Saturday, October 11, 2008

M.B.A. grads face daunting job market


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, 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

Friday, October 3, 2008

Schools Cancel GMAT Scores

Top U.S. business schools canceled the admissions-test scores of 84 applicants and students -- including two enrolled at the University of Chicago and one who has graduated from Stanford University -- who allegedly supplied or accessed live exam questions posted on a Web site.

In June, the Graduate Management Admission Council, which represents the business schools and oversees the GMAT admissions test, obtained a federal court order that shut down the Web site and won a $2.3 million judgment against its operator. The site had been selling questions from recent exams to subscribers who paid a $30-a-month subscription. The operator of the Web site, believed to be in China, didn't defend itself in court, and it wasn't known where any representatives could be reached.

The latest episode has rattled the schools, and it comes as they have been trying to increase security.

The business-school council recently announced that it would require those taking the GMAT to undergo a "palm vein" scan, which takes an infrared picture of the blood coursing through their hands. Officials said it was designed to wipe out "proxy" test taking, in which applicants hire high-scoring imposters to take the exam for them. Previously, the administrator had used digital fingerprinting. Five years ago, federal authorities broke up a ring of six fraudsters who took more than 590 exams, including GMATs, for customers who paid at least $3,000.

Donald L. McCabe, a Rutgers University professor of management, has surveyed 200,000 students over 19 years and concluded that those in business school cheat more than those in other disciplines.

Prof. McCabe said schools will have to evaluate the evidence against each student they had admitted with canceled test scores. But he said business schools have "got to do something" to protect their programs' integrity, though he suspects "some may tend to whitewash it and do something mild.'

Judy Phair, a spokeswoman for the admissions council, said a computer hard drive seized through court proceedings found 5,000 to 6,000 subscribers to the Scoretop Web site. But the group decided to cancel scores only of those "against whom we felt we have airtight cases," Ms. Phair said. In many cases, she said, it wasn't clear the students had used the service or knew that they were improperly gaining access to current questions.

Ms. Phair said her group had evidence that 12 students whose scores were canceled actually posted questions themselves. In those cases, which she said the organization considered a theft of intellectual property, the students won't be eligible to retake the test for at least three years, effectively keeping them out of business school for that period.

The other 72 students wrote a message on Scoretop confirming that they had seen items on their GMAT exams. Those students will be allowed to take the exam again. The admissions council also recently notified schools about their determination that these students had prepared improperly for the exam.

The business-school group didn't identify the students or the schools where they applied or enrolled. Representatives at several business schools said their administrators would consider penalties, including expulsion, in such cases.

Two of the students who acknowledged viewing live questions -- but not the more serious category of posting the questions themselves -- are currently enrolled at the University of Chicago's business school, said Rosemaria Martinelli, the school's associate dean for student recruitment and admissions. Ms. Martinelli said Chicago is considering action against the students, but "we haven't decided anything."

Stanford's business school said scores of 11 applicants had been canceled. Ten of them were denied admission, and one had already graduated. The school said it will meet with the student "to discuss this situation," Derrick Bolton, Stanford's MBA admissions director, said in a statement. If any applicant reapplies, he or she, "at minimum," will have to supply an explanation. He urged that those whose scores were canceled "might learn from the experience by reflecting on their actions and taking ownership for their errors, then sharing those explanations and insights with us."

Representatives at the business schools of Columbia, Dartmouth, Harvard, the Massachusetts Institute of Technology and Yale said they had no students enroll with the tainted test scores. In an email, Peter Winicov, a spokesman for the Wharton School at the University of Pennsylvania, said officials were still "analyzing the situation are not yet prepared to discuss next steps."

Showing how much the scandal has shaken some in business school, Dartmouth's Tuck School of Business plans to hold an "ethics fireside chat" this month on campus to discuss the Scoretop cheating scandal, including officials from the business-school council.

About 4,000 business programs at 1,800 universities, including most top-ranked institutions, require the GMAT for admission. The business school council gives 230,000 tests annually and charges $250 for each exam.

Link to the original article