Ratings, just as they are in television, are the name of the game in business schools.
Instead of determining the price of a 60-second commercial, an institution's rating determines - or at least strongly influences - the number of applications it will receive from recruiters, and the number of dollars its graduates will receive from employers now and perhaps for the rest of their lives.
The annual survey of graduate business schools most eagerly awaited and at the same time critized is done by MBA magazine, a trade publication whose subscribers hold advanced business degreese. It is based on a poll of the deans of the country's leading business schools.
Last December the results showed that deans representing 65 per cent of the nationally accredited graduate B-schools rated Standard University number one academically. By a "wide margin" it was judged to have the best MBA program in the United States. Second came Harvard, closely followed by the University of Chicago. Massachusetts Institute of Technology's Alfred P. Sloan School of Management moved into fourth place from ninth the previous year.
The University of Pennsylvania's Wharton School ranked fifth, followed by Carnegie-Mellon University, which slipped down two notches last year. Rounding out the top 10 were Northwestern, UCLA. Darymouth, and the University of Michigan.
Corn was voted the most improved school of the year; the University of Virginia placed seventh on the list. In the Norteastern region, the University of Maryland ranked fifth.
Critics of the MBA survey, including the deans, complain that academics are asked to give an opinion of schools they don't know. John Day, dean of Purdue's Krannert Graduate School of Management, wrote, "There is no doubt that what we are rating is a combination of longevity (the older schools traditionally get more recognition), halo effect, impression and gossip, all of which have very little to do with the quality of the institution."
Yet, since no quantitive method of comparison exists, the MBA deans' poll is deemed the most authoritative. (In fact, pools by others have shown similar results.) In past years the magazine also polled its readers, but dropped that survey in 1977 because it found their opinions increasingly morrored those of the deans.
In the first survey in 1974, MBA rated Harvard number one academically, later dropping it to second. Yet deans, grads and recruiters have consistently voted that Harvard carries the most weighted in the job market. This double rating system - and the resulthing lack of a clear cut winner - led MBA magazine to limit its last survey to the best academically period.
"Being number one takes the rpessure off students, but people don't think about it a lot," said Bradley Graham, Stanford '78. At Harvard, even though they say they don't, they do. Some simply refuse to believe they're number two. Margaret E. Macallan, 21, of Aberdeen, Scotland, declared, "Harvard is the only name recognized in Europe."
James L. Heskett, chairman of the MBA program, said he would not be surprised if several schools rated above Harvard because deqns give ratings on the basis of published research, and Harvard has always emphasized teaching at the expense of research. "Had we never been number one, we wouldn't be taken aback by being number two," he said."Still, it forces you to ask yourself. 'Should we be emphasizing generalists? Is the case method still the best preparation?'"
Heskett added that Harvard is prepared to continue marching to the beat of a different its way is right. Nevertheless, whether because of or despite this attitude, Heskett admitted as he hurried away to a fund-raiser, that being number two is the number on topic among alumni.
Harvard's way has always been, in the best gentleman scholar tradition, to turn out general managers: people who can think, well-rounded individuals who can be expected to rise to the top of the corporation. The forecast becomes self-fulfilling because Harvard is the alma mater of more top business executives (7 per cent) than any other university, according to a 1976 Standard & Poor survey of 74,000 leading businessmen.
The generalist approach, also practiced at Stanford and Chicago, was adopted by the American Assembly of Collegiate Schools of Business after a 1959 Ford Foundation-Carnegie Corp. report accused MBAs of being little more than talking computers. There are some educators who now feel that, given the large number of MBAs being turned lut, there is again need for specialization.
The AACSB two years ago acknowledged the need to train managers for government agencies and non-profit organizations like hospitals and schools. Some B-schools now offer instruction geared to management of museums, sports enterprises, public utilities and small business. Changing societal values and increaseing interdependency between business, government and community have led to introduction of courses like management of human resources, the corporation and society, human behavior in organization, business and the changing environment, and labour relations law and legislation.
Innovative methods of teaching, frequently involving direct campus community contact, are gaining slowly. Business executives leave the boardroom for the classroom for a day or a semester as student or professor. University of Southern California students act as consultants to small businesses needing assistance. Texas Christian University's Graduate School of Business had a $500,000 grant to develop student's ability to invest corporate capital.
Classroom or lab techniques include lecture, seminar, thesis, economic model building and games, computer forecasting by linear progression, and problem solving via the case method. Back in the 1920s Harvard developed the case method, now used by many other schools. It consists of using real life dramas from the corporate world to locate and try to solve problems. For example, a class might be asked to study reinvestment alternatives for a recently nationalized European manufacturer, or production at a small New England bobbin factory, or the labour situation at The Washington Post.
About 800 cases are analyzed during a student's two years at Harvard. Each case requires a thorough researching by faculty and staff, at an average cost of $4,000 each. Companies must grant permission (some request anonymity) for their woes to be aired in the classroom. Though they receive no compensation, their executives on occasion attend class to benefit from free counseling offered by students. Both groups soon learn there is no single solution, no "right answer" to the problem, only trade-offs.
