Tuesday, December 9, 2008

Crisis Hits the Business Schools

Applications for MBA programs are up, but job opportunities for second-year students in finance or consulting have turned wretched

By Alison Damast of Business Week

After nearly four years as a management consultant at such firms as Deloitte Consulting and Booz Allen Hamilton, Ari Perlman was itching to try his hand at investment banking. So this summer the 26-year-old MBA student at the University of Virginia's Darden School of Business signed on with Lehman Brothers for an internship. Then all hell broke loose. With the economy unraveling and much of Wall Street seemingly on the brink of collapse, Lehman slashed bonuses for interns. And by the time Perlman returned to campus, the company had filed for bankruptcy. Lehman's last check for Perlman's travel expenses? Bounced. An e-mail explained that a new check would be in the mail. Eventually. "I haven't heard anything from them since," says Perlman, who's now looking for a consulting job. "And frankly, I am not too hopeful."

On the nation's B-school campuses, hope used to spring eternal. No more. Students like Perlman are downsizing their expectations, rejiggering career plans, and settling for less as the cascading effects of the global financial crisis start to be felt at MBA programs around the country. With companies pulling back on second-year recruiting and competition for the few remaining finance jobs becoming fierce, students are entering what surely is the toughest MBA job market since the dot-com bust. "I think next fall is going to be very, very difficult," says George G. Daly, dean of Georgetown University's McDonough School of Business. "This is terra incognita."

Despite the gloomy outlook for current students, applications to B-schools are on the upswing, driven largely by applicants who have been laid off or are otherwise hoping to ride out the recession. With more applicants to choose from, admissions officers can be pickier, making 2009 a difficult year to land a slot at a top B-school. Meanwhile, professors and deans are attempting to make sense of the financial crisis in the classroom, offering new electives and town-hall-style meetings on the meltdown, altering syllabi, and writing new case studies based on recent market-churning events. Risk management, until recently an unpopular elective, is expected to become a more important part of many B-schools' curriculums in three to five years, a trend that Robert Meyer, co-director of the Risk Management & Decision Processes Center at the University of Pennsylvania's Wharton School, calls "potentially transformational."

For current students, though, the only concern is finding a job—and nowhere is that dream receding faster than on Wall Street. Brian Mirochnik, 26, an MBA student at the University of Rochester's Simon Graduate School of Business, is facing that reality head-on as he looks for jobs in the investment banking field. He didn't receive a job offer from UBS (UBS) after his summer internship and now is scrambling to find a position, a search he fears could easily stretch into the spring. "Banks are telling me they are going through their own layoffs and don't know when they are going to start hiring again," says Mirochnik, who has given up on the big Wall Street firms and is looking exclusively at boutique investment firms and mid-market banks. "A lot of the factors affecting my future employment are just out of my hands."

Second-year students such as Mirochnik without job offers appear to be in the most precarious position. According to a survey by the umbrella group MBA Career Services Council, about 70% of the 77 schools surveyed said they saw a downturn in full-time recruiting opportunities in financial services in October. Meanwhile, about half of the schools said overall full-time job postings and on-campus recruiting this fall was either flat or down 5% during the same period, with some indicating it has fallen as much as 10%.

In the coming year, the job market for MBAs may begin to bear a striking similarity to the period following the dot-com bust when some banks and consulting firms rescinded or renegotiated job offers they had extended to second-year students. That hasn't happened this time around—yet.

But many are worried that the situation could change if the economy drifts into a deep and prolonged recession. "The dot-com meltdown was horrific," says Georgetown's Daly. "This has not reached those levels, but I expect it to."

With investment banking the hardest hit, many students are abandoning hope for Wall Street careers and pursuing jobs in consulting instead. At New York University's Stern School of Business—where about 40% of every class typically goes into investment banking—attendance at recruiting presentations by consulting firms has been standing room only, says Gary Fraser, Stern's dean of students, who oversees the office of career development. Attendance at interview preparation sessions offered by the management consulting club is up about 80% this fall. And some consulting companies are noticing a jump in applications from students who have done an about-face on Wall Street. Says Nikki Rath, the senior manager of campus recruiting and diversity initiatives at Booz & Co.: "We have definitely seen an increase in résumés that had a lot of banking on them."

