Schools revamp, refocus MBA programs

MBA letters


BOB MOON: The financial crisis, the global recession, might make you wonder: Just what have they been teaching at business schools lately? The people who put together MBA programs have been doing some learning of their own. Yale, Stanford, U.C. Berkeley and Johns Hopkins have all revamped their focus in the past few years. The Wharton School of the University of Pennsylvania is the latest to join the list.

Joining us is Professor Richard Shell. He's chairman of Wharton's MBA review committee, and a professor of legal studies, business ethics and management. Thanks for being with us.

RICHARD SHELL: Bob, thank you very much.

MOON: Professor Shell, this is the first time in 17 years that Wharton has revamped its curricula. I'm guessing that it's no coincidence that there's a real lack of public faith out there in the MBA grads who are behind the big economic mess we're in. Are these changes a response to us?

SHELL: Well, Bob, I wouldn't say that. We actually started the review process back in 2007 and then that was followed by a faculty survey. And so by the time my committee was appointed in 2009, we'd been at it for a couple years. So I would say the financial crisis informed what we were doing, but it wasn't the cause of what we did.

MOON: Well that having been said, let me read you a quick quote from the business school at Johns Hopkins. He said, "The MBA became a degree in methodology. We produced masters of financial engineering, people who didn't have heart and soul." Do you see any truth in that?

SHELL: Oh, boy. I really don't. Maybe it's because I teach law and ethics myself that I've always felt that the kinds of content that we've content that we deliver, in our MBA program at least, is sort of balance between the human skills of business as well as the analytic skills. In our new curriculum, one of the things we did that I think does respond to that perception is we've doubled the amount of statistics and basic economics that we're delivering to the students with the thought that maybe some of what was missing was a real calibration of what risk really is, and we need to make sure that the people making the decisions up on the top floor need to know what the people down no the bottom floor are doing when they invent some of these instruments that got us in trouble.

MOON: One of the areas that I notice you're going to put a renewed focus on on is globalization. Why now?

SHELL: What's happened that we noticed in our research is that the global aspects of business have become much more the background of all business. So at this point we're really looking to see how we can move some of our students in our classes overseas to actually be delivered a little bit more on the ground in some of these locations where business is done, rather than just study it in a classroom.

MOON: Another, what I would call real world change that I saw was this idea of tuition-free continuing education. Can you explain that?

SHELL: We feel very strongly about that. Lawyers have continuing education, that's a requirement of maintaining their license to practice law. Physicians have continuing education. It really looked like a huge opportunity for us to lay the groundwork for a new model. And instead of thinking of an MBA as something that you came, did for two years, and then the only other touch was reunions, we see this as a huge opportunity for our graduates to continue to refresh our knowledge and for them to continue to refresh us.

MOON: It's a recognition that in this day and age, people are bouncing between jobs all the time.

SHELL: All the time. The average time an MBA graduate is in their first job is 18 months. And most of them will go through at least four to six careers after they graduate. And all of those transitions are going to require them to know something that they didn't know when they left us. So business education begins with your MBA, but it doesn't end with your graduation.

MOON: Professor Richard Shell. He headed up the MBA review committee and teaches law, business ethics and management at the Wharton School of the University of Pennsylvania. Professor Shell, good to talk to you.

SHELL: Thank you, Bob. It's been a pleasure.

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I couldn't help but laugh out loud hearing Professor Shell's response to the Johns Hopkins business school quote Bob Moon referenced.

To the question "Do you see any truth" to the notion that today's MBA grads are "masters of financial engineering ... who didn't have heart and soul" he, without missing a beat, said "Oh, boy. I really don't. Maybe it's because I teach law and ethics myself ...."


The very phrase "law and ethics" must surely qualify as an oxymoron in its own right, right?

Small wonder, then, that he considers financial wizardry that can bring multi-trillion-dollar financial institutions to their knees as simply a cirriculum glitch that needs "calibration of what risk really is" and, to accomplish that, they should double "the amount of statistics and basic economics" in the course synopsis.

We don't have enough "statistics" and "basic economics" already?

Methinks business schools already teach too much of the mechanics of economics and statistics and cost-benefit analyses and not nearly enough social responsibility, human cost-benefits and national macro-level consequences of that "financial engineering."

But wait, there's more!!

Shell also wants to further globalize the mindset of new grads.

Oh great.
That's what we need.... even MORE people thinking that American jobs are just another expendible commodity in the global marketplace.

Sure, sent those jobs to India or China....
Be global....
And then wonder why no one in America has a job or an income to pay his mortgage or buy those products we don't build here any more.

Count me as totally unimpressed with the Wharton School's calibre of thinking.

One significant missing component in top MBA programs is information systems.

I do not mean programming.

