Running head: MANAGING ORGANIZATIONS & LEADING PEOPLE

Managing Organizations & Leading People
Cheu ly wgu Managing Organizations & Leading People
A1. Three years have gone by since Kaplan University Online restructured its business model. I was part of the massive laid off that shook the online for-profit schools back in the fall of 2011. Who is Kaplan University Online? Kaplan University Online is a division of the Washington Post (Hechinger, 2013, ∂ 1) an online university of higher learning education offering certificates, associates, bachelors and graduate degrees (Kaplan University, n.d., ∂ 1). Kaplan’s mission and market niche was to enroll adults or working adults who want to complete a college degree but neither has the time to enroll in a traditional campus. That being said, Kaplan was new player in the market competing against other for profit schools such as Devry Institute, ITT, Phoenix University to name a few.
In 2007, I was recruited by Kaplan’s HR department to work as an inside sales representative. Myself and 12 other individuals went through a 2-week training class covering Kaplan’s culture, Fafsa (free application for student aid), compliance and boilerplate sales script. The training was intense and strict focusing mostly on the sales script and preaching Kaplan’s ethics, integrity and mission. Like any other jobs I had before this; I took the challenge seriously and was focus on becoming the best at my trade. After my first week on the sales floor, I found myself enrolling more students than any other Kaplan University sales rep. My recognition and reputation quickly escalated to the CEO of Kaplan Inc and other top executives across the country. I was the poster child for the inside sales department. However after being on the job for nearly 3 months, I began to notice the unethical behaviors of Directors, Associate Directors, and inside sales rep trying to make their numbers. Each and everyday someone was either being fired or spoken to by HR department. The HR department became like a police force in the work place. As soon as a HR personal is on the floor either someone was being reprimanded or an issue is evolving. Needless to say, everyone was looking out for himself or herself. Directors needed to hit their numbers, Associate Directors needs to make sure they’re numbers are meeting Corporate expectations, and the top executives are concern about satisfying shareholders’ expectations. In nearly 7 months since I was employed as a sales representative, I witnessed the culture and mission has change. Kaplan was no longer changing lives of students, but instead corporate corruption of greed similar to other conglomerate that went down such as Enron, Worldcom and Anderson Consulting.
At the end of the quarter or year it wasn’t about how many student’s lives Kapan changed, retained or graduated, but instead how much revenue Kaplan brought in. By 2010, Kaplan Inc. gross $1.46 billion from title IV funding and another $450 million from Pell grants (Weil, 2012, p. 2). Kaplan was the pacemaker for the Washington Post brining in nearly 60% of the companies revenue.
A2. Kaplan University Online business model can be characterize in three leadership practices; Level 5 Leadership, Servant Leadership and Authentic Leadership. In a Level 5 leadership role, Kaplan’s chain of command is broken down to from CEO, Executive directors, Directors, Associate Director and Team Lead. The CEO role was to visit Chicago site once a year and discussed the success and vision of Kaplan Inc. moving forward. The chain of command is then broken down to an Executive Director at each site over looking four directors. Each director is assigned two Associated directors managing between forty-fifty inside sales representatives including team leads.
The Servant Leadership of the company falls under two categories the Associate Director and Team Lead. In both roles, Associate Director and Team Lead provided their team with optimism, supply leads and motivate their team to work hard and reach our monthly goals. In the event that a sales rep has pending enrollments, Team Leads are encouraged to come in on the weekends to close the deal.
Furthermore Team Leads are often view as Authentic leadership by Kaplan University. These individuals have proven success not only through the amount of enrollments but the ethics and integrity they’ve shown. These individuals can relate to the sales staff, understand their frustration and have the ability to coach their team.
A3. The top down management style of Kaplan has changed the culture tremendously. Top managements are to detached from the everyday activities of what a sales representative goes through. Management’s focus only on the front end, number of enrollments and less focus on the back end, retention of students. As the pressure for enrollments mounted, executive directors, directors, Associate Directors and sales rep began to enroll non- qualify students into the programs. The quality of students decline and the retention rates couple with graduation rates were well below the national average of other schools. For fear of losing one’s job, each department had their issues of ethics and integrity. Professors were put on probation if they flunk students; Directors, Associate directors and sales rep were constantly micro manage by the HR department if their numbers are down. HR department staffs on site were viewed as management’s police dogs to rid of employees who under perform.
B1. The strength of Kaplan’s business model are identified by their well-known parent company, The Washington Post and Kaplan’s test preps courses. As part of the sales script, sales representatives had to mentioned Kaplan’s two affiliations. The Washington Post, is one of America’s oldest newspaper and was founded in 1877 (Wikipidea, n.d., ∂ 1). In order to show Kaplan’s financial credibility, admissions advisors were told to inform that Warren Buffett sits on the board of the Washington Post.. In addition prior to the inception of Kaplan University Online Schools, Kaplan test prep has been around since 1938. The test preps included SAT, ACT, GMAT and GRE to named a few. Most students who are entering college would have to take some form of the SAT or ACT. From a marketing pitch, it was synonymous with education.
