When James Danko is called upon to give a speech to a Villanova University stakeholder—or anyone interested in business education—he likes to say, “This is the era of the undergraduate business student.” The dean of Villanova’s School of Business in Pennsylvania notes that the events swirling around graduate business education have created something of a perfect storm that has benefited the BBA.
“There was the recession and the decline in applications, and there were significant people like Warren Bennis taking shots at full-time MBA programs,” says Danko. “Employers are starting to look toward undergraduate markets when they’re recruiting and hiring. The reality is that undergraduate programs are really hot right now.”
In fact, they are. Since 1995, undergraduate business degrees have accounted for about 69 percent of all the business degrees awarded in the U.S. During that same period of time, the number of graduates from business bachelor’s programs has grown by roughly 80,000, and in the 2003–2004 school year, more than 300,000 individuals were awarded bachelor’s degrees in business. By contrast, only about 140,000 people earned master’s degrees in business in that year.
Even more impressive than the number of BBA degrees being awarded is how much BBA programs are changing. An added emphasis on experiential learning and global perspective is almost required these days, and deans are looking for ways to strengthen their undergraduate business curricula even more. The launching of BusinessWeek’s undergraduate business school rankings is expected to make many schools reassess—and perhaps upgrade—their BBA offerings. In fact, it’s clear that some schools are modeling their enhanced undergraduate degrees after the degree that has been so visible for so long: the MBA.
What’s more, some deans are starting to think that undergraduate education might give them a better return on investment. For years, the rankings race dictated that schools pour resources into their MBA programs, but the cost of recruiting and supporting grad students has led to rising expenses.
“We’ve decided we’re not going to continue to elevate our resource commitment to the MBA,” says Daniel Smith, dean of Indiana University’s Kelley School of Business in Bloomington. “Instead, we are putting incremental resource increases into the undergraduate program, both in terms of dollar investments and faculty investments. To strengthen our presence in the marketplace, we want to produce more quality students and have a larger faculty producing high-quality research.”
He’s not the only dean who expects to make such an impact primarily through upgrades to his undergraduate program. To add more prestige to their programs and more power to their brands, deans of business schools across the spectrum are refashioning their BBAs.
The Basic Degree
At first glance, it might not seem like the BBA has undergone extensive changes. After all, at most schools, the BBA is essentially an arts and sciences degree girded with basic business classes. According to Albert Niemi Jr., dean of Southern Methodist University’s Cox School of Business in Dallas, Texas, fewer than 50 hours of the typical 120-hour BBA degree are devoted to business.
Says Niemi, “If you look at the infrastructure behind a liberal arts and sciences degree, there’s no significant difference between a political science major and a finance major except finance majors have degrees that are more marketable.”
But while that liberal arts bias continues, schools are packing undergraduate programs with more experiential learning, more global exposure, and better job prep.
In addition, a few of the subjects traditional to MBA programs are making their way into the undergraduate curriculum, says Robert Jenkins, dean of the Farmer School of Business Administration at Miami University in Oxford, Ohio. He notes that essential MBA topics such as leadership, ethics, supply chain management, and entrepreneurship are infiltrating the BBA. Many undergraduate programs are also emulating their graduate counterparts by offering more course integration.
“My own observation is that most pedagogical changes happen at the MBA level first and cascade down to the undergraduate level,” says Jenkins.
Today’s BBA might also be spending more time in the b-school, as more schools are admitting students directly from high school. By recruiting freshmen with excellent GPAs, high SATs, and strong leadership potential, business schools are strengthening their programs by securing top students. Meanwhile, freshmen are not only guaranteed a place in the business school, but they often get special treatment during their first two years.
“Freshmen take enrichment programs, and they periodically have dinner with the dean. They bond together as an entering class like a new class of MBAs,” says Niemi of the Cox School.
At Kelley, most of the direct admit students go into the honors business program, which includes such benefits as access to visiting executives and attention from a career counselor. “They get a little more hand-holding,” Smith points out. “The MBA has become a high-touch program, and we’re starting to offer the same services to our honors and direct admit students.”
There’s the M-word again. The more deans talk about their undergraduate programs, the more it becomes clear how much today’s deans are modeling the BBA after the MBA.
BBA as MBA
The resemblance between the graduate and undergraduate degrees is particularly strong in two areas: globalization and experiential learning. Both now permeate the undergraduate curriculum.
