News Scrapbook 1982-1984

MBAglut: Degree no longer jolil

h11 th· KOO San l)icgans who will re e1ve ., M,ish:r, of Bu,incss Administration (MHA) 1.k •rec tlu, year. the outlook may be less th.in rosy I h w,el't l·ented world of companies w11oing grnduatcs wtth pronuse, of high ,Lian ·s and easy entry to corporate man• , •cm •nt - prevalent only a few years ago 1s tudmg in th h:1rsh glare of economic r ,1lit1es I he downturn m ch:maml 1s e pcc1ally 11tc tor gr.,du.1tcs wllh no prior busmcs, I fl I h r Ill c plostv row th 1n M 8 ranks Imm ,000 gradu.itcd in 1964 to tod.,y' ,mm ,1 rop of nearly 60,000 (pro• duu:d hy 1lmost 600 ,chools) - ha, hcgun to level oil, due to increasing competition ,trul the ch:,ngi ng economy At an Diego arc,, univcrsittes, however, the rush for an MBA till , ·cm to be m lull swing, al• though some local academic officials cc u slackcnmg m th next y ar or two. l\.forc important. however. is that indus• try alrcmly ·c II day-to-day lowdown in d mand. In the past, tatistics and surveys. howcd that MBA holders - c,pec1ally those with ,tn undergraduate degr in sc ience or tech• nolo •y - wuld write their own tickets That " ticket" meant u high salary. In f.ict, according to a survey taken by the Un1vcrs,ty of California at Berkeley in rmJ 1983, the average salary ottered their MBA graduates then exceeded $30,000. with a reported htgh am ng the gradual• rr1 • claS\ ol $4 ,000. What the figures do not , how, accord- mg to univcr..1ty officials h re, i that tho:,c MBA graduate likely hav m re than a gruduate dcgre to offer; many have ex- tensive experience in business and, per- haps , ven a ut ski ll in high-demand continued on page 18 In the n1.111cr of the MBA /science under • gradu;llc " writing one's own tid t," whilt.: that may h;iw been trne three to the year, ,i o, "the mar 1.:ct has hecn correcting for that ,mu the st1uat1on is less true today." uccorJing to George Murphy. corporate director ol employee relation at Cuhic Corp , \\ho nclrevcs that th MBA degree ha, hccn recently revalued dowrrn,an.l. He attr1nutes that partly to the proliteratton of s hoofs ottering the degree , and to the rcserva11on of some high-tech industry offit·1,lls ahout the ability ol the MBA holder - even those hailing lrom the top husmcss schools " to move into mana- gerial mies. or be willing to e,irn their way m such roh:s ." Based on his contacts with other high •tcch firms acms- the nation . Murphy secs tar more willingness today !or companies to train their own execu - 11v.:s. Con,cquently, a number o f Cuhic employl'es .,re now working to earn Mas - ter·, degrees. cnhcr in the technical or hu,me" area Beyond that. hr, firm is more inter sled in the pcr,on who comes in with tive -to -10 years expcnencc in husmess. Experience a must "In an Diego. the young MBA gradu• at coming out of school faces a tough challen~e. for there arc not many large companies here who arc going to hire that person without any busm s~ cxpenencc," s:,y, Bill Couey. Oak lndustrie, · man gcr of publrc relations. ''We do not have a iargc rnrporate stuff, so we don t have an active MBA recruiting prograrn Our real need is_ for the degreed enginc~r" T_hc tact ts that most San Diego high-tech businc,ses arc smalt.to-medium In si,c and need executives with strong technicai backgrounds . "In our case," adds Couey. "th se few MBAs we do hire - usually as a financial MBAs conbnuod lrom pnge 1 --- 1r Id such ,ls computer,

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'Wtlere in the past the BA in business was routine ... that requirement probably is for the MBA today'