But consulting may not be the haven many think it is. For one thing, the rush of finance students to consulting will make consulting jobs that much more difficult to land. With more students seeking consulting jobs, each one is likely to get fewer offers, making big signing bonuses unnecessary. Tom Rodenhauser, vice-president of consulting at Kennedy Information, which tracks the consulting industry, isn't optimistic. He says top students will get two or three offers this year, down from six in good years. Signing bonuses will dip to $20,000 or lower. The worst-case scenario? A student could receive a token bonus of $5,000 or none at all. Meanwhile, expectations are that 2009 will be a challenging year for many consulting firms as companies determined to trim costs cut back on discretionary projects.

All the bad news for B-school students has turned out to be good news for B-schools, which tend to do brisk business when the economy falters. Already, admissions officers say they are experiencing double-digit increases in applications for 2009 and increased interest from students. So far this year, the University of Chicago Booth School of Business has seen a 20% increase in attendance at information sessions worldwide and a surge in U.S. applications, says Rosemaria Martinelli, associate dean for student recruitment and admissions. At the University of Notre Dame's Mendoza College of Business, applications are up 20% from last year and admissions interviews are up 50%.

Meanwhile, worldwide registration for the Graduate Management Admission Test—a required standardized test for business school applicants and a leading indicator of future B-school applications—was up 16% in September from the same four-week period in 2007. The current surge in registration volume is similar to one that followed the bursting of the dot-com bubble, which led to an explosion in B-school applications about a year later. This time, the impact on applications is expected to be even more pronounced, since the downturn is not limited to a single industry. Says Dave A. Wilson, president and chief executive of the Graduate Management Admission Council, which administers the exam: "You are going to see a good surge in application volume next year, and maybe into the tail end of 2010."

Wherever they end up, those new applicants will find a B-school landscape in many ways transformed by the events of the past 18 months. While long-term curriculum shifts may take a few years, students can expect to encounter new classes, new case studies, and a new emphasis on risk. Much of this has already begun, with a growing number of business schools planning to add concentrations in risk management in coming years, ramping up the number of classes they offer and starting new risk management centers. Wharton's Meyer, also a professor at the University of Miami School of Business, is setting up such a center there this fall and predicts that others will soon follow suit.

At the same time, faculty are revising course descriptions and incorporating discussion of recent events in their classes. At Harvard Business School, professors Clayton Rose and Daniel Bergstresser are writing a case study examining JPMorgan Chase (JPM)'s hastily arranged takeover of Bear Stearns. They plan to teach the case to first-year students this spring in a class called "Leadership and Corporate Accountability." Rose says he is also working on two other case studies, one on Lehman and another examining investor Warren E. Buffett's $5 billion investment in Goldman Sachs (GS). "There are many lessons in financial management and strategy that will come out of this last year and a half and will probably extend into the future," he says. "These are big policy issues, so there will be plenty to write about and reflect on." NYU is adding a class on the Great Depression. One theme: How reforms implemented in the wake of that crisis may have contributed to this one.

At Georgetown, James J. Angel, an associate professor of finance, has already introduced an elective this fall titled "The Changing Structure of Financial Markets: Financial Crises Past, Present and Future." The class was so popular that 95 students registered for the 65 available seats. "In many ways, I felt like a geologist teaching a class about earthquakes," says Angel, who tore up his syllabus several times as turmoil in the financial markets rewrote history. "When the big one hits, the first instinct is, 'Wow, that's cool,' and the second one, you say, 'Oh no.' "

Tuesday, November 18, 2008

Success story of New Oriental founder 俞敏洪

I found this story from the internet and felt it very encouraging. If you can read Chinese, I hope you will like it as well.

This is his office when he first started the school.

This is his new office.























Saturday, October 11, 2008

M.B.A. grads face daunting job market

From MarketWatch.com

Fresh M.B.A. grads, especially those working for large banks, say they are living in a climate of fear.

"I feel lucky that I still have a job at this point because I've seen so many people lose them," said Deepa Pai, who recently obtained her master's degree from Northwestern University, and now works for Bank of America in New York, the company that bought Merrill Lynch as the credit crisis was unfolding.

As this type of upheaval became commonplace on Wall Street, a dicey reality emerged for young M.B.A.s. Read more on Wall Street's job woes.

