WHU – Otto Beisheim School of Management: From Niche Position to International Recognition, 1984 - 2019

By Klaus Brockhoff

How can a personal desire to leave a lasting mark and criticism of the German university system lead to the establishment of an internationally renowned institution of higher education? Klaus Brockhoff provides the answer to this question by accurately tracing the detailed 35-year history of WHU – Otto Beisheim School of Management – and highlighting all of its highs and lows in the process. Despite the challenges associated with founding and operating an institution of higher education, it was always and will continue to be the remarkable spirit of the donor, university administration members, employees as well as students, alumni and sponsors that make a decisive contribution to the overall success of WHU. At the same time, the history of WHU may also serve as an example for other universities wanting to position themselves successfully amid international competition that is becoming increasingly dynamic. Ever since the establishment of WHU, Professor Dr. Dr. h. c. Klaus Brockhoff has been monitoring the institution's evolution, served as its dean for five years and then went on to be part of the foundation's Executive Board for 13 years. His presentation relies on a comprehensive document analysis in addition to personal conversations with numerous contemporary witnesses and members of WHU. The Beisheim foundations in Switzerland and Germany remain committed to promoting the philanthropic legacy of Otto Beisheim, one of the co-founders of Metro. At the same time, both foundations are the primary sponsors of WHU, which has borne the name of the entrepreneur – Otto Beisheim School of Management – ever since he demonstrated such impressive personal commitment in 1993. The Beisheim foundations are the editors of this publication, which will also be published in German.

• Language: English
• Publisher: tredition
• Release date: Feb 10, 2021
• ISBN: 9783347042544

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History in brief

1.1 From 1983 to 1993

On October 1, 1984, on the initiative of the Chamber of Commerce and Industry (IHK) in Koblenz, a controversial private higher education institution opened its doors to students: WHU – Wissenschaftliche Hochschule für Unternehmensführung.¹ The origins and early history of this unusual business school have already been covered in detail, thus this book will go beyond that.² In Germany, establishing a private university was – and still is – a risky venture. Commenting on the Chamber of Commerce and Industry’s plans before the Association of German Chambers of Commerce and Industry, one speaker summarized, Over the last 15 years, 10 attempts to establish private universities have failed; five of those were intended to be ‘elite’ universities.³ What is WHU’s story? That is what we’ll describe here.

In September 2018, WHU had 1,560 students in eight degree programs. In fiscal 2017/2018, the business school had 1,292 participants in continuing education programs for companies and short-term programs for students from partner institutions abroad (Chapter 9, Appendix 9.8). Teaching was provided by 52 professors and 97 external lecturers. WHU had partnerships with 204 universities worldwide. WHU alumni remained extremely loyal to the business school, with the alumni association comprising 4,200 members. How was all this possible?

Starting situation

No intimate knowledge of the German higher education landscape was needed to see its obvious and serious deficits, especially when it came to the teaching of business management. Fortunately, at the Chamber of Commerce and Industry a keen interest in educational matters coincided with the will to effect change. It was obvious that this wish could not be fulfilled by exerting influence on the public universities, the majority of which are funded by Germany’s federal states. Moreover, the deficits were simply too grave, especially from the point of view of practice. Five inadequacies were particularly obvious:

• Operations research did not always allow business management theory to be expanded and modified in a resilient manner. The sense that the available teaching programs and research were becoming increasingly detached from practice was substantiated by advances in mathematical, decision-oriented business management and what were perceived as the complicated requirements of robust empirical research. It was no longer possible at public universities to enforce the formerly widespread demand that students furnish proof of practical professional experience (in particular a completed apprenticeship).

• The closely meshed network of companies engaged in foreign trade considered it odd that only a small number of students had gained any experience abroad, whether by studying or completing internships there. Likewise, only a small minority of the university teaching staff had worked or studied abroad. Some considered these experiences to be of little use as long as parts of the business management curriculum remained oriented to national conditions – which was the case for a very long time in the fields of human resources and accounting.