B2. Kaplan’s quick rise to success also had its share of weakness. The first major weakness Kaplan has was its management team. It was a top down management style that operated the business on fear and intimidation. Management was to detached from the daily activities and the logistics of the enrollment process. The average time it takes to enroll a student on the phone was about one in half hour. After a thirty minute interview with an admission’s advisor a student is put on hold for an average of 15 minutes or more before speaking to a financial aid personnel. Often times the students were so frustrated with the process that they opt out of the process entirely. The inefficient process lost nearly 30-40% new enrollments.
The second weakness of Kaplan’s business model was the quality of students they were enrolling. On the front end students were enrolling, but the actual amount of students that started or stay in school after 2 months were far below the standards. The process was like throwing darts on the wall and determining which student will stick or fall. A majority of the students that were enrolled for the online program did not have access to a computer at home or possess the fundamental software usage to attend school online. In other words, while Kaplan was receiving Title IV funding, their retention rates were 28%, 18% below the national average for online schools (Burnsad, 2010, ∂ 2).
B2. Kaplan University Online should be optimistic due to opportunities that exist in the market. According to Babson Survey Group, there was a 10.1% increase in enrollment for online courses in 2010. Basically 6.1 million students enroll in some form of online courses during the academic year (Lytle, 2011, ∂ 2). The market indicates that technology continues to play a huge part in academic and institution growth. The second opportunity is the slow growth of the economy. As unemployment rate remains high and competition grows among the labor market, individuals are looking to gain a competitive edge on their peers. According The National Association for Non Traditional students, 47 % of the students enrolling in colleges are over the age of 25 (Back To College, 2014, ∂ 3). As a result of the economy, the online schools opens doors for individuals with families that are unable to attend traditional or ground campus.
B3. Kaplan University is neither the first nor the only online school available to consumers. In today’s market, Kaplan University faces two threats: other online schools and government regulation on for profit schools. Today Kaplan faces schools such as Phoenix University, ITT, Devry and Western Governor University (WGU) to name a few. A majority of these schools were more established through their ground campus before opening up their online programs. Phoenix University Online would be a prime example of that. Phoenix University at the peak of 2010 has 112-ground campuses combine with their online program totaling 600,000 students in 2010. Schools such as this has more marketing leverage and capability to draw in future enrollments (Wikipedia, n.d., ∂ 3).
The second threat that Kaplan University face is government regulation on for profit schools. In 2011, the Education Department set new standards on for loan repayment rate and debt to income ratio for graduates. These new standards known as Gainful employment means for profit schools needs to be held accountable for excessively charging premium dollars on programs that does not pan off for graduates in the work force. Students who graduate from such programs will struggle to pay off their student loans and hurt the economy in the long run. As a result the government is setting strong guidelines for For-profit schools not to receive Title IV funding (financial aid) if the standards of their programs fell those guidelines. Kaplan University much like other For-profit school has to restructure their programs moving forward.

References
Back To College (2014). Back to college. Retrieved November 9, 2014, from http://www.back2college.com/library/faq.htm
Burnsad, B. (2010). Online Universities retention rate. Retrieved November 9, 2014, from http://www.usnews.com/education/online-education/articles/2010/10/22/online-universities-retention-rate-data
Hechinger, J. (2013, August 13). Washington Post Co.’s Future Tied to For-Profit Kaplan Business [Abstract]. Retrieved from http://www.bloomberg.com/news/2013-08-07/washington-post-co-s-future-tied-to-for-profit-kaplan-business.html.
Kaplan University (n.d.). Kaplan University. Retrieved November 2, 2014, from http://www.kaplanuniversity.edu/about/about-kaplan-university.aspx
Lytle, R. (2011). Online education continues growth. Retrieved November 9, 2014, from http://www.usnews.com/education/online-education/articles/2011/11/11/study-online-education-continues-growth
Weil, D. (2012). For-Profit Kaplan University Pays Executives a Quarter Billion Dollars, For-Profit Kaplan University Pays Executives a Quarter Billion Dollars, Courtesy of Students and taxpayes. Retrieved November 5, 2014, from http://www.truth-out.org/news/item/6021:forprofit-kaplan-university-pays-executives-a-quarter-billion-dollars-courtesy-of-students-and-taxpayers
Wikipedia (n.d.). Kaplan University. Retrieved November 4, 2014, from en.wikipedia.org/wiki/kaplan_university
Wikipedia (n.d.). Phoenix University. Retrieved November 9, 2014, from http://en.wikipedia.org/wiki/University_of_Phoenix
Wikipidea (n.d.). The washington post. Retrieved November 6, 2014, from http://en.wikipedia.org/wiki/The_Washington_Post