BUSINESS SCHOOLS IN A FLAT WORLD?

Simon BenningaDean, Recanati SchoolTel Aviv Universitybenninga@post.tau.ac.il

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Structure of talk

What’s happening in the MBA worldRegistrations?Where from?New schools?

RankingsWho’s taking the MBA—a view from the fieldWhat are we teaching in the MBAWhat does an MBA actually provide?

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Registrations (GMATs)

Numbers are down slightlyStrongly U.S. centered

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Who Takes the GMAT?

Overall registrations are down

Younger age group upHow many schools are they sending GMATs to?

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Is the World Flat?

The (GMAT) world isn’t flat—it’s completely US centered

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Are Canadians Flat?94% of all Canadian GMAT takers have their test results sent to US or Canadian schools.

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Flat Europeans?

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Flat Eastern Europeans?

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Asians are Flat?

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Perhaps Enrollments are Up?Letter from Wharton to faculty, June 2007

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New development:Schools without Faculty

DeVry University (look at the number of locations)Phoenix UniversityHult (see next page)

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DeVry:

75 Locations

On line

Named b-school!

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DeVry is a listed NYSE company

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DeVry Key Statistics from Yahoo

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Phoenix—Another Publicly-Listed University

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Hult—highly ranked? NO PERMANENT FACULTY

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Rankings

Many rankings, little correlationMuch confusionWhat’s being ranked?

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The Rankings Game

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Business Week Undergrad rankings, 2006

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Business Week

MBA rankings,

1988 - 2004

1. Northwestern

2. Chicago

3. Wharton

4. Stanford

5. Harvard

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Financial Times Global MBA Ranking

Where is Northwestern? (it’s #17!)

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Economist Rankings—Notice all the ads

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Economist criteria

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Rankings—depends on what’s ranked

If you try hard enough, you can always find a good rating.

Beauty is in the eye of the beholder.

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What’s in an MBA Program6 Clusters according to GMAC

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Number of Required Courses

MBA programs are heavily tilted towards technical/numerical skills

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MBA training is overwhelmingly technical

Are we doing a good job?Very personal

Some lettersMy books

My impression: Our technical training is not good enough (see correspondence which follows)B.S. is important, but ours focuses on inspiration and slogansOften too high-level, not enough middle-level management preparation

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The Need: A reader writesFrom: keith@clarityresearch.comTo: Simon Benninga Sent: Wednesday, September 22, 2004 2:37 PMSubject: Re: Re: PoF with Excel

Thanks, Simon.

I finished my studies many years ago, but my daughter (who attends Kenan-Flagler at UNC-Chapel Hill) recommended your "Financial Modeling" book.

While waiting for the book, I want to start with your web materials. Currently I work for a real estate developer--my boss and one of her partners are Wharton grads--and more and more of my tasks entail using models built in Excel.

I expect that your book and materials will improve my understanding of financial modeling. Additionally, I find it interesting in itself.

Regards,Keith

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From: "Deepak Moorjani" <deepak@moorjani.com>To: "Simon Benninga" <benninga@post.tau.ac.il>Subject: Re: Username/PasswordDate: Monday, September 27, 2004 1:01 AM

Hi Simon,

I studied at Duke University ('92) and went to work on Wall Street in 1993. I'm in the Bay Area in venture capital and feeling the need to refresh my modeling skills.

I went to the Stanford bookstore yesterday and picked up a copy of Financial Modeling. Very nicely done. I was an economics and philosophy major in college and would have saved myself much frustration in NYC if I had this book. This is the first book that I've seen that ties corporate finance theory with practical application!

Best wishes,Deepak-----------------------------------Upstart Management, LLC142 Sand Hill CircleMenlo Park, CA 94025

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Simply the best Intro to Finance book out there, June 9, 2006

Reviewer:Practitioner (New York) –With an undergraduate degree in economics and

two years of working experience in Wall St, you can say that I had the chance to read quite a few finance books. I find Principles of Finance with Excel to be hands-down the best Intro-Finance book of them all. Not only does it explains the finance topics very clearly, it teaches you how to apply this knowledgein Excel. This is by far, in my opinion, the best way to learn finance. Furthermore, since solutions to the exercises are included on the CD, this book is perfect to the self-motivated reader. Lost or stolen, I would purchase this book again.

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Do reviewers like the book?(nervous authors ... )

The next slide gives all the Amazon reviews written by Gustavo Jimenez

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What’s an MBA worth?

Apply NPV techniques to future earnings?

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Source: Brad Represshttp://www.bradrespess.com

Note: I’ve cut off some of the calculations (goes 12 years)

Conclusion:

NPV of MBA < 0

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Maybe the previous is too pessimistic?

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Maybe too optimistic?

(Provided by the AACSB, an MBA accreditation association)

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What are we doing wrong?

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The Current DebateHarry & Linda DeAngelo (USC) and Jerold Zimmerman (Rochester)

“What’s Really Wrong with U.S. Business Schools”(unpublished working paper 2005)

Warren Bennis and James O’Toole (USC),

“How Business Schools Lost Their Way”(Harvard Business Review, 2005)

Henry Mintzberg(McGill)

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Bennis & O’Toole: Too research-oriented

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DeAngelo, DeAngelo, Zimmerman:Not enough research

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Mintzberg

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The debaters:

“Softies against Hardies”

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The Hardies—Accounting and Finance

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Comments invited!

Simon BenningaDean, Recanati School of BusinessTel Aviv University

benninga@post.tau.ac.ilhttp://finance.wharton.upenn.edu/~benninga