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The business economist at work: the transition from business economist to college professor.

For business economists considering changing to an academic career, the author describes the prerequisites for full time college teaching: academic credentials, teaching experience and research and writing. In spite of a shortage of teachers expected in the years ahead, the hiring process may not be too favorable for the business economist. The process of obtaining a position is described, and the positives and negatives of teaching are discussed. In spite of some difficulties, those who have made the shift are upbeat about their new vocation.

"WHAT IS IT LIKE to switch careers from business economist to college professor?" This question came up frequently in informal conversations during the NABE annual policy conference in Washington, DC, last january and at other meetings. Frequently, the question was followed by an acknowledgement that "I've had a second career in the back of my mind for some time."

For some maturing business economists, a shift to full-time teaching seems like a perfect way to have a second career and to leave one's mark on a new generation of leaders. This route was followed by two prominent business economists who qualified at age 60 for early retirement with full pensions and benefits. Former NABE President A. Gilbert Heebner retired as Executive Vice President and Chief Economist of CoreStates Financial Corp to become Distinguished Professor of Economics at Eastern College. Former NABE President George W. McKinney, jr., retired as Senior Vice President of Irving Trust Company to become Virginia Bankers Professor of Bank Management at the McIntire School of Commerce of the University of Virginia. He is now Professor Emeritus. Both former business economists had a long-term interest in teaching, and found the real joy of academic life in the classroom. As McKinney puts it, "The real satisfaction comes in the interchange with bright-eyed young people eager to succeed."

For another group of business economists, college life appears as an escape from a corporate environment that has become faster, more tension-packed and exhausting, and more worrisome as to job security than in the past. The 1980s, indeed, have been a stressful era of merger mania, downsizing of corporate giants into lean-and-mean operating structures and a protracted shakeup in financial markets. The past few years have been a difficult time for macroeconomists, with some frequently changing affiliations and others finding it harder and harder to make a go of it.

It is not surprising that college life appears to offer greater security and a more relaxed way of life. With six to twelve hours of teaching per week, a Christmas break and summers off, the hours involved may appear rather low to the casual corporate observer. Moreover, schedules might be quite flexible, and there need be no racing for the early morning train. There is also the opportunity to work with young people, to engage in intellectual exchange with peers of various disciplines, to write and research, and even consult, without pressure, and to engage in all the cultural, social, and athletic amenities of college life. Finally, the title "Professor of Economics" or, perhaps, "Professor of Finance" appears prestigious and elicits respect.

This idyllic picture has important elements of truth, but it can be a far-from-accurate portrayal of full-time academic life. A recent U.S. Department of Education survey based on Fall 1987 data shows that the average college professor is a forty-seven-year-old white male, who is tenured, earns $48,700 including outside consulting and other income, and who devotes forty-six hours a week to academic duties alone. My own experience and that of dedicated colleagues is that the workweek is closer to sixty hours. just as the business economist can bring a sense of "real world" to the students he teaches, he or she quickly learns that outsiders often have quite mistaken views about what a college career is all about.


The transition from business economist to full-time college professor is greatly facilitated and the new career more likely to be successful when there is long-term planning and preparation. The first prerequisite involves academic credentials. A Ph.D. is a virtual necessity - a required "union card" - for full-time teaching at the larger and more prestigious schools. This degree should be in the discipline you propose to teach. The accreditation process by groups like the American Assembly of Collegiate Schools of Business (AACSB) requires a largely full-time Ph.D. faculty. A Master's degree (M.S., M.B.A., etc.) may satisfy requirements at some colleges, especially two-year county or community colleges.

Teaching experience is a second prerequisite for the business economist planning a shift to academia. Perhaps even more important on a personal basis is a positive response to the question, "Are you really interested in teaching?" Former NABE President Roy F. Moor observes that, while business economists are involved in a great deal of on-the-job "teaching" activity (subordinates, CEOs, clients and general business and other audiences), "it's quite different when you meet a class every day." Moor was formerly Chief Economist at the First National Bank of Chicago and is now Distinguished Professor of Finance at the School of Business of the Illinois Institute of Technology.

Business economists can test the waters and gain teaching experience through the adjunct professor route, i.e., teaching one course per semester for a local college or university. Adjuncts usually are in great demand and generally, a Master's degree is all that is necessary. Adjunct teaching, at the very least, will stimulate your thinking, provide a sense of contributing to society and add a bit of luster to your resume.

Financial compensation certainly should be a secondary consideration in adjunct teaching. Robert J. Eggert, Editor of Blue Chip Economic Indicators and former top economist at RCA and Ford, defines an adjunct as "a person who gets a dollar a year for services and a check for ninety-six cents after Social Security." Adjunct pay sometimes covers little more than commutation and other out-of-pocket costs. The per-semester salary for a three-credit course at New Jersey's four-year state colleges currently is $1,050, although it is higher at many independent colleges and at large universities. Eggert, who has taught at several universities, feels that the real reward is the personal satisfaction gained in classroom activity and in "providing a peek at real-world activity."