-Dr. William Barker SDSU

Photo by Joe Klern

It l~ very much an employer's mark~t in San Diego, says Ruiz, and the compet1· tion is tough . So tough• in fact , that those coming out of school with an MBA should have related expeticnce. For example,• It is virtually impossible for the person with a degree to get a job as an analyst pro- grammer, he says. His company wants a person who has gained a year or t"'.'o of experience elsewhere, so the_ begmner must simply •'dig in and get (a Job) some- place to get that experience." More selective Overall demand for MBAs is lessening and what demand there is is in specific are~s such as the Big Eight accounting firms. In short, he says, the MBA is help· ful but may be not relevant for the type of ·positions available. . At San Diego Trust and Savmgs Bank, the only management training program is for those with a BBA. And even a person without a degree can apply, for all that is required is a series of core courses or comparable experience. . Certainly, the MBA graduate will ha~e had the courses, but that is not the only hir- ing factor. The right-out~of-school MBA, with no business ei1penence, might be competing with an in·house applicant with· out an advanced degree, or even no de- gree, but with experience. San Diego Trust personnel manager John Nersesian explains that, while the bank has not cut back its hiring , the process is more selective now, so that those chosen for the management program "are placed proper· ly and don 't end up frustrated or leave to go someplace else." Having an MBA does not n~essarily give the person a "leg up" ~? get mto the program, he says, because you may get a person with an academic background who is not very good with 'people skills.' Most jobs in the bank are either branch-related or corporate•related and people skills are just as important as other work experience. It's a people business." The student studying straight through college to earn an MBA is at a definite dis• advantage , especially if he or she has never worked, says Nersesian. He cites an em- ployee who had worked his way through college with a job in the finance area, had a high GPA, and was a gregarious and out- going person. " Overall, such an individ• ual would be better able to sell himself (as the best one for the job) over the person with only a degree. There is a lot to be said for where the person is coming from. I don't think our outlook toward MBAs has changed that much. We look for good peo- ple who will stay around awhile, give them plenty of room to run and develop, which is just as important as the educational part. That is, now having it (the MBA) would not hold anyone back from advancing in the institution (bank)." He cites the case of an MBA graduate from an Eastern university who entered the management training program and had to compete against those straight out of col· lege with a Bachelor's in Finance and with those who had no degree. "He was evalu• ated on the same criteria as they were and had just as tough a time." The harsh reality is that the MBA today needs more than coursework for an entre to business. •

'We would much prefer to take a person with an undergraduate degree, and no MBA, than to go the other way around'

porate long-range planmng groups or in very large firms. He sees the demand for MBAs continuing and observes that em- ployees of many mid·size high -tech firms here are studying for their MBAs in an ag- gressive effort." to show that they are dif- ferent from the pack." At National University, too, there is strong emphasis on international business and on production, preparing the student to oversee the manufacturing function or, in the case of ervice firms, to head the operations function. National 's latest thrust, it new MBA program in Costa Rica, a curriculum insti• gated at the invitation of government edu- cation officials there. Carver reports that already there is interest in the idea from Venezuela and other Latin American countries. But while there is a need for MBAs in developing countries, the trend may be dif- ferent domestically. Cubic's Murphy observes a "lessening demand for the MBA and the only way we can consider one today is in combination with an undergraduate degree in a techni- cal area. And we would much prefer to take the person with an undergraduate de- gree - engineering, some type of computer science, occasionally physics or math - and no MBA, than to go the other way around. " We have occasional demand for the MBA in our finance department and quite rarely in our marketing group." In the world of finance, BA or MBA holders should not bank on their degrees to land a job. Greg Ruiz, employment manager with Great American Federal Savings Bank, points out that requiring a degree as a minimum qualification for a finance job is not as prevalent as in manu- facturing or education. Austerity moves j brought on by the recent recession forced many banks to cut back on management training programs, he explains, and, at least at his bank, such programs are not expected to be resurrected this year. Most job opportunities at Great American today are at two points: entry level, where no degree is required and one moves up through the ranks; and in specific positions where the need is for experienced people. "To say that a degree, either MBA or BA, unlocks the door in the financial in· dustry is not true;' Ruiz emphasizes. " We do take (the MBA) degree into considera• lion, but the person who has six or seven years experience in the firm has attended a multitude ofseminars, workshops and in• house training programs which can be just as valuable. The MBA becomes important ~f the organization has a management train- mg program, as a criterion to get into it. However, the person who has worked for a small bank for five years, became a branch manager, and now wants to move to a bigger bank, could compete with the recent MBA graduate and be able to move (right) into a management training pro• gram. What qualifies a person for such·a program is a gray area and, as conditions become more competitive, we hire a great number of people with only a BA. And these people are competing against those who come with only a high school educa• tion or perhaps only junior college courses." Avg. Age of Student No. of MBAs to be granted University this year 135-140 80-100 SDSU USO .. USIU . NU . 26-27 28-30 30+ 100 34 143• ·F,gure for Janua,y 1984 Naliooal has 4 graduallons a year

