Jewish World Review April 16, 2001 / 23 Nissan, 5761
Des Dearlove and Stuart Crainer
http://www.jewishworldreview.com -- IN his college football days, Patrick Harker played defensive tackle for the Penn Quakers. Last spring, when he became dean of the Wharton School at the University of Pennsylvania, he faced a different defensive challenge - trying to block MBA students from rushing out the door for dot-coms.
A record 25 students in the class of 2000 didn't come back for their last year because of job opportunities at Internet start-ups.
For schools like Wharton, the last few years have been a whirlwind. Students in droves tuned in to the Internet revolution, turned on to the dream of dot-com riches - and then dropped out to start their own companies.
The urgency of the new technology-driven economy even called into question the relevance of the traditional MBA. Applications fell dramatically: They were down at 27 percent of full-time MBA programs in 1999 and at 44 percent in 2000, according to the Graduate Management Admissions Council. That was then. With the recent Nasdaq plunge, students are staying in school and once again flocking to traditional employers. And early indicators point to a surge in people applying to business schools to ride out the economic slowdown. The number of people taking the Graduate Management Admissions Test, required to get into business school, was up 7 percent in 2000 over the previous year, although the figures are still down from mid-1990s levels. Further up the pipeline, Kaplan, which helps students prepare for the GMAT, reports a 20 percent rise in enrollment for its prep classes over this time last year.
The big wave, if it's coming, hasn't hit yet, but the tide appears to have turned in favor of b-schools.
Institutions that suffered a drought during the past few years say that the number of applications is rising. Applications to the Boston University School of Management are up 70 percent over this time last year. Across the Atlantic, London Business School reports a 20 percent increase in applications this year - after being down about 10 percent last year. And a similar upswing at the Haas School of Business at the University of California-Berkeley, where the number of full-time MBA applications fell 15 percent between 1999 and 2000, suggests the downward trend may have bottomed out.
"The decline in applications in 1999 and 2000 coincided with the dot-com boom," says Jay Lowsky, associate dean of the MBA program. "The apparent end of that decline coincides with the dot-com bust."
The dot-com era has been good medicine for b-schools. It dispelled decades of complacency and prodded schools out of their technological torpor. "The new economy has had a profound impact on the top MBA programs," says Joseph White, dean of the University of Michigan Business School.
The courses at top MBA schools have been overhauled to reflect the changed landscape. New-economy case studies are now de rigueur, and the number of specialized classes in high-tech, e-business and telecom is growing. Harvard Business School now offers 32 electives in these areas; Wharton has 37 courses in its e-commerce track; and MIT's Sloan School of Management offers 43 new-economy courses.
"Everyone in corporate America has an Internet strategy," says Phil Anderson, associate professor at the Tuck School of Business at Dartmouth. "MBAs have to learn how to operate in a connected world."
In their efforts to keep up with the accelerating pace of change, many schools are shortening the development cycle of classes in cutting-edge subjects. The old curriculum was geared to the slower rhythms of the old economy, and content gathered dust as it was recycled year after year. Today's MBA students don't want to pay for ancient history lessons. One-third of Harvard's case studies are newly written each year, often gathered from its California Research Center in Menlo Park. In August, Wharton will break ground on Wharton West, a case-study research center and executive MBA campus close to Silicon Valley.
The b-school curriculum has also grown much more entrepreneurial, reflecting the deep impact the last wave of Internet start-ups had on the business world. Last year, Harvard changed the title of one of its mandatory first-year courses from "General Management" to "The Entrepreneurial Manager." London Business School reports that 90 percent of its MBA students now take at least one entrepreneurial elective.
Keeping up with rapid change is nothing new for b-schools. Business education as we know it can be traced back to the founding of the Wharton School in 1881. The titans of the industrial revolution elevated management to a science to produce the next generation of business leaders. The science reached its peak in the 1960s and 1970s, when "strategic planning" swept through corporate America. As business fashions changed, schools changed with them, churning out managers who spoke the right language for the times.
The latest transformation is nearly complete. Sanity may have returned to
business schools, but there's no going back to the way things were before
the Internet. The dot-com meltdown has shown companies that the
embattled new economy urgently needs leaders trained in old-economy
fundamentals such as cash flow, return on investment - and profits. For
their part, b-schools say they are ready to answer the