• In addition to these deficits, business management had become an extremely popular field of study, pushing up the number of applicants for courses. The problem was not remedied until the courts compelled the universities to accept unreasonably high minimum intake limits leading to overloads in student-teacher ratios, and planned-economy methods such as the centralized distribution of applicants between different universities had been introduced.⁴ Although university graduates received excellent training in methodological terms, they had personality deficits that undermined their suitability to lead companies, and educational methods modeled on mass production left virtually no scope for shaping students’ personalities.

• A further factor was the growing impression that societal trends were leading to a decline in students’ levels of motivation. In contrast to the past, reliable grading and rules for awarding diplomas were no longer indicators of motivation. Many considered the standard time needed to complete a degree program to be nothing more than a polite suggestion and a variety of excuses was offered for taking longer: inadequate degree program organization and conditions, for instance, or the need to hold a job in order to finance a certain lifestyle.

• Finally, some segments of the population were seen to fear or reject new technology, including the introduction of ever-more powerful electronic computers in the corporate and public sectors, and this spread to universities as well.

Against this backdrop, the idea of establishing a private business school free of such deficits must have seemed both plausible and attractive. According to some critics, such private institutions should be a thorn in the flesh of public universities. And since the chorus of those complaining about the deficits was large, it didn’t seem terribly difficult to find supporters for their rectification. Even so, any private course of study would naturally have to meet formal requirements for recognition by the state in order to give its graduates the same professional opportunities as those from public universities.

In Germany of 1980, many people found the idea of a private business school revolutionary. But it wasn’t; the country had had private commercial colleges since 1898. The pioneers of this trend were private commercial academies, but economic and political factors – World War I and periods of (hyper-)inflation thereafter – had shortened their lives. However, in the 1980s the European Business School (EBS), for instance, had been founded as a university of applied sciences in 1981, and an anthroposophical university had been established in Witten-Herdecke in 1983. Church-sponsored universities, too, have a long tradition in Germany. Elsewhere, especially in the United States, there were some excellent private universities with renowned business schools.

Groundwork

Thus it was a happy coincidence that Udo Glittenberg, who had stepped down from the management of EBS, fell into conversation with Karl Darscheid, CEO of the Chamber of Commerce and Industry. Their discussions resulted in the idea of founding a private business school with university-level standing.⁵ Hanno Ludwig, president of the Chamber of Commerce and Industry, found their first rough plan compelling (see Figure 1). After it gained more concrete form, the Chamber of Commerce and Industry’s presidential committee and annual members’ meeting were drawn into the project.

In 1983, an initial idea was put forward for a Diplom degree program limited to eight semesters, including two semesters studying abroad, foreign-language training, and mandatory internships in Germany and abroad.⁶ In response to four of the five deficits of public universities mentioned above, the following fundamentals and guiding principles were viewed as desiderata for WHU:

• "Performance orientation thanks to small groups for both teaching and research; mandatory attendance at courses; ongoing performance evaluations; and a time limit for degree completion of eight semesters.

• Practice-oriented approach to teaching, research and study through the involvement of leading professors and business practitioners; several months of project work by students in partner companies (with the supervision of the business school); practice-oriented case studies; and close contact with the problems that companies face. Students are expected to have completed a commercial apprenticeship.

• International atmosphere thanks to mandatory semesters studying (in the respective languages) at partner universities in the UK, France and later also in the United States as well as mandatory internships abroad.

• Personality development of students and graduates by all those at WHU with a view to enabling students to achieve their full career potential. The goal is to create an academic community for teaching, research and life."⁷

Figure 1 Three protagonists of WHU.

Photos: Reuther; H. Gauls; H. Gauls

As outlined by the authors (Darscheid, Glittenberg and Frank Pelzer), these fundamentals were very general, in part quite ambitious, and formulated on the basis of practical experience. They also included the requirement that all applicants submit to an admissions process designed by an appropriately qualified institute to determine the applicants’ interests and capabilities. Among other things, this process was intended to keep dropout rates low.

