As a result, the majority of recruiters mislead incoming students with false promises that results in unsatisfied customers. Recent DOE review conducted in the summer of 2003 have found that UOP's is not compliant with the Higher Education Act, which makes it illegal for educational institutions like UOP to pay enrollment counselors compensation based solely upon obtaining enrollments. The DOE reports states that the UOP compensation system has cultivates and maintains a corporate culture of defiance of fiduciary duties.
Significant changes to this enrollment strategy must be achieved in order to gain public trust and reorient UOP's current practices. The first step is to change the educational and academic culture at UOP. The majority of UOP's programs, both online and offline has been criticized as severely lacking in both professionalism and academic value. Approximately 95% of UOP faculty is part time, as compared with 47% across all universities. As a result, the majority of the faculty does not have requisite experience or the time to fully engage students in their work. UOP argues that their staff is qualified based upon their requirement that all of their part time faculty must hold a job within their respective field while teaching UOP classes. However, many controversies have come to light to show that underwhelming educational experience at UOP. The Intel Corporation, which had previously sent hundreds of employees through the UOP program, has excluded them as well as 100 other colleges from their tuition reimbursement program because it lacked "top notch accreditation." UOP's curriculum does not meet the rigorous standards that top tier competitors demand from their employees. As a result, their enrollment numbers have not consistently increased because of the lack of quality within their programs. Even worse, their drop out rates and general retention has decreased over the past three years by 11%. All of these changes point to the fact that rigorous academic standards are not being met internally and the direct result is a lower level of academic interest in both enrolling or staying within UOP programs.
In general, the retention and graduation rate for UOP is been abysmal over the past decade. When calculated according to DOE metrics, UOP's overall graduation rate is 16%, one of the lowest on a national level. Campuses in Southern California have as low of a graduation rate as 6%, with its online program graduating only 4% of its total enrollment undergraduates. UOP public relations reports that their actual graduation rate is 59% because of the large population of non-traditional students who enter the university with 24 or more prior college credits. However, either figure represents tremendous problems within their current system.
The above analysis shows a clear trend of unethical and inefficient operational standards for enrollment and academics. It is clear that on an internal level, the environment for enrolling students as well as maintaining its academic standards is low. As a result, academic programs with higher credibility have gained in enrollment and general student support. In order for the University of Phoenix to reposition itself, it must make a strategic change within its enrollment policy and strengthen its core standard of educational enrichment.
The external environment for UOP has grown increasingly hostile over the past decade from both a regulatory and competitive standpoint. While in the 80s and 90s, UOP and the profit educational sector was largely unregulated this has changed significantly since the passage of the Higher Education Act. UOP on a national level is receiving a significant amount of federal scrutiny for its unethical and in many cases, questionably legal fiscal policies. UOP receives more federal student financial aid than any other university within the United States. In 2004 to 2005, it received 1.8 billion dollars in federal student aid. Current investigations have revealed that UOP has wrongfully filed false claims for hundreds of millions of dollars in financial aid. As a result of this law suit and other law suits it has changed the future prospects of UOP. The Department of Education has already settled 9.8 million dollars in claims against UOP for its violation of the Higher Education Act provision that specifically apply to the distributing financial incentives to admission representatives. UOP also has been fined by the U.S. department of labor for its treatment of recruiters in addition to other pending false claims suits against the University for violating Equal Employment Opportunities Commission policies for religious discrimination.
In addition to their current legal and federal level problems, UOP also faces competition from two direct sources, direct for profit educational institutions, and four-year universities which currently are expanding their online accreditation programs. Strayer University is one of UOP's chief competitors in terms of its direct for profit competition. Strayer University was started in the Washington D.C. area as a private for profit educational institution. While much smaller than UOP, it currently has 31,000 students on 47 campuses across the Untied States. Overall Strayer University has increased their enrollment by 16% over the past year, and its online enrollment has increased by 80% since the last year. In the fall of 2001, total enrollment at Strayer University jumped by 14,009 students, as compared with its 12,096 students in 2000. Strayer Online has become extremely popular because of the easy to use user interface and strong academic accreditation. Strayer's focus on education and general academic quality has made it an alternative for those who do not believe in the strength of UOP's program. It has increased its current scope and should potentially challenge UOP for their overall market share within the next few years.
Even more alarming for UOP's future is the expansion of current ground level four-year university programs that are expanding their services online. Traditional public and private schools such as George Mason University and Northern Virginia Community college have new online programs and increased their advertising budget on these initiatives. George Mason for instance is now offering an online MBA and taxation program, they have partnered with major employers to help their employees get advanced degrees. The credibility of these major universities have allowed them to gain a much greater foothold within the adult education arena by taking away reeducation dollars from UOP for major U.S. corporations. Already George Mason has signed Boeing, Hilton Hotels, SBC Communications, Down Corning and PricewaterhouseCoopers to be part of their online accreditation program. Similarly, the Northern Virginia Community College has also taken a step to increasing their online student participation and enrollment by partnering and expanding their course offerings to meet with local area businesses. They have partnered with North Virginian employers on training and workforce development issues to help younger workers attain online college educations. The strengths of these programs will seriously challenge UOP on a regional level. These two universities are only examples of the many traditional four-year universities which are taken the leap to expanding their online programs. Since on a regional level, these colleges will have a much more developed program than UOP as well as greater name recognition, UOP could meet with severe reduction within their market share in the coming years.
Both the internal and external environment analysis shows that UOP must change their foundational strategy in order to meet the challenges of enrollment in the next generation. It is evident from this analysis that UOP has severe ethical and academic considerations to evolve and also change the context of their reputation on a national level. The following will detail long-term goals for UOP to pursue.
The long-term goal of the University of Phoenix system is to be a very competitive and comprehensive adult education institute that maintains its market share as the leading provider of adult education. Its hope is to maintain both strong regional and national level recognition for its various degree and accreditation problems.
In order to accomplish this goal, UOP must adopt a long-term objective of changing its recruitment process to fit within the framework of proper governance and still strong ethics and discipline for the recruitment management.
Additionally, UOP must institute strong academic regulations and standards that will meet with national level accreditation standards in order to maintain its current academic advantage as well as continue their relationship with the department of education.
Strategic Analysis and Choice
Plan Goals and Implementation
In order to accomplish their long-term goal of becoming a first class educational experience for students and continue its perch as the leader in adult education, UOP must meet several objectives listed below.
Objective one: Reinvent and restructure the enrollment and recruitment process for UOP recruiters and prospective students.
Strategy 1: Analyze current recruitment environment to understand the deficiencies within both work culture and general work practice
Strategy 2: Recreate recruitment process to base majority of compensation upon the achievement of modulated goals rather than individual enrollment metrics.
Strategy 3: Restructure financial incentives to take away "sales" atmosphere within recruitment and to reorient recruiters upon fulfilling the academic needs of incoming students rather than their own enrollment targets.…