ronmcnt following the breakup ot AT&T "In order to compete. we must hire peo• pie who can 'hit the ground running,' .. add, Harlow. However, the PacBcll's man• agement intake programs typically involve individual, with undergraduate degrees in cngineermg, computers and other tech - nologies , as well as those with advanced trnining in such areas as marketing and planning. And,'"}' Harlow. prior experi- ence ts quite important. "We want people "'ith a strong leadership ability and much of that comes lrom those with extensive prior nusmcss experience: · That means. she cxplams, that for those wtih an under• graduate degree. business ci1pcrience rs al• most as good a teacher as getting an MBA. " The principal thmg we look for in a prospective employee with an advanced dcgn.:c is the person ·s grade point average (GPA)," says Harlow, although she con cedes that a person from Stanford. Harvard or other top busrnes, schools most certain• ly will be looked at regardless of his or her GPA . Most people working for an MBA in San Diego have an undergraduate degree in a science or engineering field. which reflects the percentage of high-tech industry here. Not surprisingly. their pursuit of advanced training in business has support on the campuses. • i\n engineer can be an engi- neer. but with an MBA he or she also can be a manager." says David Feldman. dean of the School of Business at United States lnternatronal University (USIU). Don Carver, dean of the School ofMan- nd Business at National Univer- itv. be1ievcs that engineers make ideal M_BA candidate becau e "they are disci- plrned as stuuents." How va!uable is the MBA? Is it like the ~A m business used to be - that is, it is a requirement to get hired? "Yes and no., says Dr. Wilham Barber, associate dCZ:n for gra~u~te studies at San Diego State Umvers11y s CoUege of Business Ad .. . .. · mrnrs- tratton. There are still many . ways to enter the busrness world, and many peo• ple make !heir way on their own back• grou nd , _skills and abilities, without fonnal prepar~t1on in business su bjects. However, whe~e Ill the past the BA in business was routine as a requirement for admission to some 1 YP<:s of bu iness, that requirement probabl_y 1s for the MBA today.',

