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
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
business-school industry is a competitive and crowded one, with
about 700 schools offering a range of degrees. …