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VIDEOMBA No Longer AAA?
Usefulness, ethics of b-school degrees come under fire.
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But they may want to ask what they expect to find there. American business schools are undergoing an identity crisis, forced to reconsider their curriculum and philosophy. And the cachet and value of a master’s in business administration has taken a serious hit.
In recent years, top business schools have routinely sent more than 40% of their graduates into finance, according to a recent New York Times article. Bear Stearns, Lehman Brothers, Goldman Sachs (GS), Morgan Stanley (MS) and other commercial and investment banks were the first to set up shop on campus. Tens of thousands of those positions -- and a number of the firms themselves -- have, of course, simply disappeared.
An MBA was once a passport into the gilded halls of Wall Street. John Thain, Vikram Pandit, and Dick Fuld all have one; to be fair, so do many of those who've managed to avoid the harsh spotlight. Still, these men were looked upon as gods on b-school campuses - their careers and their salaries, their battles and victories, were celebrated and studied by young acolytes.
Until recently, business education focused on maximizing shareholder value. “The new logic of shareholder primacy absolved management of any responsibility for anything other than financial results,” said one professor in the Times article.
This is changing. On many campuses, new approaches and curriculums are underway. Schools are placing attention on long-term thinking and leadership, and at places like Harvard and New York University, classes have been created to openly dissect the economic crisis.
“We lived through an enormous extended period of financial good times, and people became less focused on risks and risk management and more focused on making money,” Jay O. Light, the dean of Harvard Business School, told the Times. “We need to move that focus back toward the center.”
Some employers and recruiters are now questioning the value of an MBA, urging young people to consider on-the-job training over b-school. I spoke to several friends, laid off from jobs on Wall Street, who seconded this notion. One friend, previously of Citigroup (C), is instead opting for law school over business school.
If business schools are in need of an image adjustment, one place to start is their ethics. To me, an exasperating part of the whole sad Wall Street saga is the conspicuous lack of a mea culpa. Executives just can’t stomach apologizing. Elsewhere in the world, apology is commonplace - heck, in China, they execute perpetrators of corporate malfeasance.
But these individuals are products of their environments. According to a study of cheating among graduate students, published in 2006 in the journal Academy of Management Learning & Education, 56% of all MBA students cheated regularly - more than in any other discipline.
The reason was “perceived peer behavior” - in other words, students thought everyone else was doing it.
Sounds familiar, doesn't it?
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