HOW SECOND-TIER AND REGIONAL
B-SCHOOLS COMPETE WITH THE TOP 10
By Dominic Basulto
Applicants often devote too much focus to the elite
Top 10 B-schools, believing that only these MBA programs
can grant them a noticeable edge in recruitment, opportunities for senior
management positions, and a cutting-edge business education. However,
it is not the case that the education at a second-tier (and
sometimes even third-tier) business school is any less rigorous
or challenging. These can be viable options for many good students,
as these second tier schools may be more willing to provide scholarship
money to attract top candidates. The problem faced by less-recognizable
MBA programs is more one of brand differentiation- the need
to create a unique competitive advantage in a market saturated with
over 700 U.S. B-schools and over 300 European B-schools.
More often than not, lower-ranked B-school programs
are either located in less-visible regional markets or have not developed
the brand presence of a better-known program. In order to compete with
the heavyweights of the B-school world, there are two competitive advantages
which second-tier and regional B-schools seek to develop: (1) enhanced
exposure and access to local recruiters and (2) a more dynamic curriculum
which integrates niche and specialized programs.
ACCESS TO LOCAL RECRUITERS
In order to compensate for a lower ranking, many B-schools
do not try to be all things to all people, but rather, attempt
to focus on recruiting efforts within a regional market. These MBA programs
recognize that they can provide a competitive advantage to firms within
a specific industry - such as the current high-growth Silicon Valley
region in California. Stanford, U.California-Berkeley, and UCLA are
the most recognized players within California; however, a number of
more regional B-schools, such as California Polytechnic State University,
California State University, San Francisco State University, and U.
San Francisco have reorganized their curriculum to appeal to local recruiters
by emphasizing e-commerce and entrepreneurship. These are exactly the
two disciplines most in demand by high-tech start-ups. Simply stated,
these California B-schools have developed a conduit to careers in the
high-tech industry, even stimulating elite programs such as Harvard
Business School to develop a separate Silicon Valley presence. The ability
of local, regional players to adapt their curriculum to the need of
local corporations is not rare- witness the example of the Texas oil
industry, which draws from Texas B-schools (U. Houston, Rice, U.Texas-Austin,
Texas A&M, SMU) with access to strong chemical and petrochemical
engineering programs.
Similarly, B-schools with a regional focus
attempt to solidify their links with recruiters from corporations headquartered
in the immediate area. Consider the case of Chevron, a vertically-integrated
petroleum company (similar to LUKOil) which hires MBAs in both finance
and marketing for its headquarters in San Francisco. In the most recent
recruiting season, though, Chevron did not recruit at Harvard Business
School and did not hire a single HBS grad- despite hiring local
California candidates from second-, third- and fourth-tier B-schools.
In a vivid example of how close the inter-relationships can be between
business schools and corporations, Emorys Goizueta business school
is named for the former Chairman of Coca-Cola, part of an ongoing strong
recruiting relationship between Emory and Coca-Cola (both of which are
located in Atlanta). In Europe, this bias is more clear-
it is obvious that a less-visible Spanish business school such as ESADE
would have much stronger recruiting relationship with Spanish-domiciled
companies - something that London Business School may not have. Thus,
applicants desiring to work in Spain might consider a lower-ranked Spanish
business school.
DYNAMIC CURRICULUM INTEGRATING SPECIALIZED PROGRAMS
MBA programs have developed since the days of only
offering a general management education. Now, even second-tier programs
offer a staggering variety of electives, concentrations, and cross-disciplinary
programs. For example, Babson and Michigan State (both Top 30
programs) offer over 70 electives and have a full-time faculty of over
125 professors. Other programs attempt to compete by offering highly-specialized
tracks within a certain field. At Rochester Simon, students can now
receive a customized brand management MBA rather than a
plain vanilla marketing MBA. The natural result of B-schools
attempting to distinguish their offerings in a competitive market has
been the attempt to cash in on current trends in the business
world. For instance, after Carnegie-Mellon received over 900 requests
for information about a proposed new 12-month e-commerce degree within
a period of three weeks, it decided to join the rising number of B-schools
offering a separate program in e-commerce.
