Commentary: B-Schools: A Failing Grade on Minorities

By Jennifer Merritt

When Angel Martin signed on last year to get an MBA from the University of California at Berkeley's Haas School of Business, she knew she'd be one of only a dozen minority students in her class of 250. The six African-American and six Hispanic students quickly formed a bond, helping one another along and, says Martin, working to boost the number of minority applicants to the B-school, which plummeted after a 1996 California proposition against affirmative action in higher ed. "We didn't come here to pick up a cause, but you get here and you don't have a choice, because there's nobody else to fight for it but you," says the 26-year-old Martin.

Now Berkeley's minority MBA students will feel even lonelier. In March, Haas Dean Thomas J. Campbell announced that the school would effectively be quitting a consortium that gives scholarships to minority MBAs. Because the move came after Haas had sent out acceptance letters for next fall, the school had to tell about two dozen prospective students that they would not be eligible for scholarships after all -- prompting many to switch to other schools.

Similar stories may soon play out at other top B-schools. In June, the U.S. Supreme Court is to decide two University of Michigan cases that represent the most significant challenge to affirmative action in higher ed in more than two decades. Already, the suits have prompted some colleges and B-schools to reconsider their affirmative-action efforts. Even if the court chooses not to toss out the current approach, the close scrutiny may chill efforts to lift minorities' share of college enrollment. "Not only have the hurdles to entry been increasing, but getting that good job and being connected to the fast track is tough for most people of color," says James H. Johnson, a professor of management at the University of North Carolina at Chapel Hill's Kenan-Flagler Business School, who mentors many minority alums.

The result is likely to be a deterioration in B-schools' already lackluster record with minorities. To be sure, B-schools are diverse -- Asian Americans are well represented, women make up about 29% of MBA students, and another 30% hail from outside the U.S. But B-schools have been largely unsuccessful in attracting U.S. blacks and Hispanics.

Indeed, those two groups, plus Native Americans, comprise only 11.9% of the top private schools last year, up from 9.9% in 1990, according to an analysis of BusinessWeek's biennial survey of the Top 30 MBA programs (chart). The top public schools, more vulnerable to attacks on affirmative action, have done worse: Their enrollment of these groups has plunged to just 8.4%, from 14.5% in 1990. Taken together, minority enrollment at BusinessWeek's Top 30 private and public schools actually dropped from 11.3% in 1990 to 10.7% in 2002. By contrast, a globalization push led to a doubling of international students over the same period.

The problem isn't much better outside of the elite B-schools. Among all accredited schools, only about 10% of the 108,000 MBAs enrolled in 2001-02 were minority, according to the Association to Advance Collegiate Schools of Business, the accrediting body for B-schools. "We're going to have to start doing some very different things because the numbers are nowhere near where they should be," says Ella Bell, an associate professor at Dartmouth College's Tuck School of Business, whose 460 full-time students are 18% minority.

Of course, Corporate America is part of the problem, too. Despite a handful of high-profile black CEOs like American Express Co.'s Ken Chenault or Merrill Lynch Inc.'s Stanley O'Neal, there aren't many role models or mentors to steer aspiring young minorities into an executive career. Business school enrollments, say experts, simply reflect that reality. Still, B-schools can do plenty more to shore up the pipeline, from extending outreach programs and alumni mentoring to including racial issues in executive education courses. "If corporations demanded more out of B-schools, they would be forced to respond," says Luke Visconti, co-founder of Diversity Inc., which tracks corporate diversity issues.

B-schools' disappointing record is of growing concern to corporations precisely because so many rely on them for tomorrow's executives. Many companies, especially consumer-oriented ones, are well aware that minority households account for some 19% of consumer spending, up from 12% in 1990, according to the Selig Center for Economic Growth at the University of Georgia. With minority families projected to swell faster than white ones over the next decade, corporations feel tremendous pressure to hire managers who reflect the growing portion of their customer base.

Last year, for example, the Business-Higher Education Forum, a group of 25 companies including Boeing, State Farm, and KPMG, began encouraging B-schools to circumvent court-imposed restrictions on race in admissions, hoping to tap a larger pool of grads to meet hiring needs. Diversity "drives greater innovation and the best business solutions, which are essential to competing [globally]," says Shirley Harrison, vice-president for diversity management at Altria Group Inc., which ties part of managers' bonuses to diversity goals.