A third prerequisite for full-time teaching, especially at larger, more prestigious schools, is a history of research and writing for publication. AACSB-accredited institutions generally insist on papers in refereed journals, but other colleges would like to see at least some writing of substance in general business publications. It should be noted, however, teaching is recognized as a top priority in an increasing number of schools. Even top-flight AACSB schools have been turning to some three-to-five year renewable (nontenure track) contracts where the primary responsibility is teaching.


The college faculty market has experienced ebbs and flows during the post-World War II decades, but an upswing is underway currently and a severe faculty shortage is widely anticipated for the 1990s. A study by W. Lee Hansen of the University of Wisconsin and Thomas F. Guldugle of the Chrysler Corporation published in the March/April 1990 issue of The Journal of Economic Education noted that optimism and expansion permeated higher education in the late 1950s and 1960s, and many young people viewed college teaching as a high status occupation. The situation reversed in the 1970s. The college faculty real salary level fell sharply as a public backlash developed from earlier student protest activity. There was improvement in the 1980s but, as late as 1987-88, faculty real salaries were still more than 10 percent below the 1970-71 level. In contrast, real salaries for business management were up over this long period, very substantially in the case of upper level management.

A severe faculty shortage already is upon college administrators if this is gauged by the needs of top-rated colleges for Ph.D.'s with specific areas of expertise and a history of publishing. The American Council on Education reported late in july that colleges are providing high pay and other special incentives to recruit "star professors" in much the same way professional sports teams lure star athletes. A more general shortage of qualified faculty is widely expected to be underway in the mids-1990 and there is some evidence that this already has begun. Faculty retirements are projected to increase substantially. There may be only marginal benefits, if any, from the already legislated elimination of the mandatory retirement age, now age 70, on january 1, 1984. Adding to the faculty shortage is a trend toward reduced teaching loads.

Student enrollments, at the same time, will be on the increase. Demographic data suggest a major increase later in this decade. While the tide of high school graduates currently is at a low point and college freshmen enrollment is down, this is more than offset now at four-year colleges by an upswing in readmissions. There is a growing interest in adult education in general, and many full-time workers, who earlier had interrupted their undergraduate studies, are returning to college. Perhaps it is not surprising that two recent national surveys of faculty, one by the Carnegie Foundation for the Advancement of Teaching and the other by the U.S. Department of Education, showed that faculty around the nation believe that this is a good time for a young person to being an academic career. The attitudes are far more positive than two years ago.

Business economists should be aware, however, that even with a faculty shortage, the college hiring process will not necessarily be favorable. Those who received their degrees years ago and who have been removed too long from scholarly trends may have a difficult time. Observers also note that white males will have the hardest time in a climate where recruiting more female and

minority professors is a priority. Further, full-time faculty hirings face current financial constraints due to the slow U. S. economy, with recession conditions in New England and cutbacks in higher education appropriations in New Jersey and other states.


The first decisions in any shift from business economist to college professor, according to Gil Heebener, should involve location and type of school. Are you willing to move and accept a position in perhaps a distant city? If not, target colleges in your area where your background and interests match school objectives and needs. For business economists, this almost always means graduate and/or undergraduate schools of business within a college or university. Heebner selected from competing offers in the Philadelphia area. George McKinney, on the other hand, returned to his alma mater and familiar stomping grounds in the Charlottesville, Virginia area. My own personal decision on early retirement as Vice President, Economic Research from The Prudential Insurance Company of America was to teach locally in northern New Jersey and minimize commuting. This followed thirty-five years of daily travel and travail to Newark, New Jersey and Manhattan. My personal research on local colleges led me to Ramapo College of New Jersey, a four-year state college of 4,400 students - half of them in the School of Administration and Business. The College has gained a national reputation as a top "little Public Ivy League" school, with curriculum and out-of-class activities infused with international and multicultural perspectives. Other considerations included an excellent forward-looking administration, a warm collegiality, a good mix of students, including many older returning students - and, not to be neglected, a beautiful campus with grazing horses and a beckoning trout stream immediately next door.

Small schools, of course, provide the advantage of informality and being close to everyone - students, faculty and administration. But larger universities have some plusses also. They provide more structure and division of labor, so that the new faculty member can teach the course he or she chooses. There are likely to be more support services and, certainly, prestige and recognition comes with larger institutions.

The entry barriers to business economists seeking full-time teaching positions in the larger, more prestigious schools are not fully appreciated by NABE members, according to Roy Moor. Faculty search committees generally determine appointments, weeding out many applicants and passing on their choices for final decision by Administration and Board of Trustees. There is little respect for publications other than papers in refereed journals. At some schools there may be even an antipathy to business economists and a strong bias favoring Ph.D.'s who have "served their time" in graduate studies and publishing. Dean Daniel E. Diamond of The Undergraduate College, Leonard N. Stern School of Business, New York University, observes that faculty committees tend to hire people like themselves. Only a very few nationally recognized corporate leaders are likely to be hired directly from the business world for full-time faculty positions at large, prestigious schools like Stern.

The actual process of securing a full-time faculty teaching contract usually involves several approaches. One way might be the adjunct route. Over a period of time you make faculty friends, build a record of teaching achievement including good student evaluations, and become well-known to the Administration. Related approaches might include service on business advisory committees for a college and occasional speeches before academic audiences. A second approach, as in business employment, is networking. After a time, if you have the particular background in need, offers from various schools will start coming. A third approach is to respond to advertisements in newspapers and journals. One major publication that should not be overlooked is The Chronicle of Higher Education, which is directed towards college administrators and carries very complete listings of faculty openings around the country.


Your discussions with faculty search committees and Administration during the hiring process should include at least four general areas:

1. Academic level and salary. Hiring at the full professor level applies only in exceptional cases. Much more likely is an Associate Professor contract, which provides prestige as a senior faculty member. Some schools hire business economists only at the Assistant Professor level at, perhaps, an advanced salary step. In this latter case, in particular, cheek very carefully the school's promotion policy and what has been the actual promotion history. You should be aware that promotions and salary increases (except general increases) may be extremely infrequent and do not come automatically with merit. Some public college business schools have gone for years without promotions and, in some cases, there may be a bias against outsiders," such as former business economists. The real negotiation on academic level and salary and other matters, to the extent this is possible, should be at the initial hiring.

2. Teaching Load. This is a very important bargaining matter, because new faculty may not subsequently be awarded release time for research or other activities by the Administration or existing faculty committees. Typical loads run from three to six hours (one or two courses per semester) in research-oriented institutions to as many as twelve hours (four courses per semester) in colleges that emphasize teaching. Class size and teaching assistant support also can vary greatly. Other questions include possible summer teaching and supervision of cooperative education, independent studies and honors students. Various special arrangements might include, for example, a reduced teaching schedule combined with Administration functions or, say, a half-time graduate school contract with salary prorated at the regular Associate Professor rate.

3 . Area of Concentration and Courses. "Bill yourself as a finance professor. There may be 50 percent greater compensation and/or demand for faculty in specialized areas such as finance compared with economics." This advice comes from NABE President james F. Smith, who shifted careers from Chief Economist at Union Carbide Corporation (and, previously Sears Roebuck) to Professor of Finance at the Graduate School of Business Administration at the University of North Carolina. I followed the finance track myself and found full-time teaching offers much more forthcoming than for an economics professor. At one prospective school there was a careful adding up of my Ph.D. credits in finance versus economics. Bob Eggert earlier in his career taught Market Research at Michigan State. Almost all business economists work directly with finance, marketing and planning executives and staffs, and we are capable of teaching more than one discipline.

4. Other Considerations. Candidates for college professor contracts should try to determine in advance the school's attitude towards research and publishing and to define exactly what is expected in "service to school and community." One alternative approach, of course, is to negotiate a renewable nontenure track appointment involving only teaching. Finally, other important incidentals to consider during the hiring process include office space, secretarial services, and union status of the school. Affirmative action policies with respect to future promotion and tenure will be a very important consideration for minority candidates.


The business economist turned college professor will enter an academic environment undergoing fundamental change. The three dimensions of the college professor's job teaching, research/publishing, and service to school and community involve both positives and negatives. Some aspects are summarized below.

Teaching. University and college schools of business around the country have been responding to urgent proposals by prestigious national oversight groups and study commissions for greater blending of liberal arts studies with professional business training. The business sector has assumed an active role through financial support and executive participation in institutions like the Woodrow Wilson National Fellowship Foundation, which promotes the importance of a broad liberal arts education, written and oral communications skills, business ethics and global interdependence. Senior business executives spend a week on a campus meeting with classes, student clubs, faculty and administration and even trustees. Woodrow Wilson Fellow Eugene O'Hara, Senior Vice President and Comptroller of the Prudential Insurance Company of America, was impressed with his students' great interest in actual business applications of their broad college training. His informal polls indicated that 90 percent of students in a daytime class felt that business operations generally were unethical, while only 10 percent of an evening class (mostly full-time employees) felt this way. Business economists bring to their undergraduate classes a familiarity with the importance of these broad interrelationships.

