Financial Distress Paper Essay

The current global economic crisis has seriously affected the financial activities of my academic institution. One of the major donors for our business school, a bank, has pulled out and is currently facing charges of breaking federal banking regulatory laws. All indications are that the bank will go under and will have to file for protection under chapter 11. With this conduit of funds no longer there, the business school will have to restructure. There are five programs currently in place at the business school, three of which are involved in teaching and research. They have been in existence for the last thirty years. As the head of faculty for the business school, I will recommend to the long range planning committee that the restructuring be directed at the other two programs. These are recently introduced graduate management courses, whose students, totaling fifty in number, can be gradually absorbed within the other graduate business courses. The cuts will therefore have to be effected within the faculty staff of the two programs being phased out. All tenured and non-tenured faculty staff will receive a one year termination notice with full severance benefits. Since their total combined yearly compensations is about as much as lost donor funding, the scaled down business school will be able to survive until other avenues are found to fund new programs. These recommendations will be made based on the need to retain teaching and research as a priority. Students who are currently enrolled in all programs will not suffer as they will be retained to continue learning within the existing programs. Additionally, the retrenchment will not be abrupt, but will be implemented over the course of one year, giving affected faculty staff ample time to appeal or seek positions elsewhere. Distress Paper 2 References Senate of Michigan Technological University (1985, May). UNIVERSITY RETRENCHMENT POLICY. Retrieved August 1, 2009 from http://www. sas. it. mtu. edu/usenate/propose/80-89/7-85. htm