B-SCHOOLS GET A GLOBAL VISION Students will have to master a foreign language and culture as well as the usual tough material on marketing and finance. Ambitious stuff, but will it work?
By Jeremy Main REPORTER ASSOCIATE Patricia A. Langan

(FORTUNE Magazine) – THE MBA of the future should speak a foreign language fluently and be intimate with a foreign culture, Japanese preferred in both cases. He (or she, in the case of one-third of the graduates) should have a strong grasp of ethics, be sensitive to others' feelings, know how to negotiate, have polished business manners, speak and write well, and understand the uses of technology. The new MBA should also be familiar with the political, economic, and regulatory situations in the U.S. and Europe, and have vision, an entrepreneurial spirit, leadership qualities, and a capacity to innovate. He'll have two years to learn all that at graduate business school. Oh, and he'd better also pick up all the usual stuff about marketing, finance, and accounting. That's the view held today by America's B-schools. They are trying to transform themselves to turn out graduates capable of coping with rapid change, global markets, sharper competition, and new ethical and political concerns. Some schools, such as Virginia and Georgetown, will present students this fall with a fundamentally new curriculum. Others are gradually making major changes not only in course work, but also in faculty and the way education is delivered. For better or worse, students will get more of what educators call experiential learning, in which they act as consultants, intern in the U.S. and overseas, and join in activities like mock negotiations and Outward Bound trips. ''We've got to make fundamental changes,'' says Russell Palmer, outgoing dean of the Wharton School of the University of Pennsylvania. ''We've been tinkering.'' Chicago, Dartmouth, Georgetown, MIT, Northwestern, Stanford, and Virginia are just a few of the top graduate business schools moving with varying degrees of hurry. Only aloof Harvard seems bemused by all the fuss. Having lagged behind the transformations of business itself, the schools may be trying too much now. Says dean John Rosenblum of the University of Virginia's Darden Graduate School of Business Administration: ''We can't say, 'Let's design this whole new curriculum that will do everything the business community wants to a student who is really fully formed before he comes here.' It's a naive notion of education.'' Rosenblum may well be right, but the B-schools -- including his own Virginia -- are going to give it a college try, and no doubt some of the new thinking will rub off. It seems hard to imagine today, but 30 years ago the business schools, with the exception of Harvard and a few others, had about as much prestige as teachers' colleges, and their professors were paid less than high school teachers to start. Then in 1959 came two devastating reports sponsored by the Ford Foundation and the Carnegie Foundation. They said the schools were filled with second-rate students taught by second-rate professors who didn't understand their fields, did little research, and were out of touch with business. The reports galvanized the B-schools. Money flowed in, admission standards rose, and professors began performing rigorous research, some of which even had an impact on business. The schools' popularity soared. From under 5,000 a year, the number of MBA graduates increased to 67,000 today. Professors won respect on campus with their research and envy with their salaries, which reach as high as $150,000 for nine months in the top schools (not including perquisites and lucrative consulting work, which can easily double incomes). Taking the undergraduate as well as graduate levels into account, the business schools now account for 24% of the students in U.S. post-secondary education. WHILE the B-schools became smug and successful, concerns about them built up, on and off campus. Recalls Stanford professor Harold Leavitt: ''Around 1980 a lot of people like me began thinking things weren't going well, which was true of business too.'' As Leavitt sees it, a business leader must have three major talents: problem solving, implementing, and what he calls pathfinding, meaning visionary and entrepreneurial talents. Business schools teach the analytical tools needed for problem solving, he says, but almost ignore the other two. It is these skills business looks for more and more. ANOTHER PROFESSOR, Noel Tichy of the University of Michigan, believes business education is ''a disaster'' and ''needs a radical transformation.'' He says his colleagues' research has become so specialized and esoteric that ''most professors of finance can't hold an intelligent conversation with a vice president of finance.'' Says Tichy: ''We are making incremental changes while business needs quantum changes.'' A report last year sponsored by the American Assembly of Collegiate Schools of Business found ''there may be too much overall complacency and self- satisfaction'' in the schools. While it has not had the impact of the earlier Ford and Carnegie reports, the report, by professors Lyman Porter of the University of California at Irvine and Lawrence McKibbin of the University of Oklahoma, did fuel the reform movement. Businessmen surveyed in the report were moderately satisfied with their B-school graduates, but they strongly urged more emphasis on people skills. Said one unidentified CEO: ''We just routinely expect people coming in to be able to handle the work, but it's handling the client that gets to be the problem.'' Though the goals of reform are similar across the U.S., implementation varies quite a lot from one school to another. The revamped curriculum that will start this fall at Georgetown, a relatively small school, recasts most of the courses in a global setting. Among the ten courses required in the first year, only four deal with functional fields such as accounting and marketing. The others cover topics such as communications, organizational behavior, and the global environment of business. In their second year Georgetown students will take only two required courses, one on global business strategy and the other