Today's collegiate environment includes a major and growing emphasis on international business and also technological progress, including computers and spreadsheet analysis. The preoccupation over the past three decades with rigorous quantitative analysis and mathematical model building, according to Dean Diamond of New York University, appears to be giving way to greater emphasis on management competence," including negotiations, counseling and being able to work with people of many cultures.

College graduates, years later, remember with a bit of awe the professors who taught them to think logically and creatively, critically analyze a situation and communicate findings in an effective manner. This involves techniques such as open discussion, group activity and problem solving, along with old-time lecturing, and also an emphasis on written reports and essay-type exam questions rather than a multiple-choice format. These approaches are even more important in today's classrooms with their larger proportion of older students, who are more sophisticated and ready to question the teacher. All this, of course, means much more time in preparation and grading. George McKinney observes that "the former business economist who spent considerable time preparing Board of Directors' briefings feels embarrassed if he has not prepared adequately for his class - and the class is aware of this, too."

While "teaching" activities in the business firm may be helpful, actual day-after-day performance in the college classroom depends, fundamentally, on trial-and-error, buttressed by helpful advice from faculty colleagues. Occasional peer evaluations and end-of-semester written evaluations contribute to improvement over time. The newcomer would be well-advised to take advantage of any teaching workshops provided by the college and to subscribe to a "how-to" publication, such as The Teaching Professor, published by Magna Publications of Madison, Wisconsin.

Other College Activities. Business economists usually have mixed feelings about the two other extremely time-consuming dimensions of the career: research/publishing and service to college and community. The college professor is expected to keep abreast of the latest developments in his area of concentration, and research activity may complement and add to the effectiveness of classroom teaching. On the other hand, "publish or perish" policies can create serious morale problems and work against effective teaching. There continues to be an underlying, sometimes unstated focus on publishing, even in smaller schools stressing teaching and with heavy teaching loads. Emphasis on research that appears to have little long-term value appears "uneconomic" and inconsistent with long-held priorities of most business economists. The Carnegie Foundation for the Advancement of Teaching is working on a report that calls on campuses to define scholarly activity" more broadly than the traditional publishing and to reward it accordingly.

Service to school and community is a rather broad and sometimes ill-defined area and there may be conflicting views within the campus community on its value for promotion and tenure. College faculty, unlike their counterparts in primary and secondary education, are responsible to a substantial degree for the governance of their institutions. Numerous permanent and ad hoc committees involved with a wide range of activities compete for faculty time. Some activity involves very important decision-making and top level outside contacts and, perhaps, even travel abroad, and should appeal to former business economists. But many service activities involve rather mundane matters and a great commitment of time, and provide little personal satisfaction or recognition. NABE faculty members I contacted singled out student advisement as one negative of their jobs. Informal meetings with students and advisement on graduate study and career and even personal matters is a welcome part of every college professor's responsibilities. But advisement as to specific courses and procedures and signing the required forms for registration and graduation, in the face of frequent changes in regulations, can be frustrating as well as time consuming. Providing volunteer" clerical services during busy registration periods is another unattractive part of the job.

Additional negatives of college teaching should be considered. Some former business economists miss the "Fed watching" and closeness to current economic and market activity. They may encounter frustrations in areas formerly taken for granted, e.g., timely secretarial assistance and adequate compensation for travel and off-campus seminars. They find themselves engulfed in a tide of paperwork, including detailed analyses of why they should be reappointed, promoted, granted tenure or even receive a merit award - all backed by voluminous support materials and recommendations. At some schools there may be faculty-administration frictions and/or an unpleasant degree of campus "politics."


Prospective college professors certainly should be aware of the negatives associated with the shift to the new career, but the evidence from business economists who have made the change and from broad national surveys of faculty show that they are very upbeat about their profession. Past NABE President Francis H. Schott, Senior Vice President and Chief Economist of Equitable Financial Companies, has long experience in business and government (Federal Reserve Board of New York) and close ties to academia, and he offers this advice: "Job satisfaction is the key. If your main interest is directly influencing day-to-day business decisions that may involve many billions of dollars a year, remain in the corporate world. If you are interested in influencing public policy decisions, and the power motivation has some appeal, stay in government and do not shift to the college campus." (This could be the subject of a future Business Economics paper.) "But if you are interested in influencing young minds and exploring and explaining difficult concepts, college life is for you."

Even if the college professor career is only a dream for the future, start preparing right now. Sign up for some adjunct teaching for experience and to determine if academic life appeals to you. Start (or complete) your Ph. D. program. As you progress in these areas, add some quasi-academic writing. Good luck, Professor!
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Author:Essig, James L.
Publication:Business Economics
Date:Oct 1, 1990
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