Back to B-School

Over the weekend, I had a chance to check out the recent CNBC program Warren Buffett and Bill Gates: Keeping America Great, which documented the pair’s recent appearance at Columbia Business School.

In a town-hall style meeting, Gates and Buffett fielded questions from Columbia MBA students. Not surprisingly, many of them asked two of planet’s most successful people for career advice. Among Gates and Buffett’s responses:

• Buffett advised students to put passion ahead of perceived financial gain when considering a career path.
• Gates told them to stay inquisitive and keep up with research on their topics of interest.
• Gates also helped students identify sectors in the U.S. economy that are continuing to grow, including information technology, health care and clean energy.

Buffett and Gates also shared their optimism about the future of the U.S. and our economic system. When moderator Becky Quick asked if there was ever a time that the pair had doubts about capitalism or America’s way of life, Buffett responded, “This country works, we’ve got 200 years of proof, and it’s going to continue to work.”

Gates added, “We have a complex financial system, and we’ve proven that we can make mistakes, but more fundamental than that is the innovation, the fact that you can create new companies, that people are willing to take risks and invest.”

Even in the fall of 2008 when the financial meltdown was at its peak, Gates said that there were “inventions that took place; even in our darkest hour, people were working on new drugs, new chips, new robots and things that will make life better for everyone in the decades ahead.”

This year, fewer new Harvard Business School graduates took jobs on Wall Street, which may seem on the surface like a bad market indicator. But this is actually a positive signal, according to Ray Soifer.

In case you missed it, The New York Times reported that Soifer, a Harvard MBA and founder of Soifer Consulting, released his 2009 Harvard MBA Indicator, which draws its conclusions from looking at the jobs taken by each year’s Harvard MBA graduates. When too many end up with Wall Street jobs, Soifer says, this indicates that the market could be getting too hot and is therefore heading for a fall.

The Times explains: (more…)

A question for all of you MBAs reading this: remember how great it felt when you finished the GMAT test? After you got into an MBA program, you probably never thought about the test again.

So how would you feel if you had to re-take the GMAT… after receiving your MBA acceptance letter?

That is exactly the situation some new MBA students are finding themselves in as their schools advise them to retake the GMAT to better position themselves with job recruiters.

As BusinessWeek recently reported, “For a select group of companies, mostly top consulting, finance and banking firms, employers routinely look to MBA graduates’ GMAT scores as a reliable standard measurement of academic prowess.” (more…)

This post has been updated since it was originally posted.

You’d like to think that even under pressure, your moral compass would keep you from doing anything unethical at work. Only unscrupulous types get caught up in things like backdating stock options and peddling subprime mortgages — right? But Babson College scholar Mary Gentile says acting ethically isn’t as easy as wanting to do the right thing; it’s about knowing how to do the right thing even when the stakes are high. Practice helps.

More than 80 business schools around the world are pilot testing a new approach to teaching ethics developed by Gentile, along with the Aspen Institute and Yale School of Management. The idea is simple: Teach MBAs to anticipate how they will be tempted to rationalize unethical behavior, and get them to practice countering the impulse. The goal: to make ethical choices come naturally, even in difficult situations.

Here are three case studies from the curriculum that are based on real-life dilemmas. In each case, the real subject successfully managed both the ethical issue and the internal politics. Vote for how you would handle each one and then click below for the real-life answer.

Situation #1:

You’re a rising executive just promoted to corporate controller. Shortly after you land the new job, several senior executives pressure you to distort the company’s restructuring charges in a way that would be misleading but not criminal.

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Situation #2:

You join a nonprofit firm in a junior accounting role. As you review the year’s corporate donations, you quickly realize that no standard procedure exists to determine the value of in-kind donations (gifts in the form of goods or services rather than cash). Some of your most prolific donors inflate valuations to deceive the IRS. Your overworked executive director makes a point of emphasizing relationships above data.

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Situation #3:

You’re a junior employee at a large investment bank. Hours before a client meeting, a portfolio manager tells you to review the portfolio of one of the bank’s smallest customers and find a new benchmark that will make it look like the portfolio had performed better than it really had. You know that the client remains with the bank as a favor to a friend who works there.

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Click to the next page to find out what really happened in each scenario.

I’ve come to the conclusion that the bloggers at the Huffington Post aren’t big fans of b-school. This summer, a post referred to b-school graduates as “menaces,” and more recently, in his post “Why B-schools Don’t Change,” Pablo Triana attests that despite talk of revamping, b-schools remain unchanged because:

1) In many cases, the negative aspects of inexperienced professors and theoretical dominance are conveniently ignored by both students and recruiters, thus effectively becoming harmless; 2) The positive aspects presented by (good) schools continue to be attractive enough to compensate for the disappointments.

