Articles from Bloomberg

Why B-Schools Struggle to Enroll More Women

Today, women are almost as likely as men to fill the seats of medical school and law school classrooms. Yet the share of women enrolled in MBA programs hasn’t risen above 37.2 percent in the past decade, according to the more than 100 schools providing full-time MBA enrollment figures in surveys by AACSB International, an accrediting organization. “There’s a frustration on the part of a lot of women, and probably men, too, that we haven’t made more progress,” says Amy Hillman, the dean at Arizona State University’s W.P. Carey School of Business. In August the White House convened 150 leaders from top business schools and had them sign a pledge to take steps to boost female enrollment by cultivating potential applicants early on in their education and by offering more financial aid. “When business schools are missing out on a large share of female college graduates, they are missing out on an extremely large share of the top qualified college graduates,” says Betsey Stevenson, a University of Michigan economist who served on President Obama’s Council of Economic Advisers and helped lead the August summit. “If they want to continue to be a relevant part of the training in the 21st century, they are going to have to make changes that will make them more attractive to women.” Deans say business schools suffer from a unique timing problem. Unlike law and medical schools, which tend to enroll students soon after they finish college, the full-time MBA program is designed for people who’ve already proved themselves professionally. Elite B-schools typically prefer that applicants have about five years of work experience, which means the average MBA student is 30 years old at graduation, Bloomberg data show. Women in their late 20s who...

Silicon Valley May Want MBAs More Than Wall Street Does...

PayPal co-founder Peter Thiel said MBAs are predisposed to “herdlike thinking and behavior.” Venture capitalist Marc Andreessen dubbed them a contrarian indicator, saying “if they want to go into tech, that means a bubble is forming.” In a post on the question-and-answer website Quora, Facebook Chief Operating Officer Sheryl Sandberg, who earned an MBA from Harvard in 1995, said that while she got “great value” from her experience, she wasn’t ready to recommend the degree to the country’s future tech stars. “MBAs are not necessary at Facebook and I don’t believe they are important for working in the tech industry,” Sandberg wrote. Silicon Valley’s trash talking of the MBA obscures the reality that U.S. tech companies are hiring B-school grads in ever-larger numbers. Business schools sent 16 percent of their 2015 graduates into technology jobs, according to a Bloomberg Businessweek survey of students who’d accepted offers by that spring, making it the No. 3 industry for MBA grads after finance and consulting. By one measure, Silicon Valley values MBAs more than Wall Street does. In 2015 tech companies paid business school graduates more than financial companies did, according to Businessweek’s poll of more than 9,000 MBAs. “If I said all people with a law degree are worthless, what would you say?” says Rich Lyons, dean at the University of California at Berkeley’s Haas School of Business. Forty-three percent of its 2015 class went into tech, according to the survey. “It’s such an unwarranted generalization. Firms wouldn’t keep coming back to hire our MBAs if it wasn’t a valuable skill set.” Amazon.com, Microsoft, Google, and IBM were among the 15 companies that hired the most MBAs in 2015, according to data reported by 103 business schools to Businessweek, proof that while...

Why Consulting Is a Revolving Door for MBAs

Of all the industries MBAs could end up in, the largest single chunk of them flock to one: consulting. But Bloomberg data show that they’re not likely to stick with it. Even though consulting is the most popular of the three industries that claimed the majority of business school graduates this spring (financial services and technology are the other two), it’s also the one MBAs are most likely to move on from a few years later. For its 2015 ranking of business schools, Bloomberg surveyed more than 12,700 alumni of full-time MBA programs and found that only 37 percent of those who had gone into consulting after graduation were still working in the field six to eight years later. That’s the lowest retention rate of any industry in the survey. Finance and tech jobs had a comparatively better hold on B-schoolers: 73 percent of students who graduated into finance jobs stayed in finance, and 72 percent of grads who got technology jobs did so. “Consulting firms know that the young talent they work so hard to lure in with all the perks and travel and flexibility will probably leave sooner rather than later,” said Tony Carnevale, director of the Georgetown University Center on Education & the Workforce. “It’s not a world anymore where the employers are going to take care of you. Everyone is a free agent today.” The fact that MBAs seem to treat consulting as a strategic but short-term stop on their career journey isn’t necessarily hurting the industry. In fact, unless an employee is on track to become a partner, she may be more beneficial to the firm when she leaves. “Many consulting firms have resources in place to help individuals make transitions and keep extremely...

