Every year, the country’s most prestigious companies rush top grads at the most elite business schools—much like frat houses rush the most promising of undergrad freshmen. And yet, even as they deploy recruiters to lure 2007’s stars with the promise of six-figure salaries, CEOs are openly griping about the relevance of b-school curriculums and the deficiencies of their newly minted MBAs. Their main complaints? Coursework that centers on dense and arcane theory and graduates who emerge with a sense of entitlement and a dearth of key skills. This seeming disconnect actually reflects a disenchantment with MBA programs that’s been building over several years—one of which b-school deans are all too aware. “The criticism we hear most has to do with arrogance,” says Bill Boulding, associate dean for the daytime MBA Program at Duke University’s Fuqua School of Business, “essentially that students leave MBA programs thinking they should be CEO and tell everyone what to do when in fact they may not even be prepared to do the job they’ve taken.”

Increasingly, B-schools are seen as cloistered in their ivory towers pursuing research more concerned with esoteric theory rather than applicable tools. What’s more, courses traditionally compartmentalized by department—finance, accounting, marketing and operations—have failed to give students a big-picture view of how the various functions within a business come together. MBA grads, meanwhile, are criticized for emerging unschooled in practical application of management principles and with “delusional expectations” regarding the compensation and responsibilities their degrees warrant, as well as a dearth of soft skills such as team-building and communication.

Little wonder, then, that enthusiasm for MBA programs is on the wane. “You increasingly hear bright, young people being told, ‘Don’t bother to go back for an MBA,’” says Richard Schmalensee, the outgoing dean of the Sloan School of Management at the Massachusetts Institute of Technology (MIT). “We like to think we provide value, but when the customers say, no, you don’t, that’s a bad sign.”

This dampened ardor has yet to affect admissions, which schools report are holding strong, nor does it seem to be adversely affecting recruitment. Competition for grads is reported as particularly fierce this year. In fact, U.S. companies plan to hire 22 percent more 2007 MBA grads than they hired in 2006, according to a report from the National Association of Colleges and Employers. Yet deans at the nation’s top programs view the rumblings of criticism as cause for concern—“ a canary in the coal mine,” as Schmalensee put it—and are responding with ambitious efforts to revamp curriculums.

Demolishing Silos

The most aggressive transformation is taking place at Yale School of Management, where Dean Joel Podolny is steering a complete overhaul of the curriculum for this fall. Appointed in 2005, Podolny wasted little time attempting to eradicate the academic “silos” within Yale by creating a first-year curriculum that looks at fundamentals from the viewpoint of corporate stakeholders (customer, competitor, investor, employee, shareholder) rather than by function (financial, accounting, marketing, operations).

“They really tore apart the core first year and turned it on its head,” says Ronald Alsop, “MBA Track” columnist and editor of the business school rankings at The Wall Street Journal, who notes that because business education is a notoriously “copycat” world, the move could portend big changes for other schools. “Many people in academia are watching closely to see how well this works.”

Meanwhile, Stanford took a completely different approach, opting to customize curriculum to students’ levels of experience and career goals. It’s a method only a school with deep pockets can undertake, since it requires offering each of the program’s 11 first-year foundation courses at three different levels of sophistication, demanding smaller classes and more faculty time. The change—which also debuts this fall—is in direct contrast to Yale’s approach, presenting customized learning of specific functions versus a broader, integrated view.

In a sense, a new curriculum being launched by Duke seeks to bridge the two approaches by priming new MBA students with a three-week Global Institute, encompassing two core courses—Leadership, Ethics, and Organization and Global Institutions and Environment—that seek to prep students to become “collaborative leaders” capable of building, motivating and leading teams. For the first time, second-year MBA students will also be able to pursue two concentrations.

“Our goal is to produce people who are effective leaders in a complex, diverse global environment,” says Boulding, who explains that the big challenge today’s business schools struggle with is preparing students to be effective contributors at their next position while simultaneously providing the grounding they need for a lifelong career. “Some schools clearly believe in breadth, while others focus on customization. Our view is that there is a sweet spot between broad, deep knowledge and customization—a way to give students the foundation they need as well as space to selectively pursue the thing that will best prepare them for their first jobs.”