Triana’s second point is valid. Despite the finger-pointing b-schools have endured for producing flawed leaders, a large number of business aspirants still see the b-school brand as a desirable one, and many are waiting out the financial crisis in b-school classrooms. According to a recent article in BusinessWeek, many of the top b-schools admitted their largest classes ever this fall.

It’s his first point, then, that deserves closer scrutiny. Triana is certainly not the first to criticize b-schools for focusing too heavily on theory instead of real-world practical business knowledge, and this is a discussion that needs to had both inside and outside of business schools. (more…)

Don’t talk to Ray Fisman, a professor and newly-appointed director of the Social Enterprise Program at Columbia Business School, about doing well by doing good — as I did during our recent conversation. He will quickly explain why the phrase is one of his biggest pet peeves:

“There is no shortage of inspiring examples of companies who have made money and done good for the world, but I wouldn’t want to frame it as a generalized principle. There are also companies that have made enormous sums of money by not doing good. I think suggesting that good citizenship is always a win-win can be dangerously misleading.”

However, don’t take this to mean Fisman would discourage anyone from pursuing social enterprise, which he describes as the place where “management practice meets social concerns. That incorporates managing non-profit organizations more effectively and infusing for-profits with a greater sense of corporate citizenship.”

Rather, he thinks that businesses should go into social enterprise with a clear assessment of the endeavor. Fisman says the Columbia Enterprise Program aims to create leadership in this domain and teaches future social entrepreneurs through case studies, experiential learning and guest practitioners who “enrich the exchange of ideas in the area of social enterprise.” (more…)

In case you missed it, BNET recently ran a comprehensive feature about online MBA programs. A few months ago, I weighed in on this myself when plans were announced for the launch of the online Jack Welch Institute.

The big draw for online MBAs is convenience. A middle manager who wants to keep her job and keep her family rooted would be a great candidate for an online program. She could receive the information needed to advance her career sitting at her computer just as she would taking notes in a classroom — provided, of course, that she gets her MBA through an accredited online program. (more…)

A few weeks ago, I interviewed workforce development expert Nancy Ahlrichs about tips for managing Generations X and Y. Perhaps Jeremy Short, a professor at Rawls College of Business at Texas Tech University, would have liked to add one more idea to Ahlrichs’ points about coaching younger workers and giving them more learning opportunities: keep them entertained.  At least, this seems to be the principle behind Short’s case study that he wrote as a graphic novel.

Published earlier this summer, “iPremier (A): Denial of Service Attack” is the first Harvard Business case to embrace the graphic novel format. (For those of you not sure what a graphic novel is, think comic book with a meatier story line.) Short adapted the case from an earlier study by Robert Austin, a faculty member at Harvard Business School.

The “iPremier” case details an IT security crisis and tackles issues such as “risk management, preparation for crises, management of crises, computer security and public disclosure of security risks,” according to a Texas Tech press release. (more…)

You go to a restaurant and decide to have a glass of pinot with your meal. You look at the wine list and haven’t heard of any of the choices, so you assume the one with the highest price is the best glass. But the question remains: will you buy it?

According to new Cornell research, “A positive perception of a product based on its higher price doesn’t automatically translate into a decision to buy it.”

The research was conducted by Ori Heffetz, an assistant professor of economics at Cornell’s Johnson Graduate School of Management, and Moses Shayo of the Hebrew University of Jerusalem.

In order to determine the extent to which price influences consumers’ attitudes toward a product, the researchers conducted experiments with differently priced foods. A few of the findings: (more…)

In his new book The Management Myth, author Matthew Stewart takes a critical look at the management industry, from the business gurus who write best-selling books to the consulting industry to a subject near to me and to many of you, MBA programs.

What exactly is the management myth? As Stewart explained during our recent interview, it’s “the idea that there is a body of technological expertise, something like engineering, that is called management, that you can package up, put into a textbook and transmit to students. There are some techniques and crafts associated with management, but the idea that there’s a single body of knowledge that you can turn into formal expertise is false. ”

Problems with MBAs

Stewart sees a problem with the sheer number of MBA degrees, about 140,000, awarded each year. “It makes sense to have a certain number of people study business-related subjects, but now it’s a universal credential for doing business at a certain level. We have a serious problem with credentialism getting out of hand,” he says. (more…)