The MBA class of 2003 missed out on the cozy and confident academic experience that its predecessors enjoyed in the late 1990s. Many of this year's graduates arrived at B-school just before or after September 11, 2001, an event that worsened an already shaky job market. Corporate scandals such as those at Enron, WorldCom, and Arthur Andersen added injury to insult.
Despite the hostile economy, though, MBAs have kept their chins up. In fact, the 2003 Global MBA Survey of some 4,100 grads by the nonprofit Graduate Management Admissions Council found that 67% of this year's graduates rate the overall value of their MBA as outstanding or excellent, up from 60% in 2001.
The fourth-annual GMAC survey of students from 95 B-schools -- including such heavyweights as Duke, the University of Pennsylvania, IESE Business School in Barcelona, and London Business School -- asked students to rate their satisfaction with their business degrees across a number of criteria. Some 47% of the students are from outside the U.S., 81% were enrolled in full-time MBA programs, and 68% are male.
HARDLY DESTITUTE. The tighter job market has made a big impression on the students surveyed: While 86% are extremely or very satisfied with their personal improvement during B-school, just 39% feel the same way about MBA job security at the moment. Some 62% are satisfied with their post-MBA earnings power, and 65% with their preparation to get a good job -- down from 76% for both questions in 2001. When asked to rate different aspects of the program they attended, students awarded the lowest marks to career services, with only 8% of respondents calling their school's career center outstanding.
This year's batch of graduates is hardly destitute. The MBAs -- including those with jobs and those still looking -- expect to rake in 50% more money than they did in their last job before B-school. Median post-MBA salaries this year are highest for grads of European and U.S. B-schools -- at $75,000 plus $10,000 in signing bonuses. Canadian MBAs, on the other hand, expect to earn a median $50,000 with their degree.
Even so, the latest grads seem more attuned to the financial burden of getting a business education. According to the survey, women place more weight than men do on the cost of an MBA when deciding which school to attend. That shows up in numerous MBA studies and should remind B-schools that rising tuition could drive away women, whose participation in MBA programs has stagnated at 30% for a decade.
MORE ETHICS NEEDED. "If a woman is interested in an MBA but sees a high cost and a lower return on investment because of the job market, it isn't going to stop her from attending B-school, but it will make her look at the alternatives," says Jeanne Wilt, assistant dean of admissions and career development at Michigan Business School. Those might include attending a part-time program or looking for cheaper schools.
Not surprisingly, ethics has hit the radar of 2003 grads. According to the survey, 78% of students agree that recent corporate scandals have "created an atmosphere of distrust of corporations," and 28% say scandals have "negatively impacted the perception of MBAs." Interestingly, though, grads of full-time programs are "significantly more likely than those in other programs to seek post-MBA employment in the finance/accounting industry, the industry most affected by scandal," according to the survey.
Only 9% of MBAs said ethics was incorporated "extremely effectively" in their MBA class work. Exposure to ethics varies from school to school, by region of the world, and by concentration. European B-schools discuss ethics the most, with 56% of students saying they heard guest speakers on the subject and 51% completing required ethics courses. Only 32% of part-time MBAs rate their schools' lessons in doing-the-right-thing as extremely effective or very effective, vs. 49% of students who attended executive MBA programs. Overall, 50% of the 2003 MBAs surveyed say they'll think more critically than they would have before B-school about a company's ethical culture before applying for a job.
"AS IMPORTANT AS FINANCE." Even though ethics has become a topic du jour of the past two years, B-schools haven't altered their curriculums to deal with the issue. "We haven't seen a substantial change that has had any staying power at business schools," says David Wilson, CEO and president of GMAC. "If business schools are going to get into [teaching] ethics, it has to be embedded throughout the curriculum in every course they teach."
Some U.S. schools are at last taking the hint. On May 30, Columbia Business School launched the Sanford Bernstein & Co. Center for Leadership & Ethics. This fall, it will support the B-school's initiative to add a required, year-long ethics course. "There had always been those in the school who thought that we were deficient by not having any courses in business ethics," says Ray Horton, chair of the management division at Columbia Business School. "We came to the realization that [ethics] is just as important as finance."
Another insight from GMAC's data is the importance students place -- or should place -- on their classmates and professors. When asked to rate the quality of various aspects of their programs, 29% of the respondents rated their classmates outstanding, and 27% rated their faculty the same. "Make sure that the person sitting next to you in class is your peer, or better," says Wilson. Otherwise, "why waste your time and money?"
LONG-TERM THINKING. About half of the MBAs graduating this year are using their degree to switch careers. Overall, the most popular MBA concentrations in 2003 were finance (chosen by 41% of respondents), marketing (24%), and strategy (13%). Just 2% of grads focused on technology during their schooling.
If survey underlines anything, it's that an MBA has lost some of its cachet as a ticket to riches and corporate fame. "The irrational exuberance of the 1990s wasn't credible then, and it isn't credible now," says Wilson.
Yet, it also seems that B-schools have taught their students one lesson well: to look at the long-term benefits of whatever they do rather than at the short-term results. In that regard, the class of 2003 should do just fine. And if schools also teach MBAs to do good while doing well, then everyone stands to gain. By Mica Schneider in London