B-school curriculums will have to evolve to stay relevant, three business school professors argue.
Is the MBA degree still worth it?
Earlier this year, the Harvard Business Review published its list of the 50 best-performing CEOs in the world. The base for the survey was the chief executives of 1,109 companies.
Out of that top 50 list only 14 CEOs had master of business administration degrees. And only eight of those were from the U.S. schools. Furthermore, out of the original pool of candidates, only 32 percent had MBAs.
The results of this survey alone might be reason enough to question the relevancy of the degree in today's world.
When I started college in the late 1950s few of my classmates were planning to get an MBA as an advanced degree. Several were planning on going to law school, dental school or getting a master's in political science or history. But not business school. It wasn't until the late 1970s and 1980s that interest in business school seemed to take hold. Movies like "Wall Street" in 1987 made the business world sexy. The young investment bankers, private equity managers and analysts advanced the short-term strategies that laid the foundation for the recent financial disaster.
For some time now the MBA has been the "hot" ticket for the young and ambitious, the same way the engineering degree was after the Soviets launched Sputnik, causing near panic that the United States was technologically behind its Cold War adversary.
But since the most recent financial crash, criticism has been leveled against the kind of training the MBA provides.
In their recent book, "Rethinking the MBA," Harvard business school professors Srikant Datar, David Garvin and Patrick Cullen suggest that business schools played a contributing role in the financial meltdown of 2008. They argue that too many MBAs didn't learn the "importance of social responsibility, common-sense skepticism and respect for the risk they were taking with other people's money."
Is this kind of criticism enough to dissuade students from pursuing the degree? Not likely. The demand for the degree can be seen in our own community. The flagship program is probably the University of Minnesota's Carlson School of Business, followed by several others including the University of St. Thomas, St. Mary's University, Hamline, Concordia and Augsburg, to name a few. In addition to the standard schools there are about 50 online MBA programs available.
As the demand for the degree continues to grow, so does the demand for more relevancy.
Several national news magazines rank the business schools annually and while there is some fluctuation among the top 20 business schools, the names that regularly appear at or near the top include Harvard, the University of Chicago, Michigan, Duke, Northwestern and Pennsylvania.
Part of the argument for getting an MBA has to be considered in dollars and cents as well as future earnings. A student who wants to earn an MBA degree from a top school will pay in the neighborhood of $80,000 to $100,000 for the two years. There is a push-pull effect surrounding this process as well. As the demand for an MBA grows, so will the demand by the students for more options. The colleges and universities also play a part in this process. The business schools have become a new and major income stream for the colleges. But according to Prof. Datar, the demand for the traditional MBA, with high price tag, will start to tail off in favor of part-time or even online degrees.
In order to keep the MBA relevant, the colleges offering them will have to make the curriculum more responsive to the global economy. Here are some suggestions:
• Stress the importance of understanding the ethics of doing business in the world. Unfortunately, this subject has often gotten little concern in the "how-to" curriculums of most business schools.
• Include more relevant classes dealing with current issues facing communities both locally and globally.
• Teach the importance of the culture differences. The vast majority of students will be working with and/or for companies that do business worldwide.
• Teach the integration of the world of business and the world of geopolitics. Oftentimes they overlap.
• Place more emphasis on long-range strategic planning as opposed to the familiar strategy of planning for next quarter or the next year. Building a quality company takes time. It's not just about taking a quick profit for the shareholders and senior executives and moving on.
Is the MBA still worth it? I would answer with a qualified yes -- but with the caveat that the curriculum of most programs should be revised to meet the challenges that face the next generation of business leaders.