What's particularly disheartening is that minority B-school enrollment has barely budged despite years of efforts by some schools and concerned nonprofits. They have shelled out hundreds of millions of dollars on everything from programs like LEAD (Leadership Education & Development), which brings high schoolers to minicamps for a taste of B-school, to the Consortium for Graduate Management Study, which Haas left. Since its founding in 1996, the Consortium has doled out nearly 5,000 scholarships at 14 B-schools and provided mentoring and career help to minority MBAs.

Despite such programs, the pool of minority MBA wannabes has remained stagnant. The number of minorities taking the Graduate Management Admissions Test, the key entrance exam for MBA programs, has been flat in the past decade, according to GMAC, which administers the exam. While the path into law, medicine, and education requires university credentials, the road to a career in business is murkier, says Karen Johns, director of the Diversity Pipeline Alliance, formed in 2001 to link B-school-related nonprofits.

Why does life in the executive suite have so little allure for minorities? Mostly because it still seems so unattainable, experts say. Blacks and Hispanics have few role models -- in their families, communities, or in media coverage of Corporate America. When successful minorities are portrayed in popular culture, they're often professionals, not executives. "You look up in your organization and see only a couple of people who look like you, and you start to wonder about your career path. It's daunting," says Colbert T. Boyd, a second-year student at Northwestern University's Kellogg School of Management and co-chair of the school's Black Management Assn.

Indeed, minorities who take jobs at large corporations generally encounter few who can relate to their experience. Just 12% of all executives and managers are minorities, according to the Bureau of Labor Statistics. So "very often, minorities aren't benefiting from the same insider information. They don't know all the players, and they don't have the inside track on how to go up in an organization," says Keith A. Caver, a director at the Center for Creative Leadership.

Corporate America can easily be perceived as unfriendly territory. Kellogg's Boyd says that in his pre-B-school consulting career, he sometimes found himself invisible at client meetings, even when he was lead consultant on a project. He considers himself lucky that his bosses were sensitive to racial politics and occasionally raised the issue with clients. But for the majority of blacks who face such slights early on, an MBA can seem too costly an investment in time and money for a future of continued frustration. "Minorities [don't] believe the degree is going to pay off...because they don't see themselves having a place at the table," says Dartmouth's Bell.

B-schools can't solve those problems, of course. But some do succeed in demystifying the business world and building confidence. For two decades, Harvard Business School has brought some 75 college seniors to Boston every year, mostly from historically black colleges, for an all-expenses-paid, weeklong program that highlights careers in business, what B-school is like, and the value of an MBA.

Harvard also hosts informal forums at about 40 campuses nationwide to introduce minority students to the MBA. The payoff: Fully 22% of Harvard Business School's 900 or so students are minority, a number that is a goal of many B-schools. (However, two conservative advocacy groups recently threatened to file suit against the summer program over its policy of admitting only minorities.)

Not every school can afford such programs. But few even do much outreach to undergrads on their own turf, says Derrick Bolton, director of admissions at Stanford University's Graduate School of Business. "If just half the schools with MBA programs reached out to their undergraduate populations, the pool of minority applicants would double," he says. Bolton is pushing the idea to nine other schools, including the University of Chicago Graduate School of Business and the University of Pennsylvania's Wharton School, where minority enrollments are 6% and 9%, respectively.

Another avenue: historically black colleges. More than 35% of all African Americans with college degrees graduate from these schools each year. "If I were a dean of a business school... I'd be trying to draw out and track top students from these schools," says Bernard J. Milano, executive director of the KPMG Foundation and head of the PhD Project, whose goal is to increase the number of minority professors in B-schools.

Since nearly all MBA candidates enroll after they have spent several years in a corporate job, it's no wonder the minority share of B-school classes is low. Harvard and Stanford University have both recently begun programs to encourage alums to scout out and mentor young minorities in their companies. B-schools also can work diversity into executive education and executive MBA programs that cater to senior-level managers.

By definition, B-schools and Corporate America are partners -- the corporate world supplies students to MBA programs and then hires back grads into its management ranks. Both need to work harder if the easy rhetoric about diversity is ever to become a reality.

Merritt covers management education from New York.

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