The Companies That Pay MBAs the Most

Business school is a profitable investment for almost anyone, but some MBAs are getting more dollar value out of their degrees than others. MBAs who worked in financial services several years out of school earned more than their peers in every other industry, and the best paychecks overall were doled out by investment banking firm Morgan Stanley, a Bloomberg survey of thousands of B-School alumni showed. As part of our annual ranking of business schools, Bloomberg surveyed 12,773 professionals six to eight years after they graduated from business school. The MBAs who work at Morgan Stanley took home the largest compensation packages, followed closely by alums at Goldman Sachs. We asked alumni who graduated from 2007 through 2009 about their current employer, base salary, and bonus. To figure out who pays the most, we focused on companies where we polled at least 20 MBAs. Graduates working in finance–which includes people in accounting and banking–took home a median $210,000. Real estate and energy were the next most lucrative industries. Perhaps the unlikeliest leader of the pack was agriculture, where MBAs made a median of $180,000—as much as they earned in consulting. (About 46 percent of the alumni we surveyed went into finance, tech, or consulting, while 8.5 percent worked in energy, real estate, or agriculture.) The companies that paid MBAs the most hailed mainly from the professions that have long been catnip for MBAs. Five of the 10 companies that paid MBAs the most were financial businesses and three were consulting firms. The only Silicon Valley representatives that made their way into the top 10 were Google and Apple. Even at those tech giants, MBAs earned 36 percent less than their peers at Morgan Stanley, mainly because they hauled in...

Oxford Business Dean: MBA Programs Should Be More Than Driving Schools...

To some degree, MBA programs are advanced driving schools. We teach students how to operate one of the most powerful engines in the world: business. We teach how this engine must be finely engineered (operations), how it needs special fuel (finance), and how the parts need to work together (organization and leadership). We teach how to monitor the gauges carefully (accounting), how to steer our vehicles at high speeds and through rough weather (strategy). Extending the metaphor, we have, in recent years, updated our curricula with modules on “Why do we drive?”—an existential question answered by legal principles such as fiduciary duties, philosophy, social norms, and even faith-based traditions like Catholic social theory. Why drives the recognition that businesses have responsibilities not only to shareholders but also to customers, employees, the communities in which they operate, and future generations. This discussion is healthy and overdue. To torture the metaphor just a bit more, we’re missing one step: Exactly where should our graduates head? Business schools have been largely agnostic on this question. Our failure to address where has subverted the evaluation of business schools and the content of our programs. Salary and salary growth, to a large degree, are key factors determining where MBA programs find themselves on various rankings by publications. Implicitly, this approach dictates where: Send your graduates to the highest-paying jobs… Read full story:...

These Are the Students Good Enough to Turn Down Harvard Business School...

Who in their right mind would get accepted to Harvard Business School and turn it down? Turns out the answer is: someone who also got into Stanford. It’s a nice problem to have: You’ve been admitted to two or more MBA programs and can only choose one. As you weigh a host of factors, you might be curious about the decisions of recent students who faced the same set of school choices as you. Using data from students who answered a survey for Bloomberg Businessweek’s 2014 MBA rankings (about half of all 2014 graduates at ranked schools), we’ve identified MBAs admitted to specific pairs of top programs and tried to make sense of where they ended up. What we can’t glean from this: insight into financial aid packages, location preferences, or any other factors that might drive an applicant’s choice. Still, few things are a purer indicator of which school is truly most desirable than where the most sought-after MBAs—the ones with their pick of highly selective schools—chose to go. Duke (Fuqua) vs. Michigan (Ross): 128 students admitted to both programs Despite Fuqua’s claim to the top spot in Bloomberg Businessweek’s 2014 Full-Time MBA rankings, the University of Michigan’s Ross School of Business, ranked ninth and situated far from sunny North Carolina, claims more than twice as many applicants who get into both schools. Thirty-seven percent of students admitted to Fuqua and Ross select another program altogether. Chicago (Booth) vs. Northwestern (Kellogg): 113 students Hometown rivals Booth and Kellogg have both been No. 1 in Bloomberg Businessweek’s MBA rankings at various points over the years, despite different reputations and strength areas. Booth is known for rigorous focus on quantitative skills, while Kellogg touts its powerhouse marketing faculty. When admitted...