More B-Schools Choose Women as Deans

Story first reported from WSJ.com

Business school may still be a man's world, but institutions are looking to shake things up by placing female talent at the helm.

Eager to achieve—or at least approach—gender parity in their administrative ranks, many schools are "acting affirmatively" by picking women over similarly qualified men to fill deanship slots, says Lucy Apthorp Leske, a partner at search firm Witt/Kieffer. By doing so, schools hope to introduce more diverse opinions into their high-level decision-making. But whether these changes will make a difference long-term remains to be seen.

The dearth of women in deanships isn't unlike the current picture of women in chief executive roles—though, to be sure, it isn't quite as bleak.

Women constituted 18% of U.S. business-school deans in the 2011-2012 academic year, according to the Association to Advance Collegiate Schools of Business, an industry group. Meanwhile, women hold just 20 CEO spots at Fortune 500 companies, according to Catalyst, a nonprofit organization that supports women in business.

Lower down the ladder, women held nearly one-third of associate dean positions in the 2011-2012 academic year, compared with 20% a decade earlier. About one-fourth of deans used that position, overseeing curriculum or academic programs, as a launch pad to the top spot, according to a recent AACSB survey.

Schools are courting those up-and-comers aggressively. Alison Davis-Blake, dean of University of Michigan's Ross School of Business, began receiving inquiries from search firms while a senior associate dean at University of Texas, Austin's McCombs School of Business. She says she was contacted "to excess."

Some suggest that schools' eagerness to even out the ranks among deans is little more than a numbers play, since many women deans say that their gender has little impact on the way they actually lead their business schools on a day-to-day basis.

"In terms of strategic positioning and core tactical actions, I don't think those are really any different because of gender," says Ms. Davis-Blake. While some women faculty and administrators may be drawn to a particular school because there are other women at the top, she says it is likely just "on the margins."

Nevertheless, any top-tier dean—man or woman—holds sway in powerful business and policy circles. They often serve as directors of major companies, set the agenda for what tomorrow's corporate titans might learn and, in the wake of the financial crisis, are called upon to defend the very existence and value of their institutions.

Plus, having women in leadership positions can make a mark on a school's student body, a crucial asset as institutions look to close the gender gap among that population as well. (About one-third of M.B.A. students are women, according to estimates from Forté Foundation, a group that seeks to create gender parity in corporate leadership.)

The presence of women deans, just like the presence of women executives in the corporate world, "helps [students] to see the kind of things they can do and where they can go," says Linda Livingstone, dean of Pepperdine University's Graziadio School of Business and Management.

The intense demand for female deans has allowed prospects to be picky, wary of being added to shortlists just to serve as token representatives, says Kenneth Kring, co-managing director of the global education practice at Korn/Ferry International. (Korn/Ferry in recent years has helped place women deans at Ross, Northwestern University's Kellogg School of Management and University of Missouri's Robert J. Trulaske, Sr. College of Business.)

Some women turn down the position, fearing a blow to their work-life balance, since academic deanships can be just as demanding as a chief-executive role. Ms. Livingstone, who has a 16-year-old daughter, says the deanship put a "burden on [her] family as a whole" but she and her husband were "willing to align [their] lives to work that way."

Meanwhile, a handful of business schools, including those at Boston University and Wake Forest University, have turned to the corporate world—where women are even more of a rarity—to fill recent deanship openings. Both schools picked men.

Though Ohio State University's Fisher College of Business opted for a woman when it nabbed Johnson & Johnson executive Christine A. Poon for its dean in 2009, a broader shift toward tapping business executives in general could quash advancement opportunities for academic women already waiting in the wings. It may even hurt gender parity in academic leadership, since the pool of corporate candidates skews more heavily male.

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New Allure For Business Schools With Complex Additions

Bloomberg

In an effort to be one of the world’s most recognized schools for business, Yale’s School of Management stuffs its students and faculty into century-old buildings resting upon a rat-warren of basements. That is a distant level of learning atmosphere standards from Harvard Business School’s 33- building campus, which also supports a chapel and health club.

To get up to par on today's high class collegiate living standards, Yale has plans to build a $180 million structure to help attract and retain students against rival schools. The new allure is designed by Lord Norman Foster, who built London’s “Gherkin” tower, and the building is scheduled to open in 2013.

“You can’t be in a dump if everyone else is in a spectacular building,” Oster said.

Top business schools have a common approach of designing and constructing larger, more complex business campuses to recruit the most elite students and faculty, said Yale finance professor Matthew Spiegel. New learning facilities mean additional space for faculty as well as more classrooms and lecture halls for high-margin education programs that provided essential global cash flow. Additionally, higher capacity schools can also accept more students, who invest up to $80,000 per year in tuition, room and board and other expenses.

Even schools with less capacity are developing new standards in learning atmosphere as well as educational opportunities. A mid-size Michigan university, Ferris State, has begun heavy promotion of its Michigan MBA degrees, along with revamping many facilities around campus.

