Increased Ethics Training "Essential" to Future of MBA

In their new book, Rethinking the MBA: Business Education at a Crossroads, authors Srikant Datar, David A. Garvin and Patrick G. Cullen of Harvard Business School argue that reinvention is critical to b-school's continued relevance. I had a chance to discuss this idea recently with Datar and Garvin.

BNET: Even though enrollment continues to soar at top business schools, your book looks at some reasons the future of the degree is uncertain. Can you give BNET readers an overview of why this is the case?

Garvin: We looked at enrollment data in MBA programs by rankings, starting with U.S. business schools. If you look at the top 20 schools, enrollment has been pretty stable, particularly in full-time, two-year, in-residence programs. To the extent that there's been any growth, it's been in part-time and executive MBA programs. If you look at the mid-ranking schools, the schools ranked 21-36, in the period from 2000-2008, you see a very different story. You see very significant -- as much as 40-50 percent -- declines in the enrollment in full-time, two-year, in-residence programs. We saw exactly the same trend in European business schools for a slightly shorter period, 2004-2008. Stability at the top, but absolute declines in mid-ranking schools.

Datar: If you look at where enrollment in the top schools has been, they've been heavily and positively affected by placement into the financial service sector. One of the arguments we make in the book is depending on how that plays out going forward, there might be increased pressure on even those schools in terms of placement. When that happens, there are automatic pressures that come in terms of enrollment.

Garvin: That's the quantitative story. The qualitative story is, we spent a fair amount of time interviewing deans as well as executives. They raised some very basic questions about the value added of the MBA degree. Let's highlight two. First, particularly in financial services and consulting, these firms were increasingly hiring undergraduates immediately out of bachelors programs from the Ivy Leagues and then promoting them from within and seeing no need for them to go back to business school for increased seasoning or increased depth.
The second was a trend we observed again in very similar industries of using business schools for screening and selection purposes. They're hiring students earlier and earlier in their programs because they were viewed as desirable because they were in the leading programs. But they were hired before grades came in and before much course work even ensued.

BNET: Some of the criticism leveled at b-schools in recent years has been related to ethics. Do you think that MBA programs need to better integrate ethics training?
Garvin: We think it's absolutely essential. We argue that there are two imperatives that every business school needs to address. One is thinking skills. Creative, critical, integrative thinking. The second is to reflect deeply on the roles and responsibilities of business and business leaders. In particular, the ethical quandaries that business leaders face. What exactly is the line between public and private responsibility? How does one weigh the occasional competing needs of multiple and diverse stakeholders: shareholders, debt holders, employees, customers, regulators, the public at large?
We believe it's a substantial part of future business leaders' training. Now, having said that, we're very much against the idea of indoctrinating students with one particular set of values. What we think is essential is for them to reflect on the roles and responsibilities that business leaders face.

Next week, we'll talk about some more of Datar and Garvin's recommendations for rethinking b-school education.