on ethics and public policy, both lasting two semesters. Georgetown students will also work a little harder for their MBAs, because they will need 60 credits to graduate instead of 58. They will take fewer required courses and more electives. The Darden school at Virginia will introduce what dean Rosenblum calls a ''fundamental change'' in courses in September, with more political and international content in the first year and more electives in the second. At Dartmouth's Amos Tuck School, which has a largely new and young faculty as a result of expansion coupled with a wave of retirements, a ''mission committee'' has just accepted reports from subcommittees that met over the past nine months to collect ideas from faculty and businessmen about what Tuck should be doing. Wharton has established a think tank to take a look at business needs of the 21st century to guide long-range curriculum planning. At the University of Chicago's Graduate School of Business, home of the hardheaded quantitative approach, a committee headed by professor Kenneth French has just handed dean John Gould a report recommending not only curriculum changes but also steps to humanize the school. These would include a residence for graduate students to give them a sense of community and a freewheeling student-designed course, new every year, in which numbers nerds might throw off their inhibitions and debate, negotiate, act, and even have fun. In response to overblown criticism that the B-schools are responsible for the decline of American business because they send too many graduates into finance and not enough into real jobs, some are creating joint engineering programs. MIT launched what it calls a Leaders for Manufacturing program last year. Students will earn twin master's degrees from the Sloan School of Management and the school of engineering. Eleven major corporations have funded 19 professorships and other teaching and research positions for the program. Northwestern's Kellogg school next year will launch a new program leading to a master's of manufacturing management, with the support of 30 companies. Anyone who gets the impression these schools are competing with each other to prove which is advancing the fastest the most would be absolutely right. The top 20 B-schools fight fiercely when it comes to nabbing students and faculty. Although the rankings among them are relatively meaningless -- the schools are much alike except for Harvard and Virginia, with their case study systems -- they are supersensitive to rankings, with reason. A Business Week poll last fall put Northwestern on top, ahead of the usual winners, Wharton, Stanford, and Harvard. Cornell, which sometimes doesn't even make the first 20, came in fifth. Partially as a result of these rankings, applications to Northwestern and Cornell soared this year, while applications to most schools have leveled off or even dropped a bit. Chicago was shocked to find itself ranked 11th, particularly since its own graduates gave it an even lower rating, awarding only a D to the curriculum. Says French: ''That bludgeoned us between the eyes.''

The dozens of good schools that never make the top 20 are changing too, perhaps none more than the University of Denver. Chancellor Dwight Smith describes what's happening to the business school as a ''total restructuring.'' Last fall for the first time, the school's 600 MBA candidates had to take courses in ethics, communications, negotiations, international economics, international management, and logic and reasoning. Professor Bruce Hutton, who is leading the charge at Denver, wanted to go beyond a new curriculum and change the ''whole experience.'' Therefore, all students and teachers will be required to give ten days' volunteer work to the community during the year. A group of 25 teachers and students have just finished an experiment in other nonacademic activities, including an Outward Bound weekend in the Rockies. The year ended for them with a banquet in a Denver mansion, where they had a chance to apply what they had learned about how to behave at a formal business dinner. The Denver school has literally an embarrassment of riches. It comes from Bill Daniels, 69, a fighting entrepreneur who had only two years of college. A pioneer in cable TV and owner of one of the two largest cable financial services businesses in the U.S., Daniels will give the business school $10 million, an enormous gift even for one of the best-endowed universities, which Denver isn't. DANIELS MADE his gift contingent on the college's raising another $10 million in matching funds. He recently added about $1 million to his offer to help subsidize the salary of the new dean the business school is seeking. The university was offering $90,000, but Daniels's second gift raises the available pot to $200,000, the sort of salary a college coach might get. Like many a CEO, Daniels has strong opinions on MBAs. ''They have excellent technical qualifications,'' he says, ''but the majority are virtually uneducated in what goes on in the real business world.'' He is fed up with young MBAs who wander into 9 o'clock meetings at 9:15 or 9:30 or who take two days to return a phone call. He remembers vividly a newly hired MBA he took to a meeting with the head of Twentieth Century Fox in Beverly Hills. As the kid walked in, he peeled off his jacket and threw it on a couch. Daniels is adamant about teaching the students kindness, courtesy, punctuality, cleanliness, proper dress, as well as academic subjects such as ethics and communications. ''I guess I'm telling them what to teach,'' says Daniels. ''But goddamn it, it's time someone did.'' The Denver business school would be happy if students learned all these virtues, but preferably as part of the overall curriculum. Daniels insists that his money be used to establish a separate entity at the business school that will probably be called something like the Bill Daniels Institute for the Enhancement of Graduate Business Studies. But for now Daniels calls it a ''finishing school'' or ''boot camp'' and envisions students spending an obligatory six weeks there after the normal two-year MBA program. Some universities would find that kind of generosity