"A lot of people are looking for a job whether they have one or not because they don't know what's going to happen with banks and the economy," Pai said. "I feel like the [job] recruiting process didn't end."

Turmoil in the stock market and decreased opportunities at big banks directly affect a lot of classic M.B.A. career paths, according to Steven Goodwin, an independent Washington-based education and career-strategy specialist.

He said he's received a surge of phone calls from nervous workers who obtained degrees over the past few years. Many of these former students are forced to broaden their job search and lower their standards, a move labor economists say trickles down and strikes people at the lowest rung of the ladder.

In general, students who settle for a lower position during an economic downturn rarely make up the financial differences in the long term, according to Lisa Kahn, a Yale University economist who studies the intersection of employer practices and external labor market factors. M.B.A.s are a unique subset of these students because most of them worked for several years before going back to school.

While it's too soon to tell how many people's career hopes have been dampened by the Wall Street crisis, it's likely that many M.B.A.s who wanted to work in the financial sector took jobs elsewhere -- or don't have a job at all. These individuals will have a lower financial trajectory over the course of their lifetimes, Kahn said.

"I definitely thought that getting out [into the working world] would be a time to focus on making long-term connections at the bank," Pai said. "But now I think I just need to focus on what I can do over the next six months to make sure I don't get laid off."

There is a small silver lining. "The people who do survive this in the banking sector will have a promising career," Pai said.

Monday, October 6, 2008

In Bailout Furor, Wall Street Pay Becomes a Target

Congress wants Wall Street to feel it where it hurts: the wallet.

The stratospheric pay packages of Wall Street executives have become a lightning rod issue as Congress shapes a $700 billion bailout for financial firms. Proposals circulating on Capitol Hill vary, but they all would impose some limits or approval authority on salaries of executives whose firms seek help.

The moves in Washington mirror the popular outcry — in constituent e-mail messages and postings in the blogosphere — over the prospect of Wall Street’s tarnished titans walking away with tens of millions of dollars a year while taxpayers pick up the bill.

But Wall Street, its lobbyists and trade groups are waging a feverish lobbying campaign to try to fight compensation curbs. Pay restrictions, they say, would sap incentives to hard work and innovation, and hurt the financial sector and the American economy.

“We support the bill, but we are opposed to provisions on executive pay,” said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, a trade group. “It is not appropriate for government to be setting the salaries of executives.”

Yet some formal restraint on executive pay seems unavoidable, even sensible, some finance experts and economists said.

Read the full article

Sunday, October 5, 2008

Damn It Feels Good to be Banker -- A Wall Street Musical

And the Best Executive M.B.A. Programs In 2008 Are...

Executive M.B.A. programs make a big promise: They'll turn up-and-coming managers into full-fledged leaders, showing them how to think strategically, inspire their staff and expand the business.

So, which schools do the best job of delivering on that bold talk? That's what we set out to measure in The Wall Street Journal's first survey of executive M.B.A. programs.

Working with Management Research Group and Critical Insights, we asked thousands of students and hundreds of companies to rank executive M.B.A. programs in a host of categories, with a focus on how well they develop management and leadership skills. The result is a ranking of 25 schools world-wide that takes into account the rigor needed to build tomorrow's corporate leaders and C-suite executives.

Topping the list: Northwestern University's Kellogg School of Management, which ranked No. 1, and the University of Pennsylvania's Wharton School, which came in No. 2. The two schools have among the largest E.M.B.A. programs, with 406 students currently enrolled in Wharton's two programs and 843 candidates in the seven Kellogg programs, including four international partnerships and a satellite campus in Miami.

What set Kellogg and Wharton apart? The schools got high marks from companies -- nearly double those of their nearest competitors -- which gave them a clear lead overall. And those stellar grades far outpaced their lower marks from students.

Kellogg and Wharton were ranked at the top more often by companies by a wide margin over their competitors. What's more, corporate scores varied the most in our surveys, with the leaders outpacing the middle of the pack, and the middle schools leaving the laggards far behind. That variation and wide lead shifted the overall rank in favor of Kellogg and Wharton.

