Brief History of the Corporate University

By Kevin Wheeler
© 2005, Global Learning Resources, Inc.

From 1996 onwards, organizations have began to feel the pressures of a global marketplace, a more diversified and complex competitive environment, and a more discerning and complicated worldwide consumer. They have found it much more difficult to make the profit margins they were accustomed to make. CEO turnover, much of it caused by lack of profit performance, increased 53% from 1995 to 2001.

Organizations have also tasted for the first time what happens when there are fewer skilled people and a more diverse and independent workforce. The talent shortages that were briefly experienced as organizations crossed over the century marker are already returning in certain areas and will spread as the years go by. The overall population of workers will shrink and the ones remaining will be less skilled.

An early response to these pressures was to increase the amount of training available to all employees, and to focus extra effort on executive development. We saw a plethora of management offsites, strategic development seminars, and executive MBAs. General Electric's John F. Welch Leadership Center at Crotonville, New York became a model for other firms to emulate. Jack Welch became the model CEO, leading the training sessions and becoming the champion of continuous development.

And, almost simultaneously with this renewed emphasis on executive and other employee development, some organizations began organizing the training under an umbrella called a corporate university. It is true that General Motors and General Electric and other large manufacturing firms established high-level training institutes as early as the 1917, these were not really operating under the same charter that today's corporate university does

From the end of WWII to the mid-1960s, the business world was fairly predictable, American firms had few competitors, they operated in a mostly domestic marketplace, and the consumer was not as concerned about quality or choices as is today's consumer. What these firms really needed were more managers to operate complex manufacturing operations with thousands of employees. A shortage of managers and the slowness of the academic world to take up this slack, spurred them to develop their own vocational management development programs and institutes. Most were modeled after academic institutions and the classes were theoretical and traditional. Many of these later evolved into independent private universities and severed their connections with the founding firm.