In 2008, the Robert H. Smith School of Business announced a $12 million PhD program initiative that will significantly enhance the school’s ability to retain and attract the world’s best and brightest students. The initiative—one of the most ambitious in the United States—increases annual doctoral stipends by 45 percent to $32,500 and provides research and travel support. Philanthropist and school namesake Robert H. Smith, a 1950 graduate, contributed $6 million toward the program, matched with funds from the University of Maryland and the business school.

This significant investment in the school’s PhD program bucks the current trend in business schools, many of which are downsizing their doctoral programs due to a lack of resources. Unlike MBA programs, which generate revenue for schools, a doctoral program costs money. And because rankings are generally based on the strength of a school’s MBA program rather than its PhD program, there is little reputational or financial incentive for a school to invest in its doctoral program.

So when a school is strapped for cash its doctoral program often feels the pinch. This has led to smaller doctoral programs across the board, which has in turn led to a nationwide shortage of academically qualified business school faculty. The problem is so severe that the Association to Advance Collegiate Schools of Business (AACSB) Management Education Task Force, in its 2003 study “Management Education At Risk,” declared that “Unless decisive action is taken to reverse declines in business doctoral education, academic business schools, universities, and society will be faced with an inevitable erosion in the quality of business education and research.”