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BUSINESS SCHOOLS IN A
FLAT WORLD?


Simon Benninga
Dean, Recanati School
Tel Aviv University
benninga@post.tau.ac.il
Structure of talk
 What’s happening in the MBA world
   Registrations?
   Where from?
   New schools?
 Rankings
 Who’s taking the MBA—a view from
 the field
 What are we teaching in the MBA
 What does an MBA actually provide?

                                     2
Registrations (GMATs)

 Numbers are down slightly
 Strongly U.S. centered




                             3
Who Takes the GMAT?




Overall registrations are down   How many schools are
                                 they sending GMATs to?
Younger age group up                                      4
Is the World Flat?




          The (GMAT) world isn’t flat—it’s
          completely US centered             5
94% of all Canadian
                      GMAT takers have
Are Canadians Flat?   their test results sent
                      to US or Canadian
                      schools.




                                                6
Flat Europeans?




                  7
Flat Eastern Europeans?




                          8
Asians are Flat?




                   9
Perhaps Enrollments are Up?
                   Letter from
                   Wharton to faculty,
                   June 2007




                                         10
New development:
Schools without Faculty

 DeVry University (look at the
 number of locations)
 Phoenix University
 Hult (see next page)




                                 11
DeVry:
75 Locations
On line
Named b-school!




               12
DeVry is a listed NYSE company




                                 13
14
DeVry Key
Statistics
from Yahoo




             15
Phoenix—Another Publicly-Listed
University




                                  16
17
18
Hult—highly ranked?
NO PERMANENT FACULTY




                       19
Rankings

 Many rankings, little correlation
 Much confusion
 What’s being ranked?




                                     20
The Rankings Game




                    21
Business Week
Undergrad
rankings, 2006




                 22
23
Business Week
MBA rankings,
1988 - 2004


 1. Northwestern
 2. Chicago
 3. Wharton
 4. Stanford
 5. Harvard




                   24
Financial Times Global MBA Ranking
Where is Northwestern? (it’s #17!)




                                     25
Economist Rankings—
Notice all the ads    26
27
Economist criteria




                     28
Rankings—depends on
what’s ranked




If you try hard enough, you can
always find a good rating.
Beauty is in the eye of the beholder.



                                        29
What’s in an MBA Program
6 Clusters according to GMAC




                               30
31
Number of Required Courses




MBA programs are heavily tilted towards technical/numerical skills

                                                                     32
MBA training is overwhelmingly
technical

Are we doing a good job?
Very personal
  Some letters
  My books
My impression:
  Our technical training is not good enough
  (see correspondence which follows)
  B.S. is important, but ours focuses on
  inspiration and slogans
  Often too high-level, not enough middle-
  level management preparation
                                              33
From: keith@clarityresearch.com
    The Need: A reader writes
To: Simon Benninga
Sent: Wednesday, September 22, 2004 2:37 PM
Subject: Re: Re: PoF with Excel

Thanks, Simon.

I finished my studies many years ago, but my daughter (who
attends Kenan-Flagler at UNC-Chapel Hill) recommended your
quot;Financial Modelingquot; book.

While waiting for the book, I want to start with your web
materials. Currently I work for a real estate developer--my boss
and one of her partners are Wharton grads--and more and more
of my tasks entail using models built in Excel.
I expect that your book and materials will improve my
understanding of financial modeling. Additionally, I find it
interesting in itself.

Regards,
Keith
                                                               34
From: quot;Deepak Moorjaniquot; <deepak@moorjani.com>
To: quot;Simon Benningaquot; <benninga@post.tau.ac.il>
Subject: Re: Username/Password
Date: Monday, September 27, 2004 1:01 AM

Hi Simon,

I studied at Duke University ('92) and went
to work on Wall Street in 1993. I'm in the Bay Area
in venture capital and feeling the need to refresh my
modeling skills.

I went to the Stanford bookstore yesterday and picked
up a copy of Financial Modeling. Very nicely done.
I was an economics and philosophy major in college
and would have saved myself much frustration in NYC
if I had this book. This is the first book
that I've seen that ties corporate finance
theory with practical application!

