Entrepreneurship has reached its lowest level of interest among MBAs in eight years.
Financial Times reports that up only 16% of students surveyed had started a business within three years of graduating. In 2015, 22% of surveyed students had started a business.
Among schools surveyed by Financial Times, the Olin Graduate School of Business at Babson College reported the highest proportion, 52%, of graduates starting a business.
Rise in MBA salaries being offered
Experts say a rise in salaries offered to MBAs by large, established companies has caused a drop in entrepreneurial activity among graduates. According to Financial Times, average salary growth among 100 schools sampled rose nearly 10% in the past three years. From 2008 to 2014, average MBA salaries rose 4%.
Jeff Lynn is a graduate of Oxford’s Said Business school and co-founder of Seedrs – an equity crowdfunding platform. Lynn tells Financial Times rising salaries for MBA grads makes it difficult for students to justify starting a business of their own.
“The opportunity cost factor is a big one,” Lynn says. “It is so much easier to take the plunge if your classmates are finding it difficult to get high-paying jobs.”
‘Start-up culture’ at large companies
Another potential reason why entrepreneurship has dipped in recent years is the change in culture at large companies.
Mark Potter is associate dean of Babson College’s Olin Graduate School of Business. Potter tells Financial Times that a number of companies now seek to provide entrepreneurs with positions where they can develop new business ideas.
“Organizations around the world are getting much better at trying to bake in an innovation and start-up culture,” Potter says. “This is a very attractive alternative for our students.”
Sources: Financial Times, Financial Times
Business World Seeks LGBTQ Talent
A number of business schools and companies are seeking LGBTQ talent.
Financial Times reports that recruiters are increasingly emphasizing diversity in the workplace.
“There are now more targeted recruitment events,” Roxanne Hori, associate dean at New York University’s Stern School of Business and a careers specialist, tells Financial Times. “Five or six years ago they just didn’t happen.”
Companies are actively promoting and pushing for diversity
Several business industries, Hori says, are now actively promoting affinity groups in a push to create more diverse workplace environments. At management consultancy firm, McKinsey, the Glam (gay, lesbian, bisexual, transgender and queer at McKinsey) network of LGBT+ colleagues has reached several hundred active participants since its creation in 1995.
João Soares is a partner at rival consultancy Bain, where he leads the LGBTQ initiatives.
“We’re committed to bringing the top LGBT+ talent to Bain and then we aim to provide all possible resources to keep that talent,” he says.
Nick Deakin is an investment-banking associate at Citi, which he says promotes a similar commitment to diversity.
“We want the best people to be coming to us,” Deakin tells Financial Times. “If you can show you have a diverse and open employment policy and working environment you won’t miss out on talent.”
LGBT candidates have a high level of emotional intelligence
David Poli is co-president of the Out@Anderson club at UCLA Anderson School of Management in California. Poli tells Financial Times that LGBTQ candidates often have high levels of emotional intelligence, or EQ.
A number of business schools have begun seeking applicants with high EQ. At NYU’s Stern School of Business, applicants are now required to submit an EQ Endorsement, which according to NYU’s website, includes skills such as self-awareness, empathy, communication and self-management.
Susan Cera is the director of MBA admissions at admissions consultancy Stratus Admissions Counseling. Cera tells Poets & Quants that EQ is more than just management skills.
“Part of EQ is the ability to recognize and understand your own emotions,” Cera says. “And the other is to understand and recognize and influence the emotions of others.”
Albert Saniger is the president of London Business School’s Out in Business society, a club that represents the school’s LGBTQ community. Saniger helped organize 2017’s EurOUT, an annual MBA conference that seeks to bring together LGBTQ talent from the world’s top business schools. This year’s conference attracted representatives from 30 business schools and more than 20 corporate sponsors, according to Financial Times.
“Gender identity is complex,” Saniger tells Financial Times. “There’s a lot of value recruiters can create for their teams. The individuals are self-aware and resilient. It’s an indicator of leadership potential.”
Fighting for LGBTQ Equality Among Campuses and the Workplace
For many MBA students, business schools in America serve as somewhat sanctuary environments.
Nipun Sehgal, a UNC Kenan-Flagler MBA student from New Delhi and co-president of the Pride Club, tells Financial Times that North Carolina presents a liberal environment. He says he is reluctant to return to India, a country where homosexual acts carry criminal offences.
Yet, there’s still a lot of work to do in improving and promoting the interests of MBA students who identify as LGBTQ.
Eric Insler is the co-president of Pride Club at UNC. Insler tells Financial Times that while North Carolina promotes a liberal environment, it isn’t necessarily the same across the US.
“There’s definitely a perception in the US that the south is a less tolerant place than the north,” he says.
Matt Kidd is the executive director of Reaching Out MBA (Romba), a non-profit that “empowers LGBT MBA students & LGBT MBA professionals to become professionals who will lead the way to equality in business education, in the workplace and throughout society.”
Kidd tells Financial Times that Romba’s mission is shift perceptions surrounding finance and business.
“How do you convince graduates that business school is the place for them?” he says. “For business schools it is becoming a priority.”
For Insler, the greatest challenge is creating allies who support the LGBTQ both in business schools and the business world.