hard to accept. Many see the faculty as a problem, if not the major obstacle, in reforming the B-schools. Says dean Gilbert Whitaker of the University of Michigan: ''Changing faculty turf is a grindingly slow process.'' Business professors can afford to be even more independent-minded than other academics. As Whitaker points out, there's a 15% vacancy rate in the nation's business school faculties. The incentives for professors don't fit the new needs. ''Tenure is based primarily on what they publish in research journals,'' says Noel Tichy, ''and so we develop narrower and narrower specialties.'' What the business schools need now is breadth, a reversal of the requirements of the past three decades. Dean Robert Jaedicke of the Stanford Graduate School of Business puts the faculty dilemma in terms of a matrix. Today's teachers are divided by vertical columns of specialties such as finance and marketing. But what's required now are courses and teachers that cut horizontally across these rows. A course on, say, global markets would need to encompass finance, marketing, and the other specialties. Trouble is, he adds, ''you just can't go out and hire good global professors. The market is defined by the discipline. We could become completely irrelevant because of our failure to educate students who are capable of operating in a managerial world defined by the rows across the matrix.'' Then there's the problem of the academic respectability of some of the new courses. A subject that doesn't lead to tenure doesn't appeal to young professors. ''How can you get tenure by teaching public speaking?'' asks Leavitt of Stanford. Ethics and the art of negotiating are acceptable disciplines because professors can write learned papers about them with the requisite theoretical models and jargon, but topics like communications and career planning lack standing on campus. And business etiquette and resume writing have no academic cachet at all. To get around this awkward gap between | what the students need and what the professors are willing to teach, some schools such as Wharton have a sort of second level of noncredit instruction, through seminars run by nonfaculty teachers or short courses administered by the placement office. Are the B-schools taking on subjects that really cannot be taught? Some might argue that the art of management itself is unteachable. But what about globalism and ethics? Harvard professor C. Roland Christensen complains: ''Some of these problems they are assigning us are almost insurmountable. They talk of globalization. But you can't teach that with a course. It's the difference between living abroad and reading a book. We can run programs, but then it becomes at Zurich, not of it.'' Ethics is a more ticklish pedagogical problem because universities are getting large sums of money to give their students a shot of it. Harvard seems almost embarrassed by the $20 million pledged by John Shad, chairman of Drexel Burnham Lambert, to be used to promote ethics and leadership in business. The school still has no idea how to spend all that money on something so far removed from the bottom line. If the professors are sometimes bothered by the new directions, students seem pleased. They like especially the ''soft'' studies, the behavioral courses. At Northwestern, the art of negotiating is by far the most popular elective course, taken by almost all 930 students. Stanford students like what they call the touchy-feely stuff, known academically by the more formal name of interpersonal dynamics. Recent graduates believe they benefit from the new stress on the soft subjects. Says Randi Sinel, who graduated from Georgetown a year ago and went to work as a brand assistant in the dental products division of Procter & Gamble: ''I'm amazed to find I am faced with ethical questions every single day.'' They relate to premiums, promotions, advertising. She feels Georgetown sensitized her to see the ethical side of business questions. Other recent graduates of Dartmouth, MIT, and Northwestern say their communications and negotiations courses are proving especially useful in business. The key to the success of all this effort lies with employers. The schools are working hard to draw closer to business, to get their students out into companies, and to bring businessmen onto the campus. Many schools have acquired boards of businessmen advisers to help guide the change. Dartmouth students are divided into consulting teams that do real work for real organizations. Dartmouth teams have recently helped a troubled museum, a Veterans Administration Hospital, a small publishing company, and a bookstore. Cornell students will intern this summer with companies in nine countries on three continents. The University of Chicago runs 48 students a year through a lab that has helped Motorola, Zenith, and Oscar Meyer develop new products. Corporations tend to send out mixed signals about what they want. Recruiters look for people who can land running in an accounting or marketing slot, while CEOs talk loftily of the need for visionary leaders with a broad cross- functional understanding of business and its place in the universe. Will recruiters be impressed now by MBAs who are strong on ethics, negotiation, and a foreign culture? Employers deplore the concentration of MBAs in financial services and consulting but don't pay them enough in manufacturing to attract them there. Now the corporate backers of some of the business-engineering programs have promised to hire their graduates and try to pay competitively. Says dean Whitaker of the University of Michigan: ''The next big test for the business schools will be whether we get corporate support for our restructuring.'' The verdict on what the B-schools are doing will come in the end from business itself.


-- Give students a global perspective. For starters, require knowledge of a foreign language and culture. -- Sharpen their speaking, writing, negotiating, and other ''soft'' skills. -- Teach them ethics. -- Put more emphasis on managing and using technology. -- Prepare them for a ''cross-functional'' role that doesn't fit neatly into academic classifications. -- Send them into the field as consultants or interns.