Try to remember, that time in September, 2000. Back then, handfuls of MBA students were dropping out or deferring their graduate education in favor of launching dot-coms or joining high-flying startups. What a difference two years can make. This September, the mood on B-school campuses across the country has certainly taken a somber turn.
With the bursting of the dot-com bubble, a shaky economy, and corporate-ethics scandals weighing on their minds, the MBA Class of 2004 comes to campus with a far different mindset than recent classes. And here's the interesting part: Nobody seems to be really complaining about the hard times, not even B-school professors and administrators.
Indeed, many are asking whether the MBA--a professional degree without a true profession attached--should be followed by a license. That would make an MBA much like a law degree, with the recipient then having to pass the bar before practicing. As any good lawyer or judge will tell you, learning all about the law is one thing, being qualified to put it into practice is another.
For now, the debate remains theoretical. Nothing indicates that licensure will soon be on the agenda of companies that employ MBAs. Still, as the leaves turn, ample evidence suggests that ethics, responsibility, and a focus on something bigger than making a quick buck are more fashionable nowadays at B-schools than anytime in the last few decades. Here are examples from some of the top B-schools in the country:
Wharton's Ethical Mission
At the University of Pennsylvania's Wharton School, a crusade atmosphere is in the air. The Class of 2004's theme is that good businesses and businesspeople are still out there--and this group wants to join them. Says Rusty Kelly, a former Enron employee who left the company in 2001 to attend seminary school and is now a first-year student at Wharton: "Being here allows us to be in a position to make a difference."
He's not alone in this view. "Just because we're disappointed with the integrity of a few firms, really just a few people, there's no reason to shut yourself off from that world," says Isabel Greiner, who worked for Estée Lauder in marketing before deciding she needed more quantitative skills to move forward in the business world. Many first-year MBAs say they're actually looking forward to their ethics and business-law classes. That's a switch. For years, B-school students more often have balked at ethics coursework.
Among the internationally diverse class at Wharton, there's a smattering of skepticism about this approach. Some foreign students see the focus on ethics and good business as U.S-centric. Says Natalie Kulik, a first-year student from Russia: "To me, this is not a scandal. In Russia, when the banks were in trouble, it brought the entire country to a halt for several months. Shops closed, everything closed down. To me, this isn't so threatening."
That doesn't mean the ethics question isn't on the minds of international enrollees. "I'd never lie to my shareholders or my customers, because I need them. Trust is the foundation of the capitalist system," says Bertrand Schmit, a student from France who ran his own company and has already had to tell investors bad news more than once. "I just told them the truth," he says.
Wharton ethics professor Tom Donaldson, who testified before Congress several times in the Enron hearings, says his course offerings have never been more timely. "It's a myth that people gain their ethics at their mother's and father's knees. It turns out that one of the most significant periods of ethical development occurs in your 20s," says Donaldson. "Here, we can throw at our students any challenge they might face. They will hit these challenges hard in the real world, but softly in the classroom--[here], their careers are not on the line."
Donaldson's goal: To get every student to ask themselves fundamental questions about the nature of free markets and the corporation--and to remember the words of 18th century theorist Adam Smith, who argued that the capitalist system won't work without moral cooperation. Says Donaldson: "That's something we've seen very clearly lately."
Even with a strong focus on ethics, former private-equity banker and Class of 2004 member Ann Zink notes: "There will always be people in the business world who take profit over integrity. Are there people here, our classmates, who would behave this way, and would we even recognize it?"
Wharton Admissions Director Rosemaria Martinelli wonders, too. She's already looking for students in nontraditional fields, like nongovernmental organizations and government and nonprofit agencies, in hopes of rounding out each class with students more attuned to ethical considerations.
Changing the type of student the school targets makes a difference only at the margins, concedes Martinelli. Still, her team has focused more on detecting an applicant's value system and sense of self in essays and interviews. "You can see trends in a person's conduct over time, too," says Martinelli. "It's tough, but we're looking a lot harder."
Anderson's Learning Curve
At the Anderson School of the University of California, Los Angeles, you don't have to look far for signs of conspicuous excess. The evidence is all around--Hollywood, Rodeo Drive, lush mansions dotting hillsides, and fancy sports cars making their way through the miles of traffic on the state's freeways. Andersen Dean Bruce Willison contends, though, that the reasons to get an MBA haven't changed all that much, even if the supergenerous recruiting packages offered to MBAs a few years ago have dwindled.
