CAREERS : SHIFTING GEARS : New Expectations, Same Appeal for Today’s MBA
The MBA may not be the same sure-fire ticket to a high-paying job that it often was in the heady 1980s, but the lure of an advanced business degree remains potent, especially one from the nation’s most prestigious universities.
“The MBA has traditionally been a ticket to challenging and financially rewarding careers in management, and I expect it will continue to be so,” said Charles W. Hickman, director of projects and services at the American Assembly of Collegiate Schools of Business.
New demands from students and employers, however, as well as the nation’s sobered economy, have combined to modify the traditional business school curriculum.
Many schools now put greater emphasis on teaching entrepreneurial skills and such so-called soft skills as personnel management, team membership and communication. Other schools are integrating disciplines such as marketing and finance, and stressing international business. Others are making better use of new technologies and more industry-specific training in fields such as real estate or computers.
The changes, experts say, seem to have stemmed from what was starting to look like a drop in the MBA’s appeal.
Although the number of master’s degrees in business administration grew steadily until the early 1990s--more than 700 colleges awarded about 78,000 MBAs in 1991--a few signs indicating a decline started to appear.
For example, the number of students taking the Graduate Management Aptitude Test has fallen about 16% in the last two years. The GMAT is the main entry exam for graduate business schools. At the John E. Anderson Graduate School of Management at UCLA, the class of 1995 has 47 fewer students than the one that graduates this year, which in turn has 21 fewer students than the class before.
Recent surveys suggest, however, that MBA graduates from well-regarded schools can still command good starting salaries at the firms of their choice--a sharp contrast to anecdotal evidence that MBA holders are finding it ever more difficult to get jobs in an economy characterized by widespread corporate downsizing.
Among the reasons offered by the latest surveys is a more realistic set of expectations among executives regarding the abilities of MBA graduates. In the 1980s, some corporate officers seemed to view the degree as a panacea for a company’s ills. At the time, failed expectations soured some companies on MBAs.
Demand for MBAs this year should be up, according to the Lindquist-Endicott Report, a widely read employment survey of Northwestern University. The report forecasts that MBA hiring this year will increase almost 13% over 1993, after several years of up and down demand for business degrees.
More importantly, 1994 salaries for MBAs with technical undergraduate degrees are expected to climb 7.4%, to $51,540, the report predicts. For MBAs with non-technical undergraduate degrees, salaries are expected to rise 3.4%, to $49,584.
The positive outlook distinguishes MBA graduates from their colleagues in other professional degree programs, such as law. There, “the market seems to have gotten more competitive,” said Sandford Lechtick, president of Esquire Legal Search Consultants, a legal placement firm in Los Angeles. “Some firms have cut back on the number of lawyers on staff, and others have cut back on recruiting.”
Ann Bartron, for one, is glad she went back to school to earn her MBA. She didn’t always think she would.
“I was the kind of person who said, ‘Four years and that’s it; I never want to go to school again,’ ” said Bartron, 28. After earning an undergraduate degree in political science and organizational behavior from Brown University, she got a job as an account executive at a Los Angeles advertising agency.
Two-and-a-half years of that job persuaded her that an MBA might be a ticket to the executive suite. “Advertising . . . kind of eats you up and spits you out,” she said. “I decided if I were going to go into marketing . . . that an MBA would definitely help.”
She enrolled at UCLA and earned her MBA in June. The degree led to a position as assistant marketing manager for E. & J. Gallo Winery in Modesto, with more responsibility, fewer hours and about triple the salary of her former job.
Graduate school turned out to mean more than simply climbing the corporate ladder, she added. “It was the best thing I’ve ever done for myself, in terms of growing and a self-discovery experience.”
Things have changed for MBAs from the 1980s, when the popular--and not entirely accurate--perception was that an MBA could command a six-figure salary on Wall Street right out of school, and retire in 10 years as a millionaire.
For starters, the economy has changed the types of companies that are hiring MBAs. Now there are many more small- and medium-sized firms interested in hiring managers, not deal-makers, said William P. Pierskalla, dean of the Anderson school at UCLA.
There is also a change in the kinds of students pursuing MBAs. At UCLA, fewer nascent General Motors executives or future Michael Milkens seem to be enrolled, although the fallen junk-bond king did act as a guest lecturer for one UCLA business class last year.
Rather, “there’s a changing focus among the young people who come to get the degree to be more entrepreneurial,” Pierskalla said. “Students want to create a career for themselves that makes them fairly independent.”
For Terri Focht, the new approach helped broaden her horizons. Focht, 28, entered UCLA’s MBA program after concluding that her bachelor’s degrees in economics and psychology did not give her enough breadth of knowledge in business.