Global perspective: At Cox, about 30 percent of the BBAs have an international experience before they graduate, and within five years, the school hopes that number is 100 percent. Niemi expects other schools to follow suit. “It’s pretty indefensible, in today’s world, to be turning out graduates who don’t have significant global immersion,” he says.
“It’s pretty indefensible, in today’s world, to be turning out graduates who don’t have significant global immersion.”
—Albert Niemi Jr., Southern Methodist University
Other schools—such as Warwick Business School in the U.K. and the Farmer School—are ramping up their international options. This fall, the Farmer School launches its China Business program for undergraduates, which requires intensive language and cultural study, examination of American and Chinese business practices, a summer internship with a company engaged in China-related commerce, and one semester studying at a Chinese university.
Warwick offers a specialized international undergraduate degree that requires students to take two foreign languages at an advanced level and spend one year overseas at another university. Students in Warwick’s other degree programs also can choose to add a year for international study, says dean Howard Thomas.
Experiential study: Many programs are also making sure students get real-world training. Students at the Kelley School can participate in a series of workshops, yearlong for-credit courses that focus on a particular field such as investment banking, consulting, or brand management. A professor hand-picks the students, teaches the content, reviews resumes, conducts mock interviews, and occasionally leads the students on trips to destinations such as Wall Street.
At the National University of Singapore, students not only can gain practical work experience through internships, but they also can participate in a consulting practicum. There, supervised by a faculty member, they execute actual projects at real companies. Says Joan Tay, deputy director for the school’s BBA Career Services Office, “Students have to negotiate the job scope with the company, plan, research, assess, and make recommendations. The experience is entirely different from internships, as students take on strategic roles as consultants to tackle real company issues.”
At the Farmer School, experiential learning is the focus of a decades-old program called Laws Hall & Associates, which operates like a marketing and communications agency. Held every semester on the Ohio campus and every summer in London, the program allows students to spend a full semester working with a fee-paying corporate client such as Pillsbury or Procter & Gamble. A similar program in Farmer’s Interactive Media Studies program brings together interdisciplinary student teams to provide digital solutions for technology-related problems.
Jenkins admits that these segments of the BBA curriculum sound like something that would appeal to a grad student. He notes, “At the end of the day, what makes a great MBA program? Strong leadership skills, strong global perspective, strong experiential learning. Those are the components we’ve replicated in our undergraduate program.”
And corporations are starting to notice. Deans report that recruiters are displaying more and more interest in BBAs that have better skills than the average undergraduate, though less life experience than the typical MBA.
“As MBA salaries have skyrocketed, recruiters have started looking for students who are a little more astute than the run-of-the-mill undergraduate, but not really MBAs,” says Smith. “For example, in consulting there’s an incredible demand for business analysts that could be met by high-end undergraduates with a little specialized training.” Business schools are looking for creative ways to help their undergrads fill that niche.
“MBAs can sometimes be jaded. But if you tell undergraduates that they could be the next Bill Gates or Martha Stewart, they actually believe it.”
—Daniel Smith, Indiana University
What This Means for the MBA
So why would anybody need an MBA? That’s a question that undergraduate deans are beginning to ask out loud.
“I do see a softness in the MBA hiring market,” says Danko. “Companies that used to hire full-time MBAs instead might be hiring undergraduates that they can form to their own mold.”
Adds Niemi, “If you’re turning out really high-quality BBAs, you could cannibalize some of your MBA market.”
Does this bigger, better, smarter BBA graduate spell trouble for master’s level business education? “I think the jury’s still out,” says Smith. “For some students, a good undergraduate program will get them down the career path fast enough that they may not need an MBA. Including bonuses, some salaries for kids right out of the undergraduate program are $60,000 to $75,000. My guess is, in five years, these people will be way up the career ladder, and they’d be nuts to go back and get an MBA.”
Still, most deans believe the MBA has an unassailable place in business education, primarily as a tool that helps individuals with some job experience switch industries. “The MBA is largely a post-World War II phenomenon that helped people make a career change,” says Niemi. “The MBA was really intended for someone who didn’t have an undergraduate degree in business, who found himself on a career path that he wanted to change. The best option was to go back to school, retool, come out with an MBA, and shoot off in another direction.”
“The MBA provides an environment where really bright people working together get a lot of experience in problem solving and strategic thinking,” says Jenkins. “These students develop a level of confidence and strategic capability that is unique to an MBA based on age, background, work experience, and what they learn from their peers.”
