Is Wharton Ruining American Business?
Ask any Whartonite today what business school is supposed to do, and the answer you’ll get is likely some variation on “Find people jobs.” There is, after all, no bar exam for business, no pool of basic knowledge required to succeed in it. Steel baron Joseph Wharton gave Penn the $100,000 that founded the school in 1881 in large part to advance a curious agenda: protectionism. Wharton, who’d made his millions aided by steel tariffs, saw founding the first school of economics and finance as a way of preempting the spread of a dangerous new philosophy known as “free trade.” And while Wharton has long since embraced free trade as an economic concept, the MBA degree it invented has become its own sort of tariff, levied by universities on the aspirations of the would-be leadership class. The MBAs I met were all bright, young (average age 28), and undecided about which industries they wanted to land in. The appeal of Wharton was that this did not seem to matter. As the website advertises, getting an MBA is a fiscally prudent thing to do:
You’ll develop lifelong connections and leadership skills to engage the world … and transform your career in ways that extend far beyond your return on investment.
Excepting the preambulatory niceties, what Wharton is really telling prospective students is that they’ll get a return on investment, ROI for short, on their degrees. The term “ROI” has been so co-opted by the B-school industrial complex that many websites post Java-based ROI calculators with which students can compare Wharton to Carnegie Mellon on their most basic numerical levels. But it’s imprecise: ROI is more accurately a metric used by corporations to measure the profitability of a capital expenditure, like the purchase of a server or the construction of a new plant. The MBA is not a machine, though. Generating a decent ROI in an era when tuition and room and board for two years amounts to over $125,000 requires the commitment of years, sweat and tears to a job in an 80-hour-a-week field like investment banking or consulting; otherwise, the degree is often worthless.
More than 60 percent of MBAs become bankers and consultants, jobs for which the recruitment period can be as exhausting as work itself. So most MBAs, aware of this and free from most GPA concerns, seem to spend the rest of their two years developing “people skills” at Pub, pubs and the 100 MBA clubs. Class, meanwhile, was largely devoid of meaningful discussion. During a finance lecture with market demigod Jeremy Siegel, Wharton’s most popular professor, I watched a girl enter words in the columns of an Excel spreadsheet that turned out to be the steps to a choreographed dance set to a Beyonce Knowles song. Conversely, students appeared rapt at a pre-term career counseling seminar called “Succeeding in Business Today,” developed by Gail Madison, a Hermés-scarved Huntingdon Valley woman with shoulder-length hair who, despite a lack of business degrees, has built a successful business, the Madison School of Etiquette and Protocol, training businesspersons in the manners of success.
Madison began by distributing an etiquette quiz with 38 true-false questions. No. 33, “It is acceptable to drink alcohol at company receptions that usually follow the EIS (employment information session),” was an emphatic false.
“Test, test, test!” she cried. “It loosens us up, and we make mistakes!” (It may also be a test, Madison had warned earlier, if a senior executive lights up and offers us a cigarette when we happen to smoke. “It’s not corporate.”)
Then Madison lapsed into a series of rhetorical questions. What is the most powerful color suit you can wear? Navy blue, followed by black, for both sexes. (Brooks Brothers may be boring, but it works!) What do people look at first after a handshake? The feet! (Ladies, always wear heels between one-and-a-half and two inches. There may be industries in which you can go higher, but play it safe.) And hair should be short! Shoulder or above! If your religion prevents that, put it up! Dress for the person you would like to be! Name card on the right shoulder! Perception is reality!
In Madison’s eyes, the world of the post-MBA held no room for relativism, for human imperfection, for minor displays of distinctiveness. It seemed a grim way of seeing things, until I experienced its inverse, at another optional seminar, “Identity Is Destiny,” given by a consultant named Laurence Ackerman, who had written a book advising corporations to think of themselves as human organisms.
“It has been inside me to be who I am since the day I was born, and who I am creates value in the world,” Ackerman told the MBAs. “I get rewards in return. Both monetary. And psychic… When you’re in alignment with that, Life … Becomes … Magnificent.”
The student next to me flipped through his cell phone’s instruction manual.
Ackerman introduced an eight-part PowerPoint tutorial on finding an identity, from the Law of Being to the Law of the Cycle. All was calm until Ackerman started posing questions. When a slide flashed onto the screen asking “What is my gift?,” a long silence followed. He elaborated: “How, to use MBA lingo, do you differentiate yourselves?”
A slight, curly-haired girl raised her hand:
“I think this question makes a lot of people really nervous. That’s why there’s no response to this question. There are a lot of motivated, organized people here. I mean, I’m in the business world. My gifts are gifts that a lot of people have. I have quantitative skills.”
A guy in a gray t-shirt and Teva sandals he’d spent much of the morning slipping on and off was now moved to step in:
“I’m talented in math and quantitative stuff, but what I really derive value from is teaching, not doing all that quant stuff for clients…”
All the way back in 1977, a Citibank recruiter explained to Forbes why the company recruited MBAs and paid them so generously: “To hire 300 people, we’ll give over 7,000 interviews — so the efficiency and accuracy of the interviewing process becomes very important to us. … The chances are the MBA will know the jargon a little better and will have sorted out the question: ‘Do I want to write the Great American Novel? Or be a banker?’ ”
The thing is, a lot of MBAs are still, like the Teva guy, sorting out that question. It did not require advanced quantitative skills to determine that teaching would not deliver a suitable ROI on this man’s MBA, but his fate still had not settled in. All over Wharton, I found similar small bursts of dissent.
A telling moment from an ethics class, Merck case edition: In the ’70s, Merck learned that a veterinary drug it had developed could potentially treat African river blindness, a disease in which worms embedded in people’s skin and eyes, rendering entire swaths of the continent blind. Treating the illness would require Merck to spend millions testing and distributing the drug, with no hope of ROI. Should it do so? Most students raised their hands “yes” — perhaps realizing that “yes” had been Merck’s decision — while a healthy plurality, looking flummoxed, tried to explain to the class that Merck had no responsibility to save the world, that maybe if the company had received grant money, it would make sense. A male student raised his hand: