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MBA programs fall short in places that count most, study finds

August 1, 2007

For more information, contact: Benjamin Haimowitz, HHaimowitz@aol.com

Drawing on the most comprehensive study of managerial skills yet undertaken, a new report finds ample grounds for agreement with what has become a litany of complaints about the lack of relevance of MBA programs.

And, ironically, a major reason for this lack, the study suggests, is the preferences of students themselves.

To be presented next week at the annual meeting of the Academy of Management (Philadelphia, Aug. 5-8), the report finds that, while most MBA programs do require courses that teach to most essential management activities, the offerings fall well short of what real-world managers need. And a major lack, it concludes, is in what managers identify as people-oriented skills as distinct from functional or technical ones.

"The present results show significant gaps between what is required for managerial work and the required coursework for conferring an MBA," write the study's authors Robert S. Rubin and Erich C. Dierdorff of DePaul University. And such gaps, they write, "are focused squarely on people-focused competencies."

Although "corporate recruiters routinely assert that MBA programs need to [do] more to inculcate 'soft' skills such as leadership, communication, and interpersonal skills," Rubin and Dierdorff continue, "research shows that students increasingly harbor negative attitudes toward such soft skills. Thus, students purport that MBA programs could be more relevant by disposing of anything that is not perceived as useful in gaining employment."

When curricula emphasize soft competencies, the professors write, administrators "are significantly more likely to report increased pressure from students to change the curriculum. Given that students are indeed the direct consumer and key revenue stream of most MBA programs, this finding supports recent assertions that students' general disdain for people-focused coursework drives considerable policy decisions regarding curricula... This finding may suggest that with respect to designing a relevant MBA, the customer is not always right."

The new study gains particular authority from the authors' analysis of a massive U.S. Department of Labor database derived through surveys of more than 8,600 managers. Fifty-two managerial occupations, running the gamut from funeral director to corporate CEO, are included in the database, with the number surveyed in each category proportionate to its representation in the national managerial workforce. Using these data, Rubin and Dierdorff were able to identify "six distinct behavioral competencies [that] best described the essential requirements for all managers" -- managing human capital, managing logistics and technology, managing decision-making processes, managing administration and control, managing strategy and innovation, and managing the task environment.

The professors then analyzed how these competencies squared with course requirements of 373 MBA programs and with the perceptions of 118 business-school administrators.

They found that "the vast majority of schools have at least a single required course treating each competency category." But there are also striking gaps between what real-life managers consider the most important skills and the amount of coursework in those competencies required by the schools.

For example, while practitioners consider managing decision-making processes as the most important of the six competencies, it ranks fifth in terms of the number of required courses in that subject. Meanwhile, managing human capital, the softest of the six competencies, ranks second in importance to managers but is fourth in terms of course coverage.

Conversely, managing administration and control, with is finance orientation, is first in terms of course coverage but is rated only fifth in importance by managers.

In short, "there is considerable mismatch between the levels of importance incumbent managers assign to these competencies and the degree to which [they] are covered by the essential courses that are required on average by MBA programs...If MBA programs are truly concerned with being relevant...this would most certainly involve an increase in the proportion of people-focused and decision-making curriculum content."

Noting that administrators agree with practitioners and recruiters on the importance of soft skills, Rubin and Dierdorff wonder whether "the apparent disconnect between policy-makers' awareness of competency importance...and what is required within MBA curricula raises some key questions as to the ultimate influence of MBA administrators."

In the end, the professors warn, "MBA programs may find themselves at a relevancy crossroads...If trends remain, institutions choosing to heavily rely on student preferences to make their programs more attractive in the name of relevancy may actually face the unintended consequences of becoming less relevant to real managerial work. Conversely, institutions driving their curriculum design choices based on actual managerial requirements may increase their true relevancy, all the while appearing less relevant to their primary consumers -- students."

The study, "How Relevant is the MBA? Assessing the Alignment of MBA Curricula and Managerial Competencies" will be among several thousand studies presented at the Academy of Management meeting. Founded in 1936, the Academy is the largest organization in the world devoted to management research and teaching. It has about 18,000 members in 100 countries, including some 10,000 in the United States. This year's annual meeting will draw about 8,000 scholars and practitioners to Philadelphia from August 5th to 8th for nearly 1,700 sessions on a host of subjects relating to corporate organization and investment, the workplace, technology development, and other management-related topics.

Media Coverage:
BusinessWeek.com. B-schools soft on "soft skills". (Thursday, August 02, 2007).
Chronicle.com. Companies and business students differ on what skills MBAs should teach. (Thursday, August 02, 2007).
FinancialTimes.com. Spotlight on MBA curricula. (Friday, August 03, 2007).

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