The Philadelphia Inquirer
By Jeff Gelles
Maybe it has something to do with Philadelphia's legendary
inferiority complex, but it sometimes seems we forget how rich we
are with institutions of higher learning - including some plainly
among the best of the best.
One is the University of Pennsylvania, an Ivy League school that
isn't just a great place for undergraduates. Penn's medical and law
schools, for example, consistently rank in their fields' top
tiers.
But there's only one Penn brand name that takes it, as the
sports folks say, to the next level: the Wharton School. It's a
name so noteworthy that it stands alone in descriptions, and
sometimes manages to eclipse Penn itself. Particularly in the world
of finance, Wharton ranks near or at the pinnacle in almost every
comparison.
So it's probably no surprise that Wharton was the Penn name at
the center of an unusual lawsuit that wrapped up last week in U.S.
District Court here - a case that raises fascinating questions
about the value of brand-name degrees, both to students and the
schools they attend.
Frank Reynolds, 46, enrolled eight years ago in Penn's Executive
Master's in Technology Management program. EMTM, as it is known, is
housed in Penn's School of Engineering and Applied Sciences, but
since 1998 it has been "cosponsored" by Wharton.
Therein - in that confusing and nuanced distinction - lies the
rub: Reynolds was so convinced that Wharton's name would confer a
special aura on him that he filed a lawsuit when he felt that aura
was being unfairly withheld.
In Penn's view, presented by attorney James P. Golden, Reynolds
was bent on payback because he was unhappy with the lines Penn
insisted on drawing that distinguished EMTM students from their
full-fledged Wharton counterparts.
Reynolds' attorney, Richard J. Heleniak, instead portrayed a
disgruntled consumer. He told the jury that Reynolds' case was
simply about "not getting what you paid for."
There are complications aplenty in this case. Reynolds has now
won two jury verdicts. His first, in which he was awarded $435,000
in damages from Penn in October, was voided on appeal. Last week, a
new jury awarded Reynolds $66,000; Penn's attorney said he planned
to challenge that judgment, too.
But beyond the complications lie clashing perspectives on what
Penn held out to Reynolds and his fellow students in the EMTM
program, as the university tried to simultaneously take advantage
of the Wharton brand name and avoid the risks of cheapening it.
Penn officials said a key concern was that the EMTM program, for
which admissions were considerably less competitive, not become a
"backdoor" to a Wharton M.B.A. But averting that risk while
capitalizing on the Wharton brand led to some subtle
distinctions.
Discussing one presentation that described EMTM as "a joint
venture" that "draws strongly on the resources of both schools," a
former associate director explained that "joint venture" did not
mean a joint degree. "The word joint was an adjective
here," Joel Adler told jurors. "Venture is the noun."
And yet, Penn also made clear that it expected EMTM students to
profit from the Wharton association.
In one e-mail to a prospective student, Adler explained how the
program would lead to a master's in engineering from Penn, and also
to a certificate cosigned by the deans of the engineering school
and of Wharton.
Adler wrote that the certificate "was created expressly at the
students' request to show that EMTM was a co-sponsored program
between Engineering and Wharton (as distinguished from a joint
degree or dual degree program). Graduates are therefore free to use
whatever affiliation suits them at the moment, Wharton,
Engineering, or Penn, in any combination."
Ultimately, there was one issue on which the plaintiff and
defense agreed: the outsize value of the Wharton brand. One irony
is that Reynolds' career may illustrate that both sides exaggerate
its importance - that, as some studies suggest, the best students
will succeed no matter what "brand" their diploma bears.
Reynolds says Wharton's brand proved its value to him
immediately. Within a month of starting the EMTM program, and with
the help of the Wharton career-services office, he said he got an
executive position at Siemens AG as director of global business
development, at an annual salary of $269,000.
"It was exactly what I was paying for at Wharton," he told the
jury.
Reynolds says something changed about a year later - a change he
says culminated with an EMTM official threatening him with
discipline for portraying himself as a Wharton student.
Reynolds says he ultimately felt forced to resign his job at
Siemens, where he says he was known as "the Wharton guy," because
he feared being accused of misrepresenting himself professionally.
To remedy the situation, he applied to another top-tier business
school, the Sloan School of Management at Massachusetts Institute
of Technology.
Reynolds says the interruption came at great costs, even if he
ultimately landed on his feet - in his view, partly thanks to the
MIT brand. He now runs InVivo Therapeutics Corp., a Cambridge,
Mass., biotechnology start-up with the ambitious goal of finding
treatments for otherwise irreversible cases of paralysis.
Marc Brownstein, a branding expert at Philadelphia's Brownstein
Group, says Penn officials have good reasons to draw lines
protecting Wharton's brand. Like all owners of high-value brands,
they face a constant challenge in protecting them - including from
their own lapses in discipline.
"The Wharton brand has global gravitas," Brownstein says. "You
say that name anywhere around the world, and people instantly know
it and respect it. What's that worth?"
How about $100,000, the amount it would have cost to have just
given Reynolds his money back and avoided this entire mess?