Learning the fundamental building blocks of business and management and honing one's business intuition are still key reasons to get an MBA, argues Willison. The onus is now on B-schools to shake things up a little. "It's another curve in the changing road of providing management education. Just as 'e-business' influenced management evaluation but didn't radicalize it, so, too, will these issues surrounding governance, transparency, and ethics."
And what does Willison think UCLA and other B-schools can do? "As academic institutions, [we] have the independence of being above the fray. We can influence perceptions by ensuring that we educate women and men about the ethical dilemmas managers face across business functions." That's a tactic you hear a lot from B-school deans across the country these days.
Notre Dame's Life Lessons
At Notre Dame, founded by Fathers of the Holy Cross, the need to instill ethics in students is foremost on the mind of Carolyn Woo, dean of the Mendoza School of Business. Woo was grappling with the study of business motivations long before the recent wave of corporate scandals. And what she has seen isn't all promising.
"Business education can be very self-focused and arrogant," she says. "We've used frameworks to teach that are callous and not very broad-minded. We very much reflect the culture of beating the Joneses."
Woo says Notre Dame is trying to take the lead in changing the way MBAs--and even business majors in undergraduate school--are taught. To start, she wants to attract and admit students who already believe that "life is about more than just having a lot" and who care as much about how they conduct themselves in the course of achieving success as they do about success itself.
With MBA applications so polished and interviews often rehearsed, Woos says choosing whom to admit sometimes comes down to instinct. She's trying to gauge things like, does the applicant believe that the good guys can win? Does the person have the mindset that there's more to life than just a promotion? It's harder to fake a gut reaction, Woo contends: "Dogs and babies know when people are sincere."
Notre Dame's curriculum has shifted somewhat for 2002-03, putting even more emphasis on values, ethics, and community responsibility. Also new this year: an MBA Values Committee, which will craft a code of beliefs and ethics to which graduates of Notre Dame should aspire.
Building Trust at UMich
When Robert Dolan took over as the dean of the University of Michigan last fall, the economy was faltering, the nation was in shock after September 11, and corporate scandals were just beginning to unfold. A former Harvard Business School professor, Dolan says he saw the handwriting on the wall: "I don't think [the new concern for ethics] is a fad at all." He believes Michigan has a built-in advantage by having a sense of "Midwest values," something Dolan claims applicants self-select for.
This year, the B-school at Ann Arbor added an extra day of orientation, with a Leadership Development Program designed to show how students can be ethical leaders. Speakers included Genentech COO Myrtle Potter, General Electric CEO Jeff Immelt, and Steelcase CEO Jim Hackett, among scores of corporate execs talking about their struggles to do well while doing good.
In between speakers, the Class of 2004 participated in fast-paced workshops and team-building class games--all in an effort to make them think about ethics, working together honestly, and leading others by example, says Noel Tichy, a Michigan professor and architect of the program.
"THE RIGHT THING."
The exercises seemed to be a hit with enrollees. "Business has a long way to go to win back the public trust," says Jeff Phillips, a graduate of the Air Force Academy, a captain in the Air Force, and now a UMich MBA student. He credits his military training with a basic belief: "We're taught to do the right thing because it's the right thing to do."
Some of Phillips' classmates quietly scoffed at his view. But the idea of going to jail seemed to resonate strongly in the minds of some members of the Wolverine Class of 2004. "You just don't want to be that guy," says Ojas Patel, who finished medical school before enrolling in the MBA program. "What's more disturbing is to think about all the people who got [hurt] by these few guys."
That may not be what many people expect to hear from a new MBA student. It's a shift in mindset that many educators say they haven't seen in decades.
So what will it take? Nandini Parthasarathy, an MBA student from India, sees a need to "shift away from the focus on earnings and only doing what's in the interest of shareholders, and start thinking about long-term gains and what's right for everyone."
Adds Kevin Oh, a second-year student guiding first-years through the orientation: "We have to change our goals as future CEOs to reflect promoting a sound business that gives back to the community, does things honestly, and still grows profits. To do that, you have to have integrity."
Perhaps the most intriguing advice the Michigan MBA students took with them from the four-day ethics and leadership boot camp came from Genentech's Porter. She told the 438-person class: "Know the difference between right and wrong. Know your values, and live them everyday. Because once you decide to go down the path that is ethically questionable, it's all grey, and it turns to black. If you ever question what's right and what's wrong, grab the nearest five-year-old and ask them. It's really clear to a child, and it should be to all of us, too."
From the mouths of babes. That's a lesson MBAs might want to ponder this September as Corporate America struggles to restore its tarnished reputation.
By Jennifer Merritt in New York