Business schools are dropping a pretty penny on top architects to create elaborate glass-and-steel structures, targeting all aspects of the campus from study rooms to cafeterias and health clubs.

“The better the experience people have, the better they feel about the place, the more likely it will be that they would support it at some point,” said dean of the University of Michigan’s Ross School of Business, in Ann Arbor, Robert Dolan. As a part of the trend, in 2009 the U of M business school opened a $145 million, 270,000-square foot building to help support their Masters of Business Administration program.

Shortly after the University of Pennsylvania's Wharton School unveiled its $140 million Jon M. Huntsman Hall in 2002, competing business schools have scrambled to keep pace.

In 2004, the University of Chicago opened its $125 million Harper Center, while Michigan’s building debuted last year. Opening new facilities are Massachusetts Institute of Technology’s Sloan School of Business, in Cambridge, Massachusetts, and Stanford University's Graduate School of Business, near Palo Alto, California.

Also in the development stages are New York's Columbia Business School and Northwestern University’s Kellogg School of Management, in Evanston, Illinois. Ramping up their IT capacity for an influx of digital learning needs for their new online MBA courses is Ferris State, in Michigan.

Harvard’s buildings, which started construction in 1927, rest on a beautiful perch along the Charles River across from the rest of the university. Harvard has added more to their campus building investments, such as a glass-and-concrete chapel, housing designed to support 400 visiting executives and a health club.

The new business school building at the University of Chicago is structured around a six-story, glass-and-steel atrium that serves as the school’s “living room” for students. An assistant dean of the school adds that the new social space has helped change the perception that the school of business is a sole destination for book worms enrolled in MBA classes.

“We’re working hard to break that perception,” Kole said. “When you come to campus, you see more activity. It’s a much more positive place to be.”

In fact, applications spiked 30 percent after the first year the University of Chicago put the new building in its marketing, however improved collegiate rankings contributed to the rise as well, she noted.

While the physical condition of a business school is not the most important factor of consideration, “you do consider the facility, you do consider what school will allow you to access the latest technology,” said Ashil Ann, a 26 year old prospective college applicant at New York University’s Stern School of Business and McDonough School of Business at Georgetown University in Washington.

High tuition costs contribute to students’ rising expectations - as well as the increase in size and complexity of the new buildings, said Jonathan Levav, a faculty member at Columbia. Tuition, room and board, as well as other expenses for two years at Columbia Business School cost approximately $168,307. With such high costs of education, along with a growing demand for loan origination, the expectations students have are respectable considerations for colleges everywhere.

While a number of U.S. based universities have made cuts to new construction due to decreasing endowments, business schools, especially those that offer MBA courses, are not as nearly affected from the reductions as other areas of study because of their ability to raise money.

“Graduates of business and law schools are often the wealthiest alumni,” said Ronald Ehrenberg, an economics professor at Cornell University, in Ithaca, New York. “It is easy to raise the funds to build buildings from donors to those schools” he adds.

For the school's new complex of buildings, Stanford’s school of business was granted $105 million, the largest gift in its history, from the Oregon alumnus who founded Nike Inc., Phil Knight. The Standford business campus, which will require an estimated $350 million, will be named the Knight Management Center in his honor.

Developing new buildings can also provide more room for additional education programs, like those pursuing MBA degrees or executive education, the highly profitable, non-degree programs for business-related employees paid for by their companies.

MIT Sloan’s new building has a learning center solely for executive education, offering a better ambiance than the rest of the school. Currently, many Sloan executive education classes are held off campus.

“It is on campus, it is clearly part of the Sloan school complex and it makes it easier to say ‘yes,” said the school's the associate dean for executive education Rochelle Weichman.

The innovative offerings are also in an effort to counter the growing popularity of online MBA classes, which have provided many students an extremely convenient alternative to post-secondary education opportunities.

MIT’s building holds offices for 107 faculty members who used to be distributed across five structures throughout the campus. To drive innovative ideas and creative brainstorming, the four new office floors are designed to encourage interaction between professors of different departments, said Lucinda Hill, director of capital projects at Sloan.

The Yale School of Management, founded in 1974, is the youngest business school among the Ivy League, a group of eight U.S. colleges in the Northeast. The school has areas of study in Masters of Information Systems Management as well as many more emerging Master's programs.

“We want to build a great business school,” Yale President Richard Levin said during an interview. Levin added that he wants the school of business to be on par with Yale’s law and medical schools and “be thought of among the best” in the world.

The faculty at Yale's business school is now working in almost 200 year old buildings and offices originally intended to be bedrooms. Many classrooms are buried in building constructed in 1961, which first housed Yale’s computer department.

“The current facility doesn’t look and feel like a business school,” Levin said. “I think it does hurt us in attracting students.”

Having more students will allow Yale to assure its programs are fully enrolled and to justify the size of its faculty, Oster said. More students also help with financial forecasting for future, long-term investments.