While not on the same scale as Yale and Stanford, many other schools have taken steps to change in recent years, notes Roger Jenkins, dean of the Farmer School of Business at Oxford, Ohio-based Miami University, who has observed three significant shifts in curriculum. “Good MBA programs have eliminated functional silo courses in favor of integrated courses, for example, having finance and marketing executives teach a course together or projects that involve strategic planning across functions,” he says.

“There’s also been a movement toward a stronger international component, such as requiring that students work abroad on a project at a real company. Finally, curriculum has be come far more aggressive in skills development, working with students to develop their decision-making, leadership and presentation skills.”

Global Gains

One of many schools expanding its global footprint, the London Business School is introducing a Dubai-London Executive MBA program in the fall of this year. As with the school’s partnerships with New York’s Columbia Business School and Hong Kong University, the 20-month dual campus program will enable students to take core courses while spending four to six days a month absorbing the culture and business world of a foreign city, explains London Business School Dean Laura Tyson. “Dubai, with its access to the Middle East, India and Africa, offers a great opportunity for students to expand their global exposure and forge relationships.”

At INSEAD, an international business school renowned for a diverse culture shaped in part by students hailing from some 80 different countries, more than 80 percent of MBA students spend time at the school’s Singapore campus in addition to its home base of Fontainebleau, France. The two campuses run the same courses at the same time so that students can “move seamlessly between them every two months,” says J. Frank Brown, who was appointed dean of the school in 2006. Many MBA students also do an exchange at University of Pennsylvania’s Wharton School of Business.

“That’s the opportunity to be on three continents, a fairly good tour of the globe,” notes Brown. “Beyond that, we also run specialized programs to India and China, as well as a Silicon Valley entrepreneurship program.”

Spending time abroad is an MBA requirement at Miami (Ohio) University’s Farmer School, where all MBA students spend six weeks on an assignment for a company in Europe or Asia. Farmer’s undergrad curriculum also has a heavy international component, adds Jenkins, who notes that participants in a China program launch ed in 2006 take two years of Mandarin and spend a semester abroad. “When they graduate they not only have functional knowledge, but a real understanding of China and the ability to deal with Chinese business issues and problems in a sophisticated way,” he explains. 

Inspiring Innovation

Schools are also making a more concerted effort to develop coursework that focuses on entrepreneurship, social responsibility and leadership—three areas of interest to both students and the corporations likely to hire them. Students seek the opportunity to become the next Larry Page and Sergey Brin, and/or to change the world, while corporations hope that programs on entrepreneurship, social responsibility and leadership will produce innovative thinkers with a foundation in integrity and accountability and the ability to motivate and inspire teams.

When MIT’s Sloan School launched a program called Entrepreneurship & Innovation for the MBA class of 2008, the response was “astonishing,” says Schmalensee, who reports that a third of the class applied for it. “This is MIT, where businesses are founded in the hallways, so entrepreneurship always runs at a high level. But clearly, interest is picking up.”

Interest in sustainability is prompting further change as schools scramble to respond to demand from both students and companies for courses that look at the topic from both altruistic and market opportunity perspectives.

“An increasing number of students come into our program wanting to save the world,” says Brown, who reports that INSEAD is responding to the trend by developing programs around social responsibility and understanding the impact of the environment. “These students are interested in joining an NGO after they graduate as opposed to going to a corporation, consulting firm or investment bank to make their first $20 million.”

At MIT, students participating in a new project-based sustainability course will work in the field during the school’s January break and debrief and compare notes when they convene back in class. Like many of its peers, the school is in the process of developing more courses to address the topic, as well as other areas of in -

terest on campuses and in boardrooms today, adds Schmalensee, who says that the new coursework and curriculum overhauls currently under way at business schools across the country are just the beginning of a virtual revolution in MBA education.

“You’ll see a lot more innovation in business education because many of us have the feeling change is needed—although what kind of change is still up for debate,” he says. “I wouldn’t nominate anyone for an Academy Award just yet, but in two or three years I think we’ll see some very interesting changes.”