I mean how information impact the "enterprise" and society. When you work very hard doing an MBA & they ignore information systems, by definition systems are not important.

It's easy to teach finance, accounting & marketing in 14 week increments... systems take more attention.

I just rephrasing Peter Drucker's statement: "...to treat accounting and systems as two separate and unrelated academic and career disciplines is UNACCEPTABLE."

Information systems increasingly run our lives... and senior managers fundamentally regard systems as an irritating expense.

Lots of good comments on this site. Here's my $.02

Quote; "We actually started the review process back in 2007 and then that was followed by a faculty survey. And so by the time my committee was appointed in 2009, we'd been at it for a couple years. So I would say the financial crisis informed what we were doing, but it wasn't the cause of what we did."

Did anyone notice the 2007 date? I'd say the financial crises of 2007 is an extension of the dot com scandals of the early 2000's. The crash was put off by cheap money printed during the first decade. It's part of an ethical/moral crises that has been going on for millenia. People who run things are disconnected from those they run. We are all disposable in this system.
Anyone remember Enron? and the plethora of scams beforehand?
Also, I noticed how the professor is all for 'continuing education'? From my perspective, if I'm actively working in a field, that is better than school related 'continuing education'. If I'm interested in my work, I will want to do it better. If I'm interested in making money, I'll find ways to do that.
How about the founder of the Wendy's restaurant chain who didn't finish high school (GED at age 60). Is all this schooling really necessary? A lot of what we do is innate, and formal schooling doesn't change that.
I think the comments about the MBA programs as money mills is spot on.
Best to all in this international free trade game.

I think Professor Richard Shell, who stated he teaches law and ethics, strangely didn't mention the problem of ethics. As we are finding out from Merrill Lynch, the MBAs didn't have any regard for the well-being and interests of the company and shareholders they worked for. If anything, Professor Shell perhaps needs to take a closer look at his own curriculum.

Um, MBAs know plenty about globalization already: for years, they've been shipping white-collar jobs overseas. By the thousands.

But there are four big things that MBAs demonstrably don't know:

What to do with the people left behind after their jobs go overseas. These are people with bachelors, masters, PhD and other advanced degrees who have great job skills. They used to be productive, tax-paying members of society. They don't want to collect unemployment, and the rest of us don't want to pay them unemployment compensation; we'd rather have them doing useful work. But MBAs don't see that side of the equation. This is the part of what MBAs do that is bankrupting America.

The value of creativity, entrepreneurship, and research. MBAs are by nature *administrators*, not inventors or discoverers. The major drug companies complain they have no new drugs to bring to market, because the MBAs eliminated or emasculated the research labs. Taking a risk on a new idea is anathema to an MBA, as is basic research that won't generate revenue for the current quarter. We need MBA students to take courses that will teach them how people who investigate and create really do bring value to enterprises and are essential employees.

What opportunity is. The previous item was about the things an enterprise can do to seek opportunities, which are strange enough to the MBA mindset by themselves. Opportunity is the mind-blowing (to an MBA) concept that makes people take risks, learn new things, and create new products. MBA students need to be taught the *concept* of opportunity, in addition to the activities needed to realize the concept.

That "privatize the profit, socialize the risk" is fundamentally *un*ethical. Billions of dollars have been tied up over the past 30 years in private wealth. That money is not being put to work; it's stagnating. Meanwhile, our government and others are staggering under the realized risk that the MBAs externalized (socialized). It's no wonder our economy is having such a difficult time recovering. It's not as catchy, but MBAs should switch to "invest the profit, embrace and understand the risk." Privatization and socialization are not capitalistic activities. MBA students should learn that investment and exploration drive enterprises in successful capitalist economies.

I believe the focus on globilaztion is crucial. In the book "Free Lunch" \, David Johnston says: "Traditional manufacturing work is not the only labor that is going offshore, either. Any work done on a computer can be moved overseas. Banks, sodtware firms and airlines now have people in India answering phones...White-collar jobs moving offshore may well be the next great economic issue confronting America. It is a problem that even the most ardent advoctaes of free trade are beginning to acknowledge has a huge potential to disrupt society." (p.48 & 49). ~End of quote

President Obama , if I recall correctly, sometime ago pointed out that 95% of emerging markets are outside of the U.S.

I'm counting on Wharton...

I got an MBA from the University of New Mexico a couple of years ago. MBA programs need to be reworked so the schools profit motivation is minimized. I turned in NOTHING for one class and still got an A - the class required a couple papers, a mid-term, and a final. Other students did the same thing to "test the system" over a 2 year period and each person who turned in nothing got A's.

UNM's MBA program is about money and only money. You can get A's from several professors even if you do nothing or very little at all, as long as the business school profs keep getting their paychecks.

I would never hire an MBA over another candidate if this is how business schools (aka profit centers for universities) are operated nationally.

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