At Harvard the pace in a second-year class called The Operating Manager is rapid but orderly. The atmosphere is competitive but friendly, the analysis articulate and authoritative. Students may spend up to 20 hours a week preparing a case, knowing there is a good chance the Prof. W. Earl Sasser Jr. will point to one of them and say, "What would you do in this situation, Bob?" Sixty per cent of an MBA's grade depends on classroom participation.
On the contrary, in a first year retail marketing class the tempo is sluggish as a long-winded department store president extolls the virtues of his company. A few desultory questions later, a student pipes up. "You haven't mentioned any problems. I'm leery of interviewing with a company that doesn't have problems because I could only cause problems."
At Manhattan-based Pace University's MBA sessions, there are a few more gray heads and pot bellies. As conditioning for his seminar in executive management Prof. James Clemence gives students a subarctic survival test to assess their ability to reason as a team. (This time there is a right answer: matches are the most important (item.) Toward the end of the session there is a free-for-all with phrases like "dynamics of oligopoly, predatory price practices, potential lose-lose position," being hurled around the room.
Since everyone is currenly employed, cases are often based on their own companies. They discuss the merits of each otehr's firms, always mindful of proprietary information should a competitor be in the room.
Apart from cirricula and method changes, attitudes have also been affected. The business world's perception of academe in recent years has shifted considerably; the B-school's impression of commerce, much less.
During the 1960s, Michael Mescon, chairman of the department of management, Georgia State University College of Business Administratio, became concerned by what he perceived as "the disdain for business frequently found in the academic environment and the depicting of the businessman as a vulgar purveyor of goods.
He founded the Chair of Free Enterprise, an avowedly evangelistic mission to convince students it's no sin to make a profit. Since then some 30 univesities and colleges (none of the top 15, though) have Chairs of Free Enterprise, largely supported by corporate donations. Today the list of business sponsored campus organizations and activities is endless.
The success of these public relations gestures in assuaging anti-business attitudes on the general compus is at best conjectural. What is certain is that corporte donations have greatly increased in the past few years.
Yet B-school students were never anti-business radicals. An atheist after all doesn't go to parochial school. At the height of the counter culture movement, no more than a fifth of Stanford MBAs set their sights on alternative enterprises; today about 10 per cent go into a small business. At Stanford required reading includes Ralp Nader as well as Miltin Friedman. They do a paper entitled, "Whither Business: How to Get Out of the Doghouse."
"We're being taught by economics," said Bradley Graham. "They present a clean way of structuring a problem, so that something looks good from an economic viewpoint, even though it may run counter to popular feeling." Thus, he recalled, more that a few classmates said they would have make questionable payments in the Lockheed Aircraft case. All but two out of 20 decided that a drug company should fight the Food and Drug Administration rather than voluntarily remove its major product from the market on the basis of unfavorable preliminary evidence.
Harvard doesn't have a business ethics course per se. One dean scoffed at the idea of teaching B-students ethics; one might as well teach a cat hygiene. Yet another, Prof. Heskett, said several new cases had been written with this emphasis.
Despite these variations, the main theme of business schools remain what it has always been : preparing the future managers of large, profit-making corporations. How well is business being taught in graduate schools today? How relevant is te education?
Talks with faculty and students at three universities, graduat MBAs and corporate executives reveal mixed opinions, although there is a strong underlying tone of approval.
For Dave Huber, 33, an IBM marketing manager for the past eight years and new a student in Pace's executive MBA course, the correlation is direct. "Things I learn Friday (in school), I can use Monday (on the job)." For classmate Harry Mayo, 38, a systems manager for International Paper Co., the give and take between professors drawn from business and students who have been manages for six or eight years themselves does reflect the real world.
Bert K. Fulitzer, president of his own men's wear manufacturing firm in the New York area, put a monetary value on his MBA training. "I paid a consultant $15,000 for six weeks' work and didn't get that much out of him. Here it's incredible. I'm way ahead of the consultant. It would take five years and over $100,000 to get as much as I'm getting now.
tose looking further than next Monday tend to be more reflective. Jeffrey A. Lider, 22, of Chappaqua, N.Y., who worked as tennis pro and musician after Amherst and before Harvard, called MBA training "too idealistic, with a lack of skepticism that is found in the real world." Russell Ramsland, 25, of Midland, Tex., Harvard '79, called MBA training too idealistic. "We're solving problems that are too big, problems that become much bigger than they deserve," Donald Roberts, director of MBA program admininstratio, disagreed saying, "We're the pragmatists; the ideologues are across the (Charles) river" (at the main Harvard campus).
B-schools have a white knight complex - the bright young MBA is always called upon in class to turn a comapany aroung, never to liquidate it. He learns to hire, not fire. Or, as Stanford's Graham, 25, who worked as a journalist after graduating from Yale, put it: "B-school is very god at teaching you how to read financial pages, but it doesn't teach you creativity, or the guts youneed out there."
NEXT: How much is an MBA worth?