On July 8, 1983, the Chamber of Commerce and Industry and, in view of his many years of pioneering work for the idea of a private university in Germany, Professor Dr. Udo Glittenberg, submitted an application to the corresponding ministry of education for official recognition of the new business school. Several rounds of talks followed. The ministry of education informed the state chancellery of its support for the project and recommended its implementation in order to ensure plurality and competition in higher education.⁸ The ministry expressed similar opinions to the Chamber of Commerce and Industry.⁹ At almost the same time, the Stifterverband Private Universität Koblenz – Wissenschaftliche Hochschule für Unternehmensführung e.V. (association of sponsors for the private university of Koblenz – school of business management) was entered in the register of associations, with statutes dated December 19, 1983.¹⁰ Darscheid and Ludwig were named as board members. This created three problems: The Stifterverband für die Deutsche Wissenschaft (an association of sponsors for German science) criticized the similarity between the two associations’ German names, while the ministry criticized the use of the term university and also demanded that the association name a funding body. Precautions had already been taken for the latter in Article 2 (II) of the statutes mentioned above, which provided for the establishment of a public foundation (but definitely not a public-law foundation). Following the presentation by State Minister of Education Georg Gölter at the cabinet meeting of January 10, 1984, the state government stipulated that the planned tuition fees were not to function as a means of selecting students on the basis of income (a practice known as segregation or separation) and underscored that the state government would make no commitment to fund the school.¹¹ The proposed Wissenschaftliche Hochschule für Unternehmensführung foundation, the body intended to fund the business school, was approved on March 21, 1984, in Koblenz by the then president of Rhineland-Palatinate’s regional government (Chapter 3).

Before the business school could be established, many details remained to be dealt with and three main requirements needed to be met – a detailed concept had to be developed, the state government of Rhineland-Palatinate needed to be convinced of the project, and the creation of a financial basis was necessary with the involvement of as many Chamber of Commerce and Industry members as possible.

Even though the educational deficits outlined earlier were obvious, that didn’t mean the protagonists had a concept at hand for a university of business management – as the institution was referred to by insiders at the time. It was a clever decision to place the development of the concept in the hands of a group of experts led by Horst Albach, a business administration professor from the University of Bonn,¹² with 11 other people as members.¹³ The group’s concept was presented to the new university’s founding senate, which was appointed on January 31, 1984.¹⁴ The senate comprised not only Albach, but also the professors Gerhard Fels, Eduard Gaugler, Peter Mertens, Klaus Rose and Horst Wildemann – essentially all of the economists in the group of experts.¹⁵ Moreover, initial drafts of the degree program regulations and Diplom examination regulations had to be drawn up; these were analyzed in detail by the ministry, which added its own suggestions for changes, and were returned to WHU for discussion.

Figure 2 State government members who supported the project: Minister President Bernhard Vogel (photographed here in 2009) and State Minister of Education Georg Gölter.

Photos: from Gölter’s private collection, 2013, G. Juraschek

After the WHU Foundation¹⁶ had submitted an extensive application, state recognition was granted on certain conditions just in time for the beginning of the university’s activities on August 20, 1984.¹⁷ Recognition was preceded by intensive talks with the responsible ministry as well as with Minister Gölter, various state secretaries and leading officials. The state cabinet also consulted and voted on the proposal.¹⁸ Minister President Bernhard Vogel had to be persuaded as well. Criticism of, and even hostility to, the idea of a private business school came, in particular, from the SPD (Social Democratic Party) in state parliament, from trade unions and from student councils of neighboring public universities. Coverage of the project in the press was lively and controversial and stretched all the way to the argument that the proposed promotion of the elite could turn out to be unconstitutional.¹⁹ In response to questions raised by the opposition, the proposal to establish WHU was discussed by the Rhineland-Palatinate state parliament on March 30, 1984,²⁰ and again on May 24, 1984, after an essentially positive draft resolution on the project from the committee for education policy.²¹ However, even after the project phase was over the business school continued to meet with considerable political resistance.

