It used to be simple. Top business schools fed the next generation of leaders a strict diet of proven strategies and reliable business models, and then turned graduates loose to run America’s corporations. Then came the Internet, and all the rules changed, seemingly rendering MBAs irrelevant — or at least a misuse of time. As hordes of young entrepreneurs calculated the opportunity costs of two years spent earning a degree rather than building an e-business, the number of B-school applicants plummeted.
In the wake of the great dotcom meltdown, however, ideas like workable business models, sensible marketing strategies, and sane growth projections are back in vogue. And B-schools are happy to welcome e-refugees who now see the competitive advantage of an accounting course or two. The enormous changes wrought by the new economy have forced B-schools to overhaul course offerings and demand more from professors to remain relevant.
What can students expect to consume in today’s MBA programs? Michael Porter for breakfast and failed B2C case studies for lunch? Many educators are struggling to strike a delicate balance between solid business fundamentals and sexy new-economy electives.
The New School
Harvard School of Business (HBS) has transformed its curriculum considerably under the guidance of dean Kim B. Clark, who joined the school in 1995. In addition to building a California Research Center (CRC) in Menlo Park, California, Harvard replaced its first-year requisite “General Management” course with “The Entrepreneurial Manager” last year. Harvard’s entrepreneurial courses have mushroomed from 2 to more than 18 over the past decade.
The Harvard case-study method is a sacred institution in B-school circles. Still, professors have been forced to vivify the signature teaching strategy to keep up with today’s pace of change. HBS students typically study 20 to 30 cases per course. Those cases — one-third of which are new each year — aim to teach interactive, global, and relevant practices, says Steve Nelson, executive director of Harvard’s MBA program.
To maintain dominance in a market clamoring for change, Harvard, like other top universities, has invested millions of dollars in research centers that transform current business issues into educational content. Harvard and the Wharton School of Business of the University of Pennsylvania have opened research centers in the heart of Silicon Valley, just a traffic jam away from the Stanford Graduate School of Business and its Center for Electronic Business and Commerce (CEBC). From there, students and professors can keep tabs on the pulse of the new economy and extend their networks among alumni in the Valley.
Riding the crest of such rapid change has become an exhausting exercise for professors. Faculty travel to Harvard’s CRC to research and write cases that are updated throughout the semester as industry and company conditions change. The 24-hour news phenomenon has also forced professors to update the HBS intranet with frequent breaking developments about fledgling companies.
Brick-and-click companies like RCA and Staples made this year’s case-study list alongside Internet pure plays like drugstore.com, priceline.com, and Boston.com. One professor referred to Harvard’s MBA program as “business school on Internet time.” Executive director Nelson says, “Our course development is so close to practice that faculty research can anticipate many of the changes taking place in management.”
Other schools, like the Darden Graduate School of Business Administration at the University of Virginia, cast doubt on dramatic curriculum overhauls. Dean Ted Snyder calls e-business and entrepreneurial studies “faddish” and steers Darden’s curriculum in a more traditional direction. Snyder attributes a remarkable increase in 2001 applications to the school’s deliberate evolution of the MBA program and to recent initiatives such as the Batten Institute, the UVA research center that produces issues-based initiatives that shape Darden’s teaching efforts, case writing, research, and projects.
“Leaders must learn the fundamentals in finance, marketing, and operations,” Snyder says. “Through our issues-based initiatives, we are able to weave current themes into ethics, e-business, and entrepreneurship.”
David Schmittlein, deputy dean of the Wharton School, says Wharton encourages individual faculty members to manage the balance of old and new. “The faculty at Wharton have a very strong research base and a deep understanding of some basic discipline,” Schmittlein says. “Through consulting activities, projects, and experimental learning, professors tackle issues and decisions of the day.”
Wharton’s MBA program includes more than 17 e-business electives, which are reviewed yearly. Schmittlein cites a low barrier to creating experimental courses, which become permanent once they pass the test of time. He too warns against basing case studies on new, unstable companies.
“Knowledge from last year’s cases may become obsolete in just a few years,” Schmittlein says. “Learning about industries through a set of cases is less effective than gaining a sound fundamental perspective.”
At least one-third of the elective courses offered at the Stanford Graduate School of Business didn’t exist five years ago, but dean Robert Joss says these e-business and e-commerce topics will remain optional.
“The management of information has become an integral part of every function, not a discipline in itself,” Joss says. “That is why we offer a solid base of courses in the foundations of business and then supplement that base with interesting electives. We don’t offer a master’s in e-commerce because such a degree cannot stand alone.”
Follow the Bouncing Ball
At a time when “dotcom” is used as an epithet, B-schools must examine new course offerings from the perspective of an incoming student — specifically, a dotcom refugee with a tainted opinion of e-anything.
“Last year, we saw students rush to our new course offerings with the intent of founding a startup,” Joss says. “Today, our e-business courses remain vital even to students entering the automotive or manufacturing industries because every business today is an Internet business.”
Snyder also cited a shifting focus within Darden’s curriculum. “We have certainly broadened the objective of the Batten Institute to include innovation and technology management within big companies,” he says.
At the same time, Schmittlein argues that even students who wouldn’t be caught dead working at a dotcom still want to learn about the business models and strategies that make dotcoms tick. For example, he expects Wharton’s “Marketing and E-Commerce” course to remain steadily popular regardless of students’ renewed interest in jobs at old-economy stalwarts.
“The content of our e-commerce or e-business courses has evolved substantially over the past three years,” Schmittlein says. “Supply-chain management courses won’t go away just because a few supply-chain startups have gone under. Our students still want to understand the business.”