Question

The University of Mount Olive (UMO) has a new President, and he wants to evaluate how we are doing. Should UMO continue to expand, should we contract, are we the right size? We need to make some critical decisions. As a graduate student of this institution, you are asked to turn your reasoning powers on to Mount Olive's expansion.

1. First, UMO would like to know the extent to which we should expand. In other words, what is the optimal size of UMO, and how will we know if we are overextended? If we are looking at costs and profits, several issues arise which you will need to deal with. For example, what is the appropriate "cost" to use and, consequently what is the correct view of "profit"?

2. With the expansion, you will need to look at the Law of Diminishing Marginal Returns and determine whether it applies to education, especially in an online format. How does the Law apply to students and to the hiring of new faculty?

3. Furthermore, if Mount Olive hires adjuncts, what sort of agency problems might arise? How can they be best dealt with? F

4. inally, we need to consider the long-term effects of expansion on UMO's reputation. Specifically, what is the value of Mount Olive's reputation today and in the future if there is over expansion? To whom is UMO's reputation most valuable? How can the stakeholders help insure that the reputation is upheld?

Answer 1

Reasoning with regards to expansion of UMO would be as follows:

1. To make the UMO profitable we must know the data as how much potential UMO Carries as on Today, this will help to conclude wether we are at our peak or we have lot more area pending to grow.

Like what resources we currently use to cover the existing engagement and what is the cost per engagement we spent also out of that cost what amount we can optimise in our long term expansion, cost directly effects profit that's why we first need to calculate our total cost incurred today versus total revenue we earn to optimise profit.

After knowing above data we can reach to a decision that where, what and how we exactly have to move to expant the UMO and would that expansion is better off or not.

2. If we talk about Law of Diminishing Marginal Returns it obviously applies in all format that's for online too, in online format as well we have to understand the potential and scope then only we can conlclude.

For online format we need to understand the market size, potential, scope, flexibility, adaptability and way forward to future as to what exactly we are going to offer for to the audience and why would audience will by the product and services from us, is there any other provider or competitor who is providing or we are ony the player, after knowing such data we will come to a conclusion that yes ofcouse Law of Diminishing Marginal Returns applies here as well in online format too, as blindly we can't offort to invest extra money in any format.

3. If UMO hires adjuncts, there are both the sides of that, if UMO hires adjuncts UMO will have to hire less people and that ofcourse will save the money for UMO and project would be easy in less investment, on the otherside UMO can also have demerits of it, like UMO will not fully controle their product and services or cources they offer.

4. At the end if we have to look over the reputation of the UMO then UMO must have the fully controle on every aspect of project expansion in short run and in long run, which will create more trust and develop more reputation.

UMO reputation obviously matter for everyone who is associated with UMO, be it Students, Faculty Staff or service providers, and ofcourse in the long run what actually matter is the reputation, on behalf of reputaions only a good academic institution works.