By August, most of the conditions for state recognition had been fulfilled: the establishment of a foundation as the school’s funding body; organization of an objective admissions test for students;²² agreement to provide full and partial scholarships to 20% of the students and a cap on tuition fees (DM 5,000²³ per semester was considered to be too high although EBS charged annual tuition fees of DM 7,500 and received a state grant of DM 6,000 p.a.²⁴); and the submission of partnership agreements with foreign universities for the planned study abroad program. The ultimately negotiated versions of the study regulations and Diplom examination regulations were also made available; in this respect, the ministry had been concerned that students would lack free time for independent work.²⁵ Expectations of personnel and material expansion over a four-year period were formulated, indicating expected future growth. Two particular problems remained unresolved until August 16, 1984: the submission of the future business school’s charter as drafted by the foundation and proof of financing (in part through guarantees) for a four-year course of study.

It was not just in this phase that the financing issue proved more difficult to resolve than originally anticipated. A business plan from 1984 shows in that year’s prices what requirements would need to be met during the following five years.²⁶ Excerpts are shown in Table 1. Tuition fees were set at DM 10,000 p.a. and it was assumed that 20% of the places would be awarded free of tuition. Despite optimistic estimates for the number of first-year students, a substantial gap between funding and total expenses opened up as of 1986/1987 that was attributable largely to the increase in personnel numbers evident in Table 1. The plan provided for two professors to start with, but that number was to rise to five after just three years. If the funding gap was to be closed solely with income earned on the foundation’s capital, almost DM 15 million in capital would be required (assuming a return of 8%). Given the same return, this capital stock would have had to be twice as high after four years. In this situation, the state government feared being called upon to fill the funding gap and took the precaution of ruling out any financial contribution on its part, even though it would have been legally possible. The government’s fear was also fed by diverse and seemingly contradictory information provided to the government about the foundation capital raised and the grants received. Any financing commitment or guarantee on the part of the state government would presumably also have led to major problems in parliament. As a result, in their letter to the state government of August 16, 1984, those pushing for establishment of the business school stated that they would raise the foundation capital of DM 21 million themselves and would not claim any state subsidies from Rhineland-Palatinate, either then or in the future.²⁷ Unfortunately, they didn’t succeed in their fundraising. Compared with the school’s financing requirements, they didn’t even manage to obtain any corporate donations that could be considered major – and since the Chamber of Commerce and Industry members were mainly SMEs, this was hardly surprising. The founders received much encouragement from some large German companies, including a very substantial financial commitment of DM 350,000 annually over a period of ten years from Ms. Gertrud Reemtsma.²⁸ Ultimately, at its request, the state government was provided with proof of a package of guarantees totaling DM 12 million. It included not only Ms. Reemtsma’s donation, but funding from Sparkasse Koblenz (a local savings bank), BHF-Bank Frankfurt, and the Chamber of Commerce and Industry.²⁹

Table 1 Economic plan 1984–1989 (excerpt; value declarations in DM).

Source: Wissenschaftliche Hochschule für Unternehmensführung Koblenz …, VI/1984, op. cit.

While it was in the process of being set up, WHU was allowed to rent premises from the city of Koblenz in an unused grade school building in the Karthause suburb, where the students had to sit on pint-sized chairs and big lectures had to be held in the gym. In addition to copied manuscripts, the only didactic aids the lecturers had at their disposal were blackboard and chalk (Horst Albach, Figure 3). Probably over-skeptical of the project, the city government wasn’t prepared to contribute more. One political decision-maker was quoted as saying: Die Leit gehiere nit zu ons. (Those people don’t belong here.)

Figure 3 Classroom teaching during WHU’s first year.

Photo: G. Juraschek

A flying start

As Darscheid noted in his speech to mark the opening of WHU: The new Koblenz business school is ready. Finally. The path to this moment was long and arduous, fraught with inadequacies, and characterized by improvisation, mistakes and failures. But it has been worth it.³⁰ It wasn’t just the preparation phase that warranted this description; vision and reality continued to diverge noticeably.

The student numbers assumed in the business plan (Table 1) were not achieved. At the start of the first semester, only 48 students enrolled, not the estimated 60. In each of the next two years as well, enrollments totaled only 42 and 45 respectively, instead of the planned 100. What is more, in the first cohort in particular many students left after their intermediate exams; only 35 went on to submit a Diplom thesis.³¹ Indeed, it would take more than 15 years to get the annual intake up to 100 and more, and this naturally had an impact on income from tuition fees.