Smith foresees a time when strong BBA programs will nudge MBA programs into new formats. “An individual who has an undergraduate degree in business and six or seven years of experience, and who wants to go from being a business analyst to a consultant, might want to look at a one-year MBA,” he says. “On the other hand, if someone has an undergraduate business degree but wants to skip from being a CPA to being a brand manager, maybe he still needs the two-year program.”
The Job’s the Thing
As b-schools turn out more undergraduates ready for tough jobs in the real world, many of them are putting a greater emphasis on helping students actually find those jobs. Some schools are upgrading their placement centers and adding professional services to be certain students are ready for the work world.
While Villanova works through a centralized university placement office, the b-school has launched a Center for Student Advising and Professional Development. There, students are required to go through a “CEO program,” attend professional development seminars, and have one-on-one sessions with counselors to prepare them for the job market.
Similarly, at Indiana, Kelley students take two different three-credit hour courses on career development and preparation. Classes not only cover professional development, business etiquette, resume presentation, and mock interviewing, but give students a glimpse into what kinds of career paths are open to them.
National University of Singapore also offers a career prep program known as The Finishing School. There, students keep current on trends and industries, research companies they’re interested in, and study corporate culture. “We prepare our students at least one year ahead of graduation by engaging them constantly in career events such as recruitment talks, networking cocktails, forums, discussions, workshops, regular e-mail updates, and individual career counseling,” says Tay.
The specialized career center at SMU’s Cox School makes life easier for recruiters, Niemi believes, and is also a huge boost for students. “The best way to have satisfied students is to make sure they get great jobs at the end of four years,” he says. “When BusinessWeek started MBA surveys in the ’80s, the first place schools put resources was their career centers. Now that BusinessWeek is ranking undergraduate programs, I think you’ll see many schools start to offer more career services for BBAs.”
While not all business schools have specialized placement centers, it’s clear that many of them will need to start pouring more resources into grooming undergraduates for their first jobs. Not only will improved placement centers help schools earn higher rankings in student satisfaction, but they also will help schools stay competitive with other programs actively courting undergraduates with revamped curricula and services.
Bracing for the Future
The competition for students will only get tougher as undergraduate business programs blossom, believes Quek Ser Aik, vice dean for undergraduate studies and associate professor at National University of Singapore. “Online degree programs might become a serious challenge, enabling working adults to gain a BBA without quitting their jobs,” he says. “We also see more competition from international schools offering programs locally, because the BBA course is one of the easiest programs to export.”
Rising demand for classroom space and increasing pressure to maintain high quality in their programs may also force many schools to tighten admission requirements, which could create tension with alums who want to see their children enrolled at their alma maters. Yet while demand is intense now, some worry about what will happen in a few years when demographics predict a drop in the number of college-age individuals.
“Right now we have a big wave of echo boomers enrolling, so we’re at the peak of undergraduate business education,” Danko says. “The question becomes, in the year 2010 when we know there will be a dip, what will the effect on quality be?”
But now, while enrollments remain high, deans face very familiar challenges. As Warwick’s Thomas sums up, “They’re the same ones they’ve always been. Get the very best students, hire the very best faculty, teach the very best curriculum, in the very best facilities.”
What makes such challenges special for these deans, however, is that they’re geared toward undergraduate programs—and frankly, no matter how much BBAs may look like MBAs, there’s still a key difference. Call it youth.
On the one hand, these students need so much more guidance than more seasoned MBAs. “BBA students cannot usually bring to class the rich experience of the MBA students,” says Quek. “So the chances for learning from each other are much reduced within the BBA. It is also harder to motivate BBA students to think strategically, since they don’t even know how things work out operationally.”
Yet an undergraduate program is “a wonderful time to teach students the right kinds of things,” Thomas says. “Undergraduate education is generally important, I don’t care what subject it is. You’re teaching students to think and mature. This is the time when most kids are testing their views of the world.”
And often those worldviews are rosy. “Undergraduates are so beautiful because they approach the world with wide-open eyes,” says Smith. “MBAs can sometimes be jaded. But if you tell undergraduates that they could be the next Bill Gates or Martha Stewart, they actually believe it. It’s awesome.”
If undergraduate programs continue upgrading at the current rate, there’s an even better chance that the next business mogul will be hitting the streets very soon. As bachelor’s programs become tougher, more international, and more focused on job skills, an undergraduate business degree will become an even more prized commodity—while business schools become even better training grounds for the working world.