“I had a lot to learn myself about transgender issues,” he tells Financial Times. “I’m an American gay man, but this year I realized I had to be an ally. It’s not just a journey for society, it’s a journey for us as well.”
Sources: Financial Times, NYU Stern, Poets & Quants, Reaching Out MBA
The expense of an MBA degree adds up quickly and can shock.
3 Aspects To Consider When Paying For Business School
Business school is an expensive investment. For many students, it generally means two years without much income. Therefore, it’s important for prospective students to consider the worth into socking so much time and money into a graduate business degree.
U.S. News & World Report recently reported on three aspects that students should consider when determining whether a grad degree is worth the investment.
When Borrowing Money, Look at How Much You’ll Be Earning
Mark Schneider is the vice president and an institute fellow at American Institutes for Research. He’s also the co-author of the American Enterprise Institute’s January paper “The Master’s as the New Bachelor’s Degree: In Search of the Labor Market Payoff.”
“There’s a standard rule of thumb that you should not be borrowing more than what your expected first-year wages are,” he tells US News.
For business students, there is good news. In his paper, Schneider analyzed postgraduate earnings from three states and found that master’s degrees in business, engineering, and real estate yielded the highest-paying outcomes.
“If you’re going to make $100,000 a year, then borrowing $80,000 is fine,” Schneider tells US News. “But if you borrow $80,000 with expected earnings of $30,000, then that is not fine – you’re going to be in trouble unless you have some other income.”
Take Note of Labor Market Payoff
Experts suggest prospective students to look at job outlook data published by the Bureau of Labor Statistics when considering grad school. Industries, like healthcare and business, tend to yield high payoff and stable job outlook.
For example, according to BLS data, pharmacists tend to earn around on average $120,000. Demand for the profession is expected to grow by 6% from 2016 to 2026.
In the business world, consultancy ranks the highest in average income after graduation. The average salary for 2016 consultancy graduates of full-time programs was $126,919, according to US News.
Is Prestige an Important Factor in Your Field?
In business, prestige carries more weight than other fields. In this case, prospective business students should consider prestige when looking at business schools.
Scott Rostan is the founder of Training the Street, a New York-based company that prepares college and b-school grads for finance jobs. Rostan tells US News that top financial companies only recruit from top business schools. And at top business schools, tuiton tends to cost more than $60,000 a year. At Stanford Graduate School of Business, single on-campus business students can expect to pay $112,797 for one year of education, according to Stanford’s website.
Rostan adds that prestige schools will pay off for business students in providing quality networks and opportunities.
“Many times the schools are prestigious because they’re known quantities,” Rostan tells US News. “You’re not going to get in trouble for hiring someone from a top business school.”
Sources: US News, US News, Stanford Graduate School of Business, Bureau of Labor Statistics
Business Schools Strive For Good
“Greed is good.”
The famous line by Gordon Gekko in the film, Wall Street, mirrors a traditional image of capitalism as a world focused on profit above all else. However, this “Greed is good” has grown increasingly unpopular among business students.
The Economist recently reported that business schools are increasingly making business ethics a staple of their MBA programs. In addition, a number of schools have implemented courses in corporate social responsibility, or CSR.
Harvard’s Leadership and Corporate Accountability course
At Harvard Business School, Leadership and Corporate Accountability (LCA) is a required course for MBAs. The course is intended to teach students the complex responsibilities business leaders face.
“Through cases about difficult managerial decisions, the course examines the legal, ethical, and economic responsibilities of corporate leaders,” Harvard’s website reads. “It also teaches students about management and governance systems leaders can use to promote responsible conduct by companies and their employees, and shows how personal values can play a critical role in effective leadership.”
Joseph Badaracco is the John Shad Professor of Business Ethics at Harvard Business School and established the semester-long LCA course. Badaracco tells The Economist that MBA programs should create good managers who can exercise good judgment. This is exactly what courses like LCA are trying to teach.
Badaracco says globalization means global firms must understand and comply with countless international rules. Social media also now puts companies on the spotlight, which means they’re expected to do and say the right thing.
“Things that were kept private in the past can and do get out, and you’ve got this transparency, whether you like it or not,” Badaracco tells The Economist.
Opportunities at Leeds
At the University of Colorado’s Leeds School of Business, the Center for Education on Social Responsibility (CESR) was created to educate MBAs in areas like business ethics, CSR, sustainability, and diversity & inclusion.
The mission of the center is “educating current and future values-driven leaders to engage and positively impact ethical, social, environmental and economic challenges,” according to Leeds’ website.
Leeds School of Business has had a long history in pushing for business ethics and sustainability. The Economist reports that in 2001, the Leeds family – the business school’s benefactor – formalized business ethics and sustainability in clauses written into the school’s funding agreement. In addition to taking required CSR courses, Leeds students also have the opportunity to visit companies committed to good business practices.
Mark Meaney is the executive director of Leeds’ Center for Education on Social Responsibility. Meaney tells The Economist that a strong foundation in business ethics may be the key to standing out in the job market. While a majority of MBA positions aren’t directly related to CSR, Meaney says, candidates with CSR experience will be seen favorably.
The days of “Greed is good” may be over. And now, it seems that the business world is shifting to simply do good.
Sources: The Economist, Harvard Business School, Leeds School of Business
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