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They have their eye on cushy conference rooms and arching marble stairways. They envision leather armchairs and standard-issue BlackBerries. But these undergrad business students aren't eagerly eyeing the stately corporate headquarters they hope to be working at after they finish their undergraduate business educations. They're merely coveting the rich facilities many schools are lavishing on the MBAs a few buildings over -- or even right down the hall.
The perceived inequality between undergrad and graduate business programs, even at the same institution, is a major gripe that appeared frequently in BusinessWeek's survey of undergraduate business majors. For instance, at the University of California, Berkeley, undergrads complain they aren't eligible for counseling at their program's state-of-the-art career-services center. At Cornell, students says they're packed into crowded classrooms. At some schools, the student-to-professor ratio is about 40 to 1, while at many MBA programs it's better than half that.
MBA BAIT. B-school officials, by and large, don't deny that the undergrads have a point, blaming a complex set of factors, ranging from the economics of the schools themselves to the pressure to score well in the various B-school rankings that prospective MBAs consider hugely important.
"When you're dealing with 17- and 18-year-olds and 28-year-olds, you're talking about a real difference in perception," says Audrey Morgan, the director of Indiana University's Kelley School of Business undergraduate program, talking about the school's decision to spend $33 million on a state-of-the-art, 200,000-square-foot facility for its MBAs. "It was obviously an effort to attract people who might not necessarily go to Indiana for graduate school."
One big reason for the disparity is simple economics. Established MBA students generally have higher expectations -- and higher tuition bills -- than their young adult counterparts. In 2004-05, the average fees and tuition at private undergrad programs were $21,565, compared with $36,280 at private MBA programs, according to the Association to Advance Collegiate Schools of Business (AACSB), which accredits nearly 500 business schools worldwide. The gap between public programs was similar. Therefore, MBAs are often first in line for facility upgrades or career-services perks.
INFLUENTIAL RANKINGS. Furthermore, many MBA programs are much smaller than their undergraduate siblings, making it easier to move them to a new facility or provide smaller classes. In 1999, MBA students at USC's Marshall School of Business received a posh new 55,000-square-foot facility with eight case study rooms and 13 high-tech classrooms. The undergrads are still waiting. "We have a 4,000-student undergrad program and a 1,500 grad student program," says Dean Thomas Gilligan. "We can't do all [the facility upgrades] simultaneously."
The MBA programs are also in line for more lavish gifts from wealthy donors, many of them MBA alumni. Another big share of the blame, at least say many schools deans, belongs to the rise of magazine surveys that rank MBA programs. The rankings -- including those done by BusinessWeek -- are hugely influential, affecting everything from alumni giving to faculty recruitment to the tenure of deans, say administrators at top programs (see BW Online, 8/5/05, "A Rank Offense to B-Schools").
To keep their rankings high, some deans say, they're forced to lavish resources on MBA programs, sometimes at the expense of undergraduates. "When BusinessWeek started calling MBAs business schools, it made everyone forget undergraduate business schools," says John Fernandes, president of the AACSB.
THE MISSING PROFESSOR. Whatever the reasons, undergrads, by and large, have to grin and bear it. At the more than 40 schools BusinessWeek surveyed, fewer than half the business majors who had internships got them with school help. At UC Berkeley's Haas School of Business, MBAs have a career-services center replete with self-assessment tests and special classes, while undergraduates use the university's centralized facility, which offers far fewer bells and whistles. Haas Associate Dean Andy Choving defends the separation, noting that undergraduate recruiters want access to students in all majors, but "when MBA recruiters are on campus, they're looking for MBAs."
Few would argue that undergrads and MBAs alike benefit from from small class sizes and top-notch faculty. But once again, because undergraduate business programs are often much larger than their schools' MBA programs -- especially at big, state universities -- packing lecture halls and using at least some teaching assistants is almost unavoidable.
In responding to our survey, 11% of the undergraduates at the University of Iowa, and 14% at Purdue, said their classes were taught by professors "never" or "sometimes" -- not particularly worrisome until compared with less than 2% at top-ranked Wharton and no teaching assistants used at all at third-ranked Notre Dame. At programs such as Auburn, Penn State, and the University of Florida, there are more than 40 students for every B-school professor, a ratio significantly higher than the corresponding MBA programs -- 13 to 1 at Florida, 29 to 1 at Auburn, and only 2 to 1 at Penn State. "It's difficult to get to know professors when you're constantly in classes with 300-plus people," says one student of Cornell's large introductory undergraduate classes.
SPLIT SCHOOLS. Edward McLaughlin, Cornell's undergraduate business program director, doesn't deny that some classes are big. "We have a number of lower division courses that are quite large," he says. "Part of the reason they have large enrollment in the first years is because we made a strategic decision to put more resources in upper division courses."
Not every program has to deal with this resources tug of war. The University of Virginia's undergraduate and graduate programs are housed in different schools, making it easier for the undergraduate program to raise funds and advocate for university resources.
Four years ago, following growth in its undergraduate program, ninth-ranked University of Texas-Austin's McCombs School of Business considered a similar arrangement but decided against it to maintain interaction between the two programs. Still, the undergrads aren't walking away empty-handed. By 2010, McCombs plans to hire 40 new faculty, 30 of them for undergraduates. "We're doing a quality play and not a quantity play," says Dean George Gau.
SPRUCING UP. Tradeoffs are fairly common. Cornell may have some very large lectures, but they're taught by the faculty's best and brightest, according to McLaughlin. "[They] are all master teachers who have proven over time that they can animate a classroom with 300 or 400 students." USC has recently added a new staff to support undergraduate business career services, a mentorship program that pairs undergrads with business executives in the community, and is drawing up structural plans for a new undergrad facility.
At Indiana, undergraduate classrooms are gradually being renovated, and plans are under way for a more substantial renovation. "We're developing drawings for the building now. These will be shared with several prospective major donors in late May/early June," says dean Daniel Smith. And next year, UC Berkeley will nearly double the number of introductory undergraduate business courses taught by tenured faculty.
All well and good -- for future classes. For the class of 2006, though, luxury is a perk that will have to wait until they hit it big -- or come back to get their MBAs.
Gerdes is a reporter for BusinessWeek in New York.
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