PROSPECTIVE students are weighing the costs and potential benefits of a master of business administration (MBA) degree carefully these days.
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.
"More and more, business schools will not be able to do everything well," says John Gould, dean of the Graduate School of Business at the University of Chicago.
The business-school deans interviewed for this article all are trying to make the reevaluation and revamping of their programs a continuing process.
"We don't want curriculum to be revised in a massive effort and then not looked at for 20 years," says Donald Jacobs, dean of the J. L. Kellogg Graduate School of Management at Northwestern University, in Evanston, Ill. Dean Jacobs says research done by Kellogg professors keeps the curriculum "alive," with about a 10- to 20-percent change in courses occurring every year.
Many deans say the real key to keeping their course offerings relevant is the executive education programs many schools run alongside regular MBA classes.
"Executive programs are our antenna to the real world," Jacobs says. "Every week 100 executives show up on our campus to take one of our seminars. They bring with them the problems they are facing out there."
These challenges spawn some of the hot courses being taught in business schools today. Some of the most popular courses include less familiar topics, such as turnaround management at Indiana University, international labor resources at Stanford University, manufacturing technologies at the Massachusetts Institute of Technology and Carnegie Mellon, and "total quality management" at many schools. Total quality management is the Japanese-led effort on the part of an entire business organization to constantl y renew and improve quality, training, and productivity.
In order to shake up the traditional lecture-discussion approach to business education, many schools are adding carefully supervised work experience to their programs. Even Harvard Business School is considering adding fieldwork to its famous case-study approach. At the University of Michigan, professors from four different business specialties team-teach students for seven weeks. Groups of students then "go out into industry to actually observe and participate in operational improvement," says Dean Whit e. "This is the equivalent of medical students making rounds. They actually have to get out of the classroom and see."
In searching for ideas to rejuvenate its program, "we took some of the advice we give our students," says professor Linda Green at the Graduate School of Business at Columbia University in New York, who headed the curriculum review committee there. "Do this in consultation with your customers." Columbia embarked on a research program of surveys, focus groups, and interviews with faculty, students, 2,000 alumni, and senior executives in successful companies to find out where to improve its program.
Some business schools even envision altering the traditional two-year MBA program. Darden's Rosenblum imagines a scenario where a one-year program undertaken immediately after an undergraduate degree is followed by occasional industry- and career-specific programs over the ensuing 20 years.
"We are moving toward the acceptance and the enthusiastic embrace of lifelong learning as a possibility for business education," Rosenblum says. "We know that someone needs to return to learning as a regular habit for their professional life."
But Chicago's Dean Gould adds a cautionary note about this change: Alumni can tell schools what works and what does not, he says: "We must preserve the things that have passed the test of time.... We cannot throw out the baby with the bathwater."