To address (these) problem(s), CSU San Bernadino has hired a task force that will oversee domestic and international recruitment efforts. The school has also overhauled its curriculum to focus on more entrepreneurial course work, a key characteristic when it comes to attracting international students.

The fact that the U.S. plays a bigger role in the global economy is yet another reason business schools are shifting their focus abroad. About 30 percent of full-time MBA programs reported an increase in international applications, compared with 18 percent in 2004. Of the countries supplying the most international applicants, Taiwan ranks first, followed by India, Korea, Thailand, Japan, Mexico and Turkey.

The University of Southern California has a thriving population of international MBA students. But the school has also seen a 20 percent decline in overall enrollment numbers of full-time MBA students entering between 2004 and 2005. Yash Gupta, dean of USC's Marshall School of Business, attributes the decline to shifts in the job market.

And because job creation has dipped significantly in recent years, enrollment numbers will likely continue their downward trend, Gupta said. But as China's and India's economies grow, the dean is confident he can improve enrollment at Marshall.

That also requires a shift in business school philosophy. "Ten years ago, a student came to business school with a passport, saying, 'This is how I'm going to make millions,"' Gupta said. "But the quick-buck mentality is going. Today, there is more humility. You have to earn your stripes."

Instead of adding accounting and marketing courses, USC is attempting to tap creativity. The school is focusing on strategies to help students manage innovation. To do that, Gupta is advocating that students work in groups and understand how businesses interact with their environment.

But that method isn't completely foolproof, from Mackay's perspective. The CSUSB business student said working in groups isn't always productive because the "cases we're studying are a little dated." For example, Mackay recently worked on a case study about whether an Internet presence is helpful for Company X.

Having spent the better part of my adolescent and adult life in and around business schools (my father was a business school professor, as well) I would have to say that what's being reported above is only the beginning of the changes that need to be made in modern management education. Attracting foreign MBA students from the world's developing economies is certainly one option, but only a stop gap measure, a way to keep the money coming in while the strategies are overhauled. If US schools want to keep US students interested in the MBA and thus be educators of the world, not the outside world, then they'll need to overhaul not only curriculum but also pedagogy. Chief among the needed changes is the division of labor among business school faculty along functional lines.

Anyone who has read much about modern organization theory knows that while functional organization is very effective in certain sectors of the economy, it does carry with it the hazard of the functional silo problem. This is especially the case in business schools where faculty often have very deep functional expertise in just one area of management studies, many time without anywhere as much practical experience in said area. When you put several dozen such experts together, the task of achieving cross-functional coordination and providing students with a cross-functional perspective on organizations is very difficult indeed. What you get instead is graduates who are, as a rule, smart as whip, but who have no view of firms as a whole. It is precisely this kind of graduate to whom many businesses have said "no thanks" in increasing numbers, preferring instead to uncover and train management talent on their own.

None of the above should be taken as either a hope or an expectation that the US business school will fade from existence. Far from it, business schools are very vibrant and exciting places. This is just a slump from which they will they emerge better and more capable, a slumber from which they will awaken.

Further Reading

Chapter Three of Gary Hamel's "Leading the Revolution" contains the most thorough and logical description of a business model I have seen anywhere. Inerestingly, in the introduction to that chapter, he applies concept of new business models to the subject of business education.

NewsWeek April 7, 2005 MBA Applicants are MIA: As tuition soars and the job market strengthens, some B-schools are downsizing -- and all are getting less selective.

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