Initially, teaching operations could not have been maintained without the support of external lecturers – in fact, they made up the majority of the teaching staff. When WHU opened its doors, only the chair of marketing had been filled by Sönke Albers (Figure 4). The corresponding contract with him was signed on September 8, 1984, in the village where he was vacationing. Only thus was it possible to meet the state government’s condition that the school begin operating on October 1 with at least one professor in office. Since Albers rejected the term Dozent (lecturer) as his job title, the designation Professor im Privatdienst (private-sector professor) was coined and is still in use today. Albers left WHU in the spring of 1986.³²

Figure 4 Dean Sönke Albers (1984).

Photo: WHU

The plan to fill the second chair – which had a focus on industrial business management – initially failed. In May 1985, Wolfgang König was appointed as the chair of Business Information Science and Information Management, remaining at WHU until 1990. His research projects drew attention to the need to expand the four functions anchored in the founding philosophy to include a technology orientation, so that insights on the latest technological developments and innovations could be taught as the basis or driver of business progress.³³ This proposal found support in a speech with the title Managing new technology – how much basic training does a manager need, which Heiner Müller-Merbach made on October 1, 1986.³⁴ Jürgen Weber taught internal accounting and controlling from March 1, 1986 onward, initially as a lecturer. After completing his habilitation (postdoctoral university degree with a lecture qualification), he was appointed professor in August of the same year. This was the same procedure used for König’s recruitment and it became a model for later professorial appointments. To this day, Weber has remained loyal to WHU despite various offers from other universities. After Albers left, his position was filled almost immediately by Hans Bauer, who remained at WHU until 1993, when he was succeeded by Christian Homburg. Wilhelm Pfähler, the first professor of Macroeconomics, taught at WHU from December 1, 1986, till March 31, 1992.³⁵ The recruitment of bank manager Adolf-Friedrich Jacob was a novelty: In an expert opinion presented to the senate, Albach affirmed that Jacob’s publications constituted the equivalent of a post-doctoral degree.³⁶ Table 2 provides an overview of the professorial appointments during the time period covered here.

Table 2 Faculty appointments 1984–1993.

The idea that it would be easy to appoint faculty – even if there were many candidates – had to be revised. If we leave aside the fact that Albach succeeded in obtaining temporary leave of absence from the University of Bonn as of 1987, the remaining professors did not have any significant reputations when recruited for their positions. Attempts to remedy this deficit took two forms. When the school was established, the founders had succeeded in winning over Nobel laureate Friedrich A. von Hayek (Figure 5) as honorary dean. Hayek saw some of his own ideas – a privately funded institution, competition in the field of education – achieved in the establishment of the new business school. The extended order of human collaboration [our translation] was the topic of a speech he made on November 16, 1984, at an event organized jointly by the fledgling WHU and the Chamber of Commerce and Industry. In parallel, attempts were made to win over experienced lecturers from Germany and abroad as visiting professors, as funds from faculty grants were available (Table 2).

Figure 5 Nobel laureate Friedrich A. von Hayek on his visit to Koblenz (1984).

Photo: WHU

The teaching program was gradually enhanced not only by the addition of a general studies module (studium generale), but also by additional options in the language study program, which had been launched with French and English. From 1988 onward, Italian, Japanese and Spanish were also offered, thus expanding the scope of the study abroad program. Just in time for the graduation of the initial cohort, a placement service was set up to ease the graduates’ transition to the labor market.³⁷ An alumni association was founded in the same year under the programmatic name In Praxi e.V.³⁸ The association initially focused on networking and continuing education. Understandably, the goal of lending financial support to the school did not become important until later, especially with the launch of the In Praxi Foundation by C. Erik Schäfer, Gerd Ködding and Wolfe Diener in 1995.³⁹

