How is The Wharton School responding to the economic crisis?
Business schools have a responsibility to prevent a repeat of this crisis. Several of our faculty are looking at executive compensation systems which have been misaligned. Senior bankers had short-term incentives to take leveraged bets on risky assets to increase their own bonuses and their company stock prices. The answer is not to limit CEO pay, but to realign incentives with the long-term performance of the company.
We are also reviewing corporate governance and the role of the board within companies. It is now clear that boards have been largely ineffective because they had restricted access to information and they were also under pressure to support CEO initiatives which boosted short-term shareholder value. There are no simple solutions, but this is a crucial area for change.
In October 2008, I initiated a for-credit class focused on the financial crisis. When Lehman Brothers collapsed, we realised that students will need a grasp of the causes and potential solutions for the crisis. Over 260 students have signed up for the class which is delivered by a team of faculty from diverse disciplines. They will leave the class equipped to understand the issues and implications of the crisis as well as have a better understanding of the social responsibilities of leaders in the modern financial sector.
How should MBA curricula offered by schools adapt to meet the changing needs of corporations and candidates?
US business schools have clung, almost universally, to a
traditional delivery format. This format is based on about 90 percent
classroom instruction and individual assessment. In the future, I
expect much more team-based assessment, experiential learning through
simulations and projects, modular learning in different parts of the
world and modular executive MBA programs for senior professionals who
can carry on working throughout their studies. Yale has moved away from
the traditional functionally based class design to a cross-functional,
multidisciplinary class often taught by multiple professors and has
perhaps been the most innovative in curricula reform. Wharton is
perhaps leading the way in experiential learning through simulations
and projects and the Lauder Institute is at the vanguard of these
changes.
What has been the impact of the current recession on business schools?
Job losses have resulted in more people looking to take
up an MBA and the current recession is stimulating more applications in
the short term. However, business schools are not immune and, if the
recession continues, then this demand spike will plateau and even begin
to fall after a year or so.
Employment demand for MBAs has been affected, especially so in
the financial services. However, it is interesting that unlike what has
been seen in previous recessions, there is a strong demand for MBAs in
the consulting industry. Consulting firms are being called in to
conduct restructuring and strategic realignment work and this is
fuelling continued recruitment. There will always be a strong financial
services industry in New York and London. Hence, recruiting in this
sector will resume sooner than many expect.
For the next year or two, MBA graduates will face a difficult
employment market and will have to be very flexible in terms of their
employment choices and salary expectations. I am confident the
employment outlook for MBAs will quickly improve once economies around
the world begin to improve.
What qualities do you think employers will be looking for in the MBAs they choose to hire?
Many MBA employers are looking for bright, mature, responsible people with good technical skills in a specific field and excellent interpersonal skills. I do not think the profile will change in most industries.
However, I do think there will be a change in financial services. Banks will look for fewer young rocket scientists as regulation limits some of the opportunities in derivative products (although as we all know regulation in one area leads to opportunity in another). Banks will look for more people who can restructure financial assets and those who know how to run and safeguard bank assets. Whereas business schools in the US have been focused on training people in the skills for investment banking, there will be greater demand for people with the skills required for sound commercial banking. US schools will probably have to change their curricula to meet this growing need and we are currently reviewing this requirement.
Is the US model of the MBA being called into question by the current economic crisis?>
US business schools are no longer the dominant force in MBA education, with real alternatives available in Europe and more recently in Asia. Candidates are choosing between one and two-year programs and between classroom-based versus experiential learning formats.
However, US business schools remain unchallenged in terms of the creation of business knowledge. Very few business schools outside the US are contributing valuable research. Faculty shortage is a problem for all business schools. In any year, we may be unable to fill half of our vacancies but Wharton retains the ability to attract the top faculty.
I donat think the current crisis has any bearing on the popularity or demand for US business school education. We like competition, and we are confident we can become better as a result.
Diversity is an important principle of Whartonas candidate selection. Could you explain the reasons behind this and the efforts you are undertaking to maintain class diversity?
Wharton looks for the best and brightest candidates and we find these people hail from diverse countries and backgrounds. Certainly we try to balance each admitted class so that no industry or country predominates and we avoid admitting people on the basis of GMAT scores alone. We believe students learn a great deal from each other and it is the diversity of the background of team members in group assignments that can really enhance the MBA learning experience.
We have many initiatives to increase diversity. Wharton is the largest participant in the 10,000 Women Entrepreneurs Program, sponsored by Goldman Sachs, which provides educational access to budding female entrepreneurs in developing countries. Wharton has travelled the world with your own QS World MBA Tour to seek talented candidates. The diversity and quality of our students stands us apart. In the face of competition from schools at home and abroad, we are confident we can maintain our lead in attracting a diverse pool of the best and brightest young professionals in the world.
Please provide an overview of the MBA program at the Lauder Institute.
The Lauder Institute offers a combined MBA/MA in International
Studies and also provides customised language training in core business
languages such as Arabic, Chinese, Japanese, French, German,
Portuguese, Russian or Spanish.
The eligibility criteria for the course is that all candidates
have to be accepted for the Wharton full-time MBA and then meet
additional language and selection criteria. Lauder students spend two
months in summer language and culture immersion and at least two weeks
of their program working on team projects overseas. The latter is
funded by the school. For example, we have one project team working on
increasing agricultural yields in Senegal and their team has a German
speaker negotiating with machinery suppliers in Germany as well as a
Portuguese speaker negotiating with seed and fertilizer suppliers in
Brazil. They travel the world to deliver their project goals and are
supervised by professors from Wharton and the University of
Pennsylvania. These projects really energise the students and give them
invaluable experience of working in teams and in different cultural
surroundings. Students also make a valuable network of senior contacts
in every country they visit and this serves them well in their future
careers.
At Lauder, we want students who enjoy adding to their
intellect and thus we require them to do hands-on research. This MBA
program offers the unique opportunity of pursuing research (which is
academic as well as practical) as well as working closely with advisors
from both Wharton and the School of Arts & Sciences.
Source: www.TopMBA.com
Nunzio Quacquarelli is the Managing Director of QS
Ltd, the organisers of the QS World MBA Tour. The tour visits Delhi &
Mumbai on 11th and 13th July, 2009 respectively. Candidates can
register now at topmba.com