“You don’t want to be in a position where you have three students in each category because you’ll never get enough recruiters and you won’t get classroom excitement if the electives have too few people in them,” Oster commented. “We don’t have enough students to go around.” 

Business Schools Remain Surprisingly Resilient

From the Economist

The market for MBAs is defying the economic gloom

BUSINESS schools have been widely accused of fashioning the wrecking balls and training many of the demolition crews that have wreaked such havoc in the economy over the past two years. And the crisis, whether it was forged in business schools or not, is undoubtedly making it harder for students to afford their fees, or to get jobs when they graduate: in America only half the class of 2009 had been offered a job three months before graduating. Yet business schools are thriving. More than two-thirds of full-time MBA programmes received more applications this year than last, their best performance for five years, according to the Graduate Management Admission Council, a business-school association.

Deciding whether to go to business school or not is difficult. The long-term benefits sound substantial: an improved chance of getting a corner office and a six-figure salary. But the short-term costs are also weighty: two years at a leading American business school can cost $100,000 even before you take living expenses and forgone income into account. Many of the world’s most famous business people, from Bill Gates down, did not bother with an MBA, whereas some of the most illustrious products of business schools have covered themselves with ignominy of late. Consultancies, which were forced to recruit more people without MBAs in the late 1990s because of competition from high-tech companies, found that they performed no worse and sometimes better.

Still, on balance, the benefits probably outweigh the costs, particularly in straitened times. People with MBAs are more likely to get jobs than people without them, and earn higher salaries. Employers pay MBAs on average twice as much as people with only undergraduate degrees and 30-35% more than people with lower-level management degrees, such as Master of Finance. Some 98% of corporate employers report that they are satisfied with the MBAs they hire, a sign that they will continue to fish from the same pond.

Deciding which school to go to can be as difficult as deciding whether to go in the first place. They all seem to offer roughly the same thing, if the advertisements that appear in publications such as this one are to be believed: a chance to hone your skills as a “global leader” and “strategic thinker” while gazing at beautiful buildings. Happily, prospective students now have a plethora of “Which MBA?” guides to help them choose, from The Economist and such rivals as the Financial Times, the Wall Street Journal, US News & World Report and BusinessWeek, which started the trend in 1988. Less happily, perhaps, the guides yield some strikingly different rankings.

The Economist’s guide, published this week, ranks two European outfits, Spain’s IESE Business School and Switzerland’s International Institute for Management Development (IMD), at numbers one and two respectively. The University of Pennsylvania’s Wharton School only just makes it into the top ten at number nine (up from number 17 a year ago). The Financial Times (the parent company of which owns part of The Economist) puts Wharton and London Business School at the top of its list, and IESE at number 12. BusinessWeek, which ranks American and non-American schools separately, awards the top American spot to the University of Chicago’s Booth School and international gold to the School of Business at Queen’s University in Canada. The China Europe International Business School is ranked eighth in the FT’s list but only 95th in The Economist’s.

These differences reflect different methodologies. The Economist’s rankings rely heavily on students’ own assessment of their time at business school in general, and of whether their earning power rose and their “networks” expanded in particular. One reason why IESE did so well is that 98% of graduates found jobs within three months of graduation with an average basic salary of $125,000—a remarkable feat in the current economic climate. The FT’s list emphasises academic research as well as salaries. But the clash of rankings also has a bright side: it underlines the fact that there are different ways in which business schools can excel.

One of the most striking developments is that, contrary to the impression given by their advertisements, business schools are offering ever more diverse courses, giving prospective students a better chance of finding one that matches their aptitudes and interests. It normally takes two years to earn an MBA at an American school. At many European schools, including IMD and Insead, it only takes a year.

The Sloan School of Management is renowned for no-nonsense quantitative methods. Half of Insead’s alumni go on to start a business or purchase one. Hong Kong University of Science and Technology, with its spectacular location overlooking Clear Water Bay, has the best facilities in the world, according to many. The Indian Institute of Management is arguably the world’s most exclusive school, with more than 600 applicants for every place. HEC Paris has 63 overseas alumni associations in 49 countries. At Southern Methodist University’s Cox School some 250 executives act as mentors to the students. At Britain’s Henley Business School the average age of students is an experienced 37, compared with an upstart 29 at the Ross School at the University of Michigan.

Online MBAs, which not only reduce costs but also allow students to continue working, are proliferating. Warwick University’s “distance learning” MBA is a snip at £5,200 ($9,630) a year. There is also a boom in specialised qualifications. London Business School has introduced a master’s in finance. Nottingham Business School offers six different degree courses, including one in corporate social responsibility. Bordeaux Business School offers an Executive Wine MBA.

The growing diversity of the business-school market is surely welcome. There is also lots to be said in favour of multiple rankings, the better to illuminate potential students’ options. After all, different rankings, like different schools, suit different tastes and purposes.