-George S. Murphy Cubic

Photo by Joe Klein

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forecasting, financial analysts and human resources management, management con- sulting. management information system,. and marketing (which encompasses prod- uct!, and services, research, sales. adver tising and promotion, account executives and research analysts). The Guide cautions those seekmg an MBA to examine carefully the so-called "glamour" industries to determine how one's personal characteristics relate to job market realities. The material cites former "fast tracks" in career opportunitie which failed to maintain the image placed on them. Wall Street in the late 1960s, real estate a few years later. marketing in 1976 and the notion in 1977 that quick success lay rn becoming a management consultant. rnvcstment banker of assistant to a top cor- porate executive. Today, according to a survey of 1,300 chief executive officers. the areas of great- est growth through 1985 will be line- management specialities with an immediate impact on profitability, such a general management and marketing/sales, followed by taff functions such as information sys• terns/data processing, research/engineering and personnel. The Guide also predicts that industries with the most potential growth include ser- vices, health care, retail, leisure/entertain- ment, agriculture and communications. A recent study of 1.700 ei1ecutives in 750 large corporations showed that one-third of those queried regard finance/account- ing as the specialty most likely to lead to advancement in a managerial career. The bottom line How much more a year can a San Diego MBA graduate expect to make? Barber estimates about $2.000 per year, while others in the academic community opt for $4,000 to $5,000. It should be noted, how• ever, that SDSU graduates are, by and large, a bit younger than their counterparts from other area institutions and are more likely to enter the job market without much prior experience in the business field. The value accorded the MBA certainly is influenced by training relating to indus- J try trends. The University of San Diego (USD) School of Business Administration, for in- stance, recently introduced a course in high-tech management which, on the face of it, seems counter to expressed industry needs. But, according to Mario Piccon1. director of MBA programs at USD, when employers in the high·tech community were asked what they want students to learn, they responded, "Give them the traditional disciplines of finance, market- ing and ba~ic'Skills in writing aml·atcount· '

ing so they can deal wuh those functions in the firm they join. What we really want are people who have the flexibility to ab- sorb, so we don't have to worry about in- dividuals who are inarticulate - verbally or quantitatively - or don't know about the computer in a general way. Do a good job with the basics and we w1IJ teach them the uniqueness of our business." Still. the school developed a course in managing high-tech organizations - from a people pOlm..Q.( view. The premise was that an organization maytm talented pro- fessionals who are geared heavily to eng, neering and computer science, but they lack interaction skills . Another strong emphasis at USD is on international business, with an entire cur- riculum devoted to the subject. According to Picconi, the national accreditation orga- nizallon for business schools has indicated that universities should mcrease emphasis in the international area - not just with pans of courses, but entire courses in the subject. "We are facing a new dimension," he observes. USIU, by its very name, heralds a stresi; on international commerce and, says Feld· man. the heavy focus long has been on political economy. "We don't separate politics and economic ." He cites the problem encountered by Yamaha Corp. when it tried to sell its motorcycles in the United States as a case in point. " They built the best motorcycle at the cheapest price, came to the United States and did heavy advertising. They were hit with a 49 percent tariff. Honda, on the other hand, built a plant in the United States and is now doing quite well. You have to see the whole world as a mix- ture of politics and economics." Among the new courses at USIU is one on production management. "We have realized that while figures and finance are fine, we must produce products - and that we have fallen behind in how we teach people to build a good product, build it well and over time.'' For this, people must have hands-on experience, he declares. "The future (in business) will be very heavy, not only on marketing but also - as the Japanese have shown - on turning out a quality product at a good price and knowing how to sell and deliver that prod- uct anywhere in the world." National University's Carver sees a ten• dency among business administration schools to move more toward industry - reversing what he believes was the direc- tion in recent years. Carver discounts what he calls industry rumblings that "We (industry) don't want people ·train~ only quantitatively," and that soch people can only 1JC useful on-cor•

analyst or in an accounting capacity - already have experience with another company." That said, does he recommend that a person go for an MBA? 'i\nsolutcly The MBA will keep you up with th~ competllion.'' Bucking the trend - somewhat At Pacific Bell. the move i. to increase the _intake of MBAs. as the corporation beg_r~s to move away from the long-held positron of promotmg from withrn and do• '.?g all rts. ~>wn training. to hiring outside experts, reports staff punl1c relations manager Nancy Harlow. This mllux of new ~kills, she says, will help the company remam compct1trve in the deregulated env 1•

He cited the retail industry as a field where people with a wide variety of under- graduate degrees find work, and no gradu- ate credentials are required . ~here do MBAs find employment? Ac• cordrng lo 71,e Official Guide to MBA Pro• grams, Admission and Careers, published by the_Graduate Management Admission Co~ncil, the areas where po ,itions are available mclude: accountmg, planning/

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