In contrast, student survey scores showed less variation. Kellogg, for example, which ranked No. 15 in the student survey, had a score much closer to that of the leading schools. In a few cases, like that of the No. 1 school in the student ranking, the University of North Carolina's Kenan-Flagler Business School, a school's student score was strong enough that the school made the top five.

In all, we surveyed 4,060 students and recent grads from 72 executive M.B.A. programs at 53 business schools in nine countries on how well their program enhanced leadership and management skills; 62% responded.

We also surveyed 455 human-resources and executive-development managers at companies across 23 industries, on the value of the education provided by E.M.B.A. programs. More than 200 officials completed the survey, for a response rate of 44%.

Last, we looked at how well the programs met employers' and graduates' expectations when it came to enhancing their management acumen. We measured what employers wanted out of the programs -- largely, improved management and leadership skills such as managing change and strategic thinking. Then we asked students how well their programs delivered those skills, and weighted their responses to arrive at a final score for the 2008 ranking.

Read the full artical

Saturday, October 4, 2008

Study Up on Going Back to School

The grim outlook for the labor market has been leading more workers to reassess their career options. And it's tempting many to contemplate a return to school to buff up skills or gain completely new ones.

More education can add significantly to earnings, according to a report from the Census Bureau. In 2006, among workers 18 and older, those with less than a high-school diploma earned an average of $20,873, compared with $31,071 for those with a high-school diploma, $56,788 for a bachelor's degree, and $82,320 for a master's, professional or doctoral degree.

While such financial incentives may be alluring, experts say there are a number of important considerations that must be taken into account before pouring hard-earned cash into more schooling:

Determine Your Strengths and Weaknesses. Figuring out whether you need to go back to school should involve a self-assessment to determine what skills you already have and how you can build upon them to nab a job, experts say.

"Put together a picture of what you are good at and what you would like to do," says Deborah Russell, director of work-force issues at AARP. "If there is a skill gap, the next piece is to figure out where to get those skills."

It's also important to determine whether acquiring new skills will require taking just a course or two, or earning an entire degree. And workers should make sure to factor in family and social responsibilities, Ms. Russell adds.

Those with tight schedules may want to consider taking online courses, or immersion courses that are more intensive but last for a shorter period than a traditional course.

"Going back to school may look very different to different people," she says. "There may be caregiving obligations that may preclude you from taking courses during the day or evening."

Also keep in mind that a decision should be future-oriented, taking into account what employers will be looking for in coming years in addition to skills that are currently in demand, says Ronald Ferguson, an economist and lecturer in public policy at Harvard University's Malcolm Wiener Center for Social Policy.

"There are lots of different ways to arrive at estimates of what the future is likely to bring," he says. "Some combination or understanding of the current market and of what informed sources have to say about future demand would be prudent."

Find Local Demand. Try to find out which types of employees and skills are needed in your community, experts say.

Ms. Russell says you can start by asking career counselors at community colleges, as well as checking out state and local career centers. "Having a better understanding of your local community is more important than looking at it from a national level," she adds.

Once you know which skills are needed, you can tailor your education. More schools are cooperating with local employers to offer courses that suit workplace training needs, Ms. Russell says.

"Local training entities are much more in tune with developing training that corresponds to demands that employers have," she adds.

Weigh the costs -- and benefits. Make sure your financial gain from increased training is worth the expense, says Mr. Ferguson.

"Do some homework," he says, "to be sure that the skills [you] would be acquiring are both in demand and sufficiently compensated to make the time and effort and expense worth it."

Start by figuring out how much you are likely to spend. For the 2007-2008 academic year, in-state tuition and fees averaged about $6,200 at public four-year institutions, and about $23,700 at private four-year nonprofit institutions, according to the College Board.

Unless a degree is necessary, workers may be better off financially if they take just a course or two or pursue a certificate program.

And make sure to take advantage of low-cost or free offerings from community colleges, local groups and employers, such as programs teaching basic computer skills. An extension class might cost a couple hundred dollars or less.

Prospective students also should keep in mind that student loans may be harder to come by these days given recent credit-market problems, says Mark Kantrowitz, publisher of FinAid.org, a Web site offering financial-aid information.

"Lenders have tightened criteria," he says. "If you have a bad or marginal credit score, you are going to have a harder time obtaining a student loan."

Link to the original article