Best wishes,
Deepak
-----------------------------------
Upstart Management, LLC
142 Sand Hill Circle
                                                        35
Menlo Park, CA 94025
Simply the best Intro to Finance book out
  there, June 9, 2006
Reviewer:Practitioner (New York) –
With an undergraduate degree in economics and
  two years of working experience in Wall St,
  you can say that I had the chance to read quite
  a few finance books. I find Principles of Finance
  with Excel to be hands-down the best Intro-
  Finance book of them all. Not only does it
  explains the finance topics very clearly, it
  teaches you how to apply this knowledge
  in Excel. This is by far, in my opinion, the best
  way to learn finance. Furthermore, since
  solutions to the exercises are included on the
  CD, this book is perfect to the self-motivated
  reader. Lost or stolen, I would purchase this
  book again.


                                                36
37
Do reviewers like the book?
(nervous authors ... )




                      The next slide gives all the
                      Amazon reviews written by
                      Gustavo Jimenez




                                                     38
39
What’s an MBA worth?

 Apply NPV techniques to future
 earnings?




                                  40
Conclusion:
 NPV of MBA < 0




Source: Brad Repress
http://www.bradrespess.com
Note: I’ve cut off some of the
                                 41
calculations (goes 12 years)
Maybe the previous is too pessimistic?




                                         42
Maybe too optimistic?
(Provided by the AACSB,
an MBA accreditation
association)



                          43
What are we doing wrong?




                           44
Henry Mintzberg
                                               (McGill)
         The Current Debate
Harry & Linda
                       Warren Bennis and
DeAngelo (USC) and
                       James O’Toole (USC),
Jerold Zimmerman
(Rochester)            “How Business Schools
                       Lost Their Way”
“What’s Really Wrong
                       (Harvard Business
with U.S. Business
                       Review, 2005)
Schools”
(unpublished working
paper 2005)




                                                                 45
Bennis & O’Toole:
Too research-oriented




                        46
DeAngelo, DeAngelo, Zimmerman:
Not enough research




                                 47
Mintzberg




            48
The debaters:
“Softies against
Hardies”




                   49
The Hardies—Accounting and Finance




                                     50
Comments invited!

Simon Benninga
Dean, Recanati School of Business
Tel Aviv University

benninga@post.tau.ac.il
http://finance.wharton.upenn.edu/~benninga




                                             51

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Mba Makes The Worl Flat - Professor Simon Benninga