By far, the two leading new concentrations within
the increasingly diverse business school curriculum are e-commerce
and entrepreneurship. There are now over 71 B-schools which
offer an Entrepreneurship concentration, over 30 B-schools with a healthcare
concentration, and 15 B-schools which offer an e-commerce concentration.
While it can be expected that tech-savvy heavyweights such as MIT Sloan
would embrace these disciplines, by far the greatest action has occurred
at lower-ranked (and even unranked) B-schools seeking to differentiate
themselves from the traditional vanilla MBA programs. Within
the burgeoning Boston high-tech sector, candidates eschewing Harvard
and MIT can select entrepreneurship programs at Babson, Boston University,
Boston College, and Bentley College. In fact, Business Week now ranks
the entrepreneurship program at Babson as one of the Top 5
in the USA.
In addition to these specialized programs,
a number of B-schools have sought to leverage all the resources within
the university as a whole in order to assemble an overall package
equal to that of a Top 10 B-school. A leading role model
has been Yale, which offers a joint degree with one of eight professional
schools (including the top-ranked medical, law, drama, divinity, forestry,
and architecture schools) as well as four joint degrees within the graduate
school of arts and sciences. Lesser-ranked MBA programs may not possess
the depth or breadth of a Yale, Harvard, or Stanford, but strong state
university systems offer extraordinary scope. Leading public (state-sponsored)
B-schools such as Wisconsin, Illinois, Maryland, Michigan State, Ohio
State, and Indiana are usually ranked among the Top 30 in the USA and
provide a wealth of electives. At Illinois, students can choose from
one of twelve joint degree programs (including a multi-disciplinary
custom-designed program) in order to combine business acumen with professional
expertise. Moreover, small private B-schools often attempt to partner
with other area programs in order to provide more academic options.
Additionally, second-tier MBA programs with geographical
access to a major metropolitan area can often entice real-world practitioners
from industry to accept adjunct faculty or guest lecturer positions
in order to bolster a perceived weakness in the program or introduce
real world cases into the curriculum. While the leading theoreticians
and Nobel laureates typically migrate to big-name business
schools, the real world experience offered by adjunct faculty members
can be just as valuable for applicants desiring less theory in the curriculum.
Within New York City, Columbia & NYU Stern are easily recognized
as the leading business schools with the best access to Wall Street
recruiters. B-schools in close proximity to Wall Street, such as Fordham,
Hofstra, St. Johns, Pace, and CUNY compete by inviting Wall Street
players to teach both core and elective courses. At Fordham, financial
professionals from Chase Manhattan Bank, Standard Chartered Bank, and
Salomon Brothers are adjunct faculty members in the finance track, while
individuals from Price Waterhouse Coopers and Deloitte & Touche
bolster the accounting and taxation faculty.
CONCLUSION
The intense competition within the business school
industry should only be beneficial for all applicants. More competition
means more course offerings, more attempts to provide value to the end-consumer
(both applicants and recruiters), and more real world elements
introduced into the curriculum. It also means more choices for students
whose academic records or finances might not be sufficient for the top
ranked schools. Remember, though, that business schools are a business.
Courses and programs are merely products that are offered under a brand
name, so caveat emptor. Any MBA should retain value over the period
of your career, not grow obsolete. This is especially important to keep
in mind during the current worldwide high-tech boom. Attempts to create
a separate discipline in e-commerce are sometimes viewed as intellectually
dishonest by those who assume that B-schools are just trying to
leverage a fad and make a quick buck. Efforts to create degrees in management
consulting or investment banking have also been silenced
by the academics. This is as it should be.
Dominic Basulto is a 1998 graduate of Yale School
of Management and currently works as a consultant for Pericles ABLE
(American Business & Legal Education) in Moscow. Pericles offers
a full MBA advising program. For contact information, please call: 292-5188/6463.