation to create a global training centre. However, the university has been the subject of an ongoing debate on whether the university’s teaching patterns, programs, and governance compromise the essence and purpose of university education. Graham (2013, p. 2) notes that even the use of the word ‘university’ is ‘in some way whimsical’ because McDonald’s clearly does not provide education that can compete or even compared to that provided in leading universities of the world.

McDonald’s case shows the corporate university controversy: do corporate universities undermine the idea of university education? Graham (2013) further explains that not every educational institution that is called a university is similar to Harvard, i.e. the levels of education may be significantly different, but these universities have something in common with Harvard; Harvard and they do similar things. It can be argued that corporate universities do a different thing, and Hamburger University is a prominent example, as it has been criticised for presenting its corporately governed professional training as university education. However, Hamburger University continues to exist under the same name, and McDonald’s recognises many benefits of it, including talent development, improved human resources practices, and contributing to the overall development of the industry by preparing specialists.

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Pros and Cons

In the discussion about corporate universities, the advantages and disadvantages of education they provide can be assessed and compared to the traditional university education from the employee perspective. First of all, the most prominent advantage of corporate universities is that they deliver knowledge, skills, and abilities specific to a particular industry (Wheeler 2012). When entering a university, an individual is not necessarily certain what career he or she will be building. Besides, one of the functions of the traditional university education is to provide general abilities, such as critical thinking and writing skills, while narrow professional knowledge may not be covered extensively.

Corporate universities, on the other hand, normally deliver specific knowledge. Also, it is noteworthy that corporate universities are established by companies who are successful in their industries, i.e. they know what particular skills an employee should learn and how those skills should be taught (Rolfe 2013). Successful corporations bring their experience of human resources management and employee training to a new level of educating large numbers of current and prospective employees, and this is a major advantage of corporate universities. It is also noteworthy that corporate universities do not necessarily train people for the company by which they were established. As it was shown above (see Three Case Examples), Mars University offers its students skills and knowledge that will allow building various careers in management, marketing, and engineering, and Deloitte University positions itself as a centre for leadership, which means that learners enrolled at these universities can benefit in many various ways and become specialist who will make contributions not only to the development of Mars and Deloitte but to the development of entire industries.

Also, one of the remarkable advantages of corporate universities education for students is that they receive access to highly innovative learning environments (Lytovchenko 2016). Like any businesses, corporations that establish their own training facilities or educational programs pursue increasing their profit, and for this reason, they are highly motivated to develop the most effective and efficient education strategies. Moreover, they often have more resources to develop such strategies, including financial resources. In fact, traditional universities may not be able to afford innovations, such as the digitalisation of learning, to the extent to which corporate universities promote them with their investments (Rhéaume & Gardoni 2015). Corporate universities are known to spend a lot of money on research in the area of effective education (Benson-Armer, Gast & van Dam 2016), and their findings can be further used by other educational institutions, which is an advantage of corporate universities for not only their students but also all learners in many different universities.

However, corporate universities have disadvantages, too. In a study of executives, it was revealed that many of them thought that corporate universities education was not effective enough because it employed traditional educational methods (Benson-Armer, Gast & van Dam 2016). Many respondents expressed their disappointment with the fact that such traditional techniques as classroom learning were widespread in corporate universities that those respondents oversaw. What executives suggested was introducing innovative learning practices, which can be hard and costly, but according to them, it would ultimately be more efficient and beneficial. Interestingly, a little more than a half of respondents noted that corporate universities education was either ineffective or neither effective nor ineffective for the improvement of their companies, i.e. corporate universities either failed to improve the performance of the companies or had no evident correlation with it at all.

For example, a major concern of corporate universities is digitalisation. Many corporate universities’ administrators recognise that ‘digitization of learning can provide unprecedented access to relevant knowledge, a lot of it at relatively low or even no cost’ (Benson-Armer, Gast & van Dam 2016, para. 13). This exemplifies how corporate universities strive for more effective education, yet widely fail to achieve it because even large corporations that can afford to provide innovative learning environments find it challenging to create them. Besides, among the disadvantages of corporate universities education, it should be mentioned that, as it was described above, they are often accused of compromising university education by disguising training for their narrow business purposes as proper university education (Graham 2013). These accusations are based on the claim that employees who receive education from corporate universities may be misled, as they are provided with narrow knowledge restricted by the owners of the university instead of receiving traditional education according to the liberal arts principles.

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Recommending Corporate Universities as Part of Human Resources Management Strategy for Organisations

Based on the exploration of corporate universities and the examination of their pros and cons, recommendations can be proposed to companies who consider the creation of their own corporate universities for human resources management purposes. Primary evidence for such recommendations comes from the opinions of executives who oversee existing corporate universities and their effects on the performance of parent corporations. First of all, these effects are not regarded as positive by a large portion of executives, and the main reason for this is that corporate academies education does not employ innovative learning strategies and programs to a sufficient extent.

Therefore, corporations who decide to establish their own academies or training facilities should not rely on the existing pattern and methods of traditional education but should develop new, more effective patterns and methods instead. Benson-Armer, Gast, and van Dam (2016, para. 20) claim that ‘the future of corporate academies lies in blended learning, which combines classroom forums, in-field applications, personal and results-oriented feedback, and online engagement.’ By committing to blended learning, companies that establish corporate universities can contribute not only to the creation of well-trained workforce for their business but also to the improvement of standards in the entire industries in which they operate.

From the human resources management perspective, a corporate university is a large investment in people, and the main benefit of it is that it is an integrated way of training employees extensively instead of managing disconnected training programs. In corporate universities, corporations ensure that a student learns exactly what will be needed for his or her work, and learns it well (Baporikar 2015). Researchers and practitioners stress that further studies are needed on the topic, but it is clear today that the rise of corporate universities is not accidental.

Reference

Baporikar, N 2015, ‘Role of corporate universities in higher education’, International Journal of Applied Management Sciences and Engineering, vol. 2, no. 1, pp. 30-43.

Benson-Armer, R, Gast, A & van Dam, N 2016, ‘Learning at the speed of business’, McKinsey Quarterly, Web.

Graham, G 2013, ‘The university: a critical comparison of three ideal types’, in R Sugden, M Valania & JR Wilson (eds), Leadership and cooperation in academia: reflecting on the roles and responsibilities of university faculty and management, Edward Elgar, Northampton, MA, pp. 1-16.

Lytovchenko, I 2016, ‘Corporate university as a form of employee training and development in American companies’, Advanced Education, vol. 5, no. 1, pp. 35-41.

Rademakers, M 2014, Corporate universities: drivers of the learning organization, Taylor & Francis, New York, NY.

Rhéaume, L & Gardoni, M 2015, ‘The challenges facing corporate universities in dealing with open innovation’, Journal of Workplace Learning, vol. 27, no. 4, pp. 315-328.

Rolfe, G 2013, The university in dissent: scholarship in the corporate university, Routledge, New York, NY.

Wheeler, K 2012, The corporate university workbook: launching the 21st century learning organization, John Wiley & Sons, Hoboken, NJ.

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