The two semesters abroad that formed part of the Diplom program required the establishment of partnerships with foreign universities. The initial plan was to send relatively large numbers of students to a small number of foreign universities in France and the UK, later also in the United States. But the organizers soon recognized that, from a pedagogical standpoint, no more than two to three WHU students at a time should study at the same partner university. Thus, more partners were needed. However, fundamentally only mutual exchange agreements were concluded, and the foreign partners WHU approached worried that they might not be able to find enough candidates interested in attending a German business school that had not yet made a name for itself. Purchasing study places abroad was ruled out because the tuition fees at the institutions in question were generally higher than WHU’s fees. In addition, some partner universities paid particular attention to the academic standing of the other partners. WHU experienced this when talks with potential partners in the English-speaking world had to be abandoned because those partners took a critical view of WHU’s existing partnerships.⁴⁰ Finally, guest students needed local support – to find accommodation, handle problems with the authorities or deal with the other difficulties encountered when settling in.

Double-degree programs were also agreed. On October 28, 1989, the Ecole Supérieure de Commerce de Lyon signed an agreement for the first program of this kind. Others followed, such as the University of Texas at Austin in 1990 – here the fact that Austin and Koblenz were twinned cities played a key role.⁴¹ Programs of this kind enable students to acquire two degrees in different countries without substantially extending the period of study. Starting in November 1987, Bernadette Conraths-Coluccini served as the coordinator of WHU’s international programs.⁴² Her duties were taken on next by Axel Schumacher and then by Stefanie Schweins, both of whom performed them with exceptional dedication and empathy. From the very start, expanding the options for student exchanges hinged on the unflagging commitment of Academic Director Michael Frenkel, whose term of office was interrupted only by Jürgen Weigand between 2002 and 2006. Both men made maximum use of their networks with the presidents and deans of other universities – networks that were also developed at the European Foundation of Management Development. In parallel with rising enrollments, the number of partner universities grew to 204 in 2018 (more in Chapters 4 and 9, Appendix 9.6).

Initially, the Chamber of Commerce and Industry and the WHU Foundation provided assistance with the school’s administration. In June 1985, Jürgen Büring, an experienced lawyer, became manager of the WHU Foundation – initially for two days a week and then for four as of January 1, 1986 (Figure 6). Simultaneously, he took on administrative functions affecting the school. He remained in this position until his return to Hamburg in 1999. The school’s first head of administration or chancellor was Rolf Halten, starting July 1, 1988, who was followed by Günther Neuses as of February 1, 1989. Neuses remained in the position until June 30, 1990. In October 1990, he was succeeded by Inge Giebels, who remained in office until December 31, 1993 (Chapter 9, Appendix 9.2, p. 278). These rapid changes indicate the difficulty of the tasks that had to be addressed.

Figure 6 Jürgen Büring, attorney and director of the WHU Foundation (ca. 1988),⁴³ and Dean Wilhelm Pfähler (1988).

Photos: M. Brand/Focus Vallendar, A. Schumacher)

Academic self-governance had to be built up too, despite the school’s modest personnel numbers. The school’s founders had originally given the top position to Glittenberg, as one of the driving forces behind the project, but this solution was roundly criticized. As became evident, his title as professor was originally tied to the duration of his position at EBS, and he did not have a doctorate. On April 22, 1985, the Executive Board of the WHU Foundation relieved him of his duties.⁴⁴ Despite being offered the opportunity to make up for his lack of a doctorate by submitting a dissertation to WHU, he chose to leave. As Albers recalls, a further problem was that Glittenberg spent so much time arguing with the press about his titles that he was no longer able to perform his duties in full. Darscheid discovered that key state government requirements for taking up teaching activities had not been implemented and required urgent attention from a new dean.⁴⁵ Given all this, it was understandable that the public issued more than one death certificate for WHU.

On Glittenberg’s departure, Albers was appointed to the deanship – in addition to the tasks of developing his chair, the faculty and assisting in fundraising. It certainly isn’t idle speculation to assume that the burden of all these duties must have been a key reason for his accepting a professorship at Leuphana University Lüneburg after only two years at WHU. Although Lüneburg was also a fledgling institution like WHU, it offered Albers the opportunity to focus much more on his beloved research and provided a greater measure of financial security. As WHU’s only professor, König naturally succeeded Albers as dean, remaining in that position until December 31, 1988. He was followed by Pfähler, who occupied the post until September 30, 1990 (Figure 6). His successor was Weber. (See Chapter 9, Appendix 9.2, pp. 278, 279, for an overview of the deans and their terms of office.)

