`B' Schools Adapt to Meet Demand
PROSPECTIVE students are weighing the costs and potential benefits of a master of business administration (MBA) degree carefully these days.Skip to next paragraph
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Graduates of prestigious schools still stand a good chance of landing a lucrative job after graduation. But with unemployment rolls swollen with laid-off middle managers, the $100,000 cost of an MBA (including tuition, expenses, and lost salary) is becoming more daunting than ever.
Just as manufacturers churn out new models to try to cling to market share, business school deans are scrambling to revamp curricula and faculty.
"Business schools grew up in a period of relative tranquility," says John Rosenblum, dean of the Darden Graduate School of Business Administration at the University of Virginia in Charlottesville. "One could settle on a win- ning strategy and ride it for years.
"Now, what's not changing in the business world?" he asks. "Change and complexity are the rule."
To cope with this change, schools are revamping their programs in four areas. They are preparing students to do business in global markets; lead companies by using "soft" management skills; make decisions by using broad, long-term analysis; and consider ethical dimensions of their actions (see box, right).
Institutions like The Wharton School at the University of Pennsylvania in Philadelphia, Columbia Business School at Columbia University in New York, and Harvard Business School at Harvard University in Cambridge, Mass., have completed or are considering significant changes to their curricula and core requirements. Schools are being challenged to impart skills and knowledge that will remain relevant five or 10 years after graduation.
Business schools have traditionally given students a thorough training in the use of quantitative decisionmaking tools, such as statistics, accounting, economics, and financial and marketing analysis. But more corporations want newly minted MBAs to have participatory leadership styles. "Soft" skills, such as communicating effectively, negotiating, and having the flexibility to handle constant organizational change, are sought by companies.
"Business is about results. It's not fundamentally about ideas," says B. Joseph White, dean of the University of Michigan Business School in Ann Arbor. "There are a lot of good ideas out there, but if you don't have the leadership, communication, and negotiation skills to put ideas into action, you can't produce results."
Determining what priority to give "hard" quantitative training and fuzzier management skills has long been debated in business education. In 1959, two reports - one from the Ford Foundation, the other from the Carnegie Foundation - criticized the lack of research and academic substance in American business schools. A wave of reforms ensued that boosted their academic focus.
Mr. Rosenblum describes the debate as a "struggle between managerial relevance and academic rigor in both teaching and research."
Today, the pendulum is swinging back toward results-oriented management training. A 1988 report sponsored by the American Assembly of Collegiate Schools of Business recommended that the nation's businesses develop mission statements to help their customers (students and the companies that hire MBAs) differentiate among them. The AACSB reports that since 1987, freshman interest in undergraduate business majors has declined by one-third, implying a tightening of the supply of potential MBA students. The bu siness-school industry is a competitive and crowded one, with about 700 schools offering a range of degrees.