  • 1. BUSINESS SCHOOLS IN A FLAT WORLD? Simon Benninga Dean, Recanati School Tel Aviv University benninga@post.tau.ac.il
  • 2. Structure of talk What’s happening in the MBA world Registrations? Where from? New schools? Rankings Who’s taking the MBA—a view from the field What are we teaching in the MBA What does an MBA actually provide? 2
  • 3. Registrations (GMATs) Numbers are down slightly Strongly U.S. centered 3
  • 4. Who Takes the GMAT? Overall registrations are down How many schools are they sending GMATs to? Younger age group up 4
  • 5. Is the World Flat? The (GMAT) world isn’t flat—it’s completely US centered 5
  • 6. 94% of all Canadian GMAT takers have Are Canadians Flat? their test results sent to US or Canadian schools. 6
  • 10. Perhaps Enrollments are Up? Letter from Wharton to faculty, June 2007 10
  • 11. New development: Schools without Faculty DeVry University (look at the number of locations) Phoenix University Hult (see next page) 11
  • 13. DeVry is a listed NYSE company 13
  • 14. 14
  • 17. 17
  • 18. 18
  • 20. Rankings Many rankings, little correlation Much confusion What’s being ranked? 20
  • 23. 23
  • 24. Business Week MBA rankings, 1988 - 2004 1. Northwestern 2. Chicago 3. Wharton 4. Stanford 5. Harvard 24
  • 25. Financial Times Global MBA Ranking Where is Northwestern? (it’s #17!) 25
  • 27. 27
  • 29. Rankings—depends on what’s ranked If you try hard enough, you can always find a good rating. Beauty is in the eye of the beholder. 29
  • 30. What’s in an MBA Program 6 Clusters according to GMAC 30
  • 31. 31
  • 32. Number of Required Courses MBA programs are heavily tilted towards technical/numerical skills 32
  • 33. MBA training is overwhelmingly technical Are we doing a good job? Very personal Some letters My books My impression: Our technical training is not good enough (see correspondence which follows) B.S. is important, but ours focuses on inspiration and slogans Often too high-level, not enough middle- level management preparation 33
  • 34. From: keith@clarityresearch.com The Need: A reader writes To: Simon Benninga Sent: Wednesday, September 22, 2004 2:37 PM Subject: Re: Re: PoF with Excel Thanks, Simon. I finished my studies many years ago, but my daughter (who attends Kenan-Flagler at UNC-Chapel Hill) recommended your quot;Financial Modelingquot; book. While waiting for the book, I want to start with your web materials. Currently I work for a real estate developer--my boss and one of her partners are Wharton grads--and more and more of my tasks entail using models built in Excel. I expect that your book and materials will improve my understanding of financial modeling. Additionally, I find it interesting in itself. Regards, Keith 34
  • 35. From: quot;Deepak Moorjaniquot; <deepak@moorjani.com> To: quot;Simon Benningaquot; <benninga@post.tau.ac.il> Subject: Re: Username/Password Date: Monday, September 27, 2004 1:01 AM Hi Simon, I studied at Duke University ('92) and went to work on Wall Street in 1993. I'm in the Bay Area in venture capital and feeling the need to refresh my modeling skills. I went to the Stanford bookstore yesterday and picked up a copy of Financial Modeling. Very nicely done. I was an economics and philosophy major in college and would have saved myself much frustration in NYC if I had this book. This is the first book that I've seen that ties corporate finance theory with practical application! Best wishes, Deepak ----------------------------------- Upstart Management, LLC 142 Sand Hill Circle 35 Menlo Park, CA 94025
  • 36. Simply the best Intro to Finance book out there, June 9, 2006 Reviewer:Practitioner (New York) – With an undergraduate degree in economics and two years of working experience in Wall St, you can say that I had the chance to read quite a few finance books. I find Principles of Finance with Excel to be hands-down the best Intro- Finance book of them all. Not only does it explains the finance topics very clearly, it teaches you how to apply this knowledge in Excel. This is by far, in my opinion, the best way to learn finance. Furthermore, since solutions to the exercises are included on the CD, this book is perfect to the self-motivated reader. Lost or stolen, I would purchase this book again. 36
  • 37. 37
  • 38. Do reviewers like the book? (nervous authors ... ) The next slide gives all the Amazon reviews written by Gustavo Jimenez 38
  • 39. 39
  • 40. What’s an MBA worth? Apply NPV techniques to future earnings? 40
  • 41. Conclusion: NPV of MBA < 0 Source: Brad Repress http://www.bradrespess.com Note: I’ve cut off some of the 41 calculations (goes 12 years)
  • 42. Maybe the previous is too pessimistic? 42
  • 43. Maybe too optimistic? (Provided by the AACSB, an MBA accreditation association) 43
  • 44. What are we doing wrong? 44
  • 45. Henry Mintzberg (McGill) The Current Debate Harry & Linda Warren Bennis and DeAngelo (USC) and James O’Toole (USC), Jerold Zimmerman (Rochester) “How Business Schools Lost Their Way” “What’s Really Wrong (Harvard Business with U.S. Business Review, 2005) Schools” (unpublished working paper 2005) 45
  • 46. Bennis & O’Toole: Too research-oriented 46
  • 48. Mintzberg 48
  • 51. Comments invited! Simon Benninga Dean, Recanati School of Business Tel Aviv University benninga@post.tau.ac.il http://finance.wharton.upenn.edu/~benninga 51