On March 18, 1985, the school’s senate was formally established. Although the founding senate continued to exist, it came to be seen as a committee of the new senate. In fact, its recommendations and decisions had a strong impact.⁴⁶ In addition, an academic advisory board was set up. With these bodies installed, the school was able to present the ministry with new examination regulations for Diplom programs on May 24, 1985; these were approved four months later. The doctoral program regulations were approved on September 24, 1986, and the habilitation program regulations on September 8, 1987. Both sets of regulations were soon put to use. In February 1987, the student body received its own statutes,⁴⁷ while the regulations existing for the school were replaced soon by a refined and enhanced charter (Chapter 3). Other sets of rules followed.

The school was originally housed in the Koblenz Karthause district. Though the premises were extended gradually, they remained cramped. In 1988, WHU was finally able to escape. Once the need for more appropriate premises had been acknowledged, the school began negotiations for a number of potential properties in Koblenz, Boppard and Vallendar. Ultimately, there were good reasons for relocating to Vallendar, where the late-baroque manor house (1772) of the d’Ester family – along with later additions (1898 and 1903) and a building under construction to house lecture halls and a library (1990) – was leased from the Vallendar town council.⁴⁸ The school began using its new premises on October 1, 1988. It would take two more years, however, until the new building with its lecture halls and library was completed.

Figure 7 Symbolic handing-over of the keys by the chair of the WHU Foundation, Hubert Scherer, to Dean Wolfgang König (in the background: Mayor Roland Schons, Vallendar) in the chapel of the Marienburg, WHU’s new home (October 1, 1988).

Photo: G. Juraschek

Although the figures for the first financial year developed more positively than forecast in the business plan, the school’s precarious financial situation was an ongoing problem during the following years. The foundation capital fell well short of the hoped-for figure, while interest income was lower than planned.⁴⁹ According to the WHU Foundation’s statutes, the capital stood at DM 5 million when the university was founded, and came largely from donations by the founding association. Only years later did endowments from third parties materialize. Financing methods were innovative, for example when a shareholder loan of DM 200k belonging to the Lohmann company was transferred to the WHU Foundation. The Chamber of Commerce and Industry made four contributions of DM 300k from 1986 onward to cover operating costs and, in an unplanned intervention, Rhineland-Palatinate’s Ministry of Economics and Transportation announced funding in October 1986 to finance Chair III.

The initial cohort of students graduated as planned in October 1988. It is hardly surprising that the external conditions and the requirements of the degree program conspired to reduce the original group to just 35 by the time they finished. Even so, the graduates found a warm welcome in the employment market, and some of them even went on to found their own companies. WHU’s Hochschulnachrichten (School News) reported on what were probably the very first companies established: Abacus Controllingsysteme GmbH and Icarus – Intelligente Logistik-Systeme GmbH.⁵⁰ Abacus would become the first company founded by an alumnus that went on to provide WHU with funding for slots for students.⁵¹ Many more start-ups followed (see Chapter 7 for more details).

In order to strengthen the school’s ties with the regional economy and, beyond that, with SMEs in general, the Forum Mittelstand GmbH was established, with interested SMEs as shareholders. Its purpose was to focus on research, training and consultation. Enthusiasm for the idea was great in the early years, but interest began to wane; as a result, the company itself was dissolved soon after the start of the new millennium, though those involved continued to pursue the idea behind it.⁵²

The public was quickly convinced that WHU’s teaching performance was outstanding. But for a long time, the research performed by its academics was largely ignored.⁵³ The school tried to draw attention to its work in this area in its first Forschungsbericht (research report), as well as via regular reports on research findings, awards and publications in its own magazine. The latter first appeared under the unassuming title of Hochschulnachrichten (School News), later being renamed Signale aus der WHU (Signals from WHU).⁵⁴ Admittedly, these publications were not highly successful when it comes to knowledge transfer; internships and students’ final theses were much more effective instruments for