Favorite Darden Class

Selected 3rd & 4th Quarter Books

Selected 3rd & 4th Quarter Books

It seems that with each new quarter I have a new favorite Darden class. Given my engineering background, I expected that the quantitative courses such as finance, accounting, and operations would be my favorites. And indeed, this was the case during my first couple quarters at Darden. It was also no surprise that I earned better grades in these quantitative courses.

By the first quarter of my second year it was becoming clear that despite my lower grades in the leadership and strategy courses, I was learning far more in these ‘softer’ courses. I have since embraced the leadership and strategy classes and am taking some of the most demanding offerings. The photo above shows a subset of the books I am reading in the 3rd and 4th quarter of my second year for these ‘soft’ classes. I have now read about two thirds of these books from cover to cover and will finish the rest before graduating in May. There are five additional books for class that I have read on my Kindle (love the Kindle). My pace of reading has increased from about two books per year prior to attending Darden to my current rate of a little over two books per week.

Some of my favorite Darden classes include:

Business Ethics Through Literature – in this course we read modern literature and discuss the underlying ethical business implications in class. Some of our reading included: The Great Gatsby, A Thousand Splendid Suns, Never Let Me Go, and Things Fall Apart.

Managerial Psychology – this course covers 14 books on psychology. Thus far, the books have focused on core psychological principals rather than the best selling ‘pop’ culture type books. Some notable readings during my third quarter included: TA Today, You Are What You Say, The Evolving Self, Mans Search for Meaning, and Social Intelligence. I’ll probably write another blog entry on my key leanings after finishing the course.

Readings in Sustainable Business and Creative Capitalism – the term ‘sustainability’ is a buzzword (again) and whenever this happens some of the meaning behind the concept is lost. The idea of sustaining business performance or investment returns is age old. This course begins with a historical review of how business and societies have failed. We then discuss ways to structure businesses with sustainability in mind. Some of our readings include: Collapse, Hot Flat and Crowded, and The World Without Us.

Typical Day at Darden – Video

This is a video from one of my typical days as a Second Year Darden student. I filmed this video on December 9th and it includes clips from first coffee, classes, and the halls of Darden.

MBA Rankings Management

The level of rankings management varies dramatically across business schools.  Since improving a schools rank and quality of education are not 100% aligned, each dean must balance these objectives and set an agenda for the organization.  My thinking is that deans who move up through the academic community are probably more biased towards quality of education than deans who are recruited from industry (e.g., previous CEOs).  There is no clear answer on which philosophy is better for students in the long run, and the best practice is likely some combination of the two philosophies.  For now, I’ll hold off on discussing the pros and cons of rankings management and instead use this post to share some of the practices I have observed at schools focused on rankings.

First, in most instances a school can improve its rank and quality of education with the same action.  Take the IT department as an example.  By providing students with excellent service, the students will provide favorable feedback on the BusinessWeek survey which will in turn improve the school’s rank.  The tough decisions come about when an effort to improve a school’s rank has negative consequences on the school’s quality of education.  Below is a list of such practices that I have observed at different business schools.  To the best of my knowledge, most of these methods are not being aggressively pursued at Darden.

Increase marketing - this is an easy way to improve a school’s selectivity metric, which is a key component for several rankings.  With an effective marketing effort many schools are able to increase the number of applicants.  One school has had recent success with a targeted marketing campaign in India.  My understanding is that the school received significantly more applications from the country yet still accepted the same number of applicants – thus improving selectivity.  The downside of this approach is that by spending more money on marketing there is less money available for other uses.

Increase scholarship money - offering scholarships is an effective way to increase yield.  In addition to the direct rankings improvement from a higher yield, there is a secondary effect from the increase in selectively necessary to maintain a specific class size.  Spending more money on scholarships is one way to increase yield.  Another consideration is how to distribute scholarships.  One top ranked business school provides around 90% of accepted students with a small scholarship of around $5k to $10k.  This is well received by applicants and gives them an additional reason to attend the school.  Another top 25 school has been known to bid for students by increasing the value of scholarship offers as the decision deadline approaches.

Increase focus on research - well published research faculty can significantly improve a schools ranking.  Unfortunately, excellent teaching ability and excellent research ability don’t often go together, and there are very few professors with both skills.  Thus, schools with a strong emphasis on research sometimes suffer in teaching quality.  Some schools relieve their best researchers of the teaching ‘burden’ by providing teaching assistants for use both inside and outside the classroom.

Train students to answer surveys - all rankings use surveys and in some cases they survey current students and recent alumni.  It’s generally against the rules for schools to directly advise students on how to complete these surveys.  However, schools can influence the surveys by helping student groups ‘teach’ other students how to best respond to questions.

Modify class demographics - most rankings consider elements of the class demographics and these elements can be easily altered by admissions.  Some approaches that come to mind include 1) increasing average GMAT, 2) increasing international diversity, and 3) increasing share of students interested in consulting.  While these measures are easy to change, there is often a subsequent negative effect from each initial improvement.  For example, a school might reject a ‘well rounded’ applicant in order to accept an applicant with a higher GMAT score.  This decision may come back to haunt the school if the high GMAT student has trouble finding employment and thus negatively affects the placement statistics at gradation.  Increasing the share of students interested in consulting is an interesting opportunity because this is one of the highest salary industries (bankers have lower salaries and higher bonuses) and the rankings do not adjust for differences in industry preferences between schools.  (I’ve written more on this topic in my MBA starting salary post.)

Schools that focus on rankings management may use these and other techniques to improve the school’s position.  One area worth consideration is how each of these techniques aligns with ones’ goals for an MBA program.  There may be vastly different consequences for someone interested in a top ranked MBA degree compared to someone interested in the quality of their education.

Fall Colors

Charlottesville’s fall colors are exceptionally vibrant this year.  Kristy and I hiked up Old Rag (trail details) with another Darden couple two weekends ago and captured the following photos.

Old Rag is a 10 mile circuit hike located about 30 miles northwest of Charlottesville.  We left for the hike at 9:30am and arrived just in time to grab the last parking space at the trail head.  Apparently we weren’t the only people thinking this was a good weekend to enjoy the colors.  It took us about three hours to hike the four miles leading up to the summit and another two hours to hike the six miles back to our car.  The summit approach was fairly slow going  as the last mile is a rock scramble and we frequently had to wait for other people at points where hand-over-hand climbing was required.

Our weather was perfect and the hike provided some much needed exercise.  We all returned to Charlottesville physically tired and mentally refreshed.

MBA Starting Salary

Attending a highly ranked business school does not guarantee a high starting salary.  There is a relationship between a schools’ average salary and its position in the popular rankings (US News, BusinessWeek); however, a schools average salary is not a good predictor of an individual’s expected salary.  Take Wharton for example.  The employment webpage reports that starting salaries for 2007 MBA graduates averaged $110K with a range of $28K to $392K.  Someone expecting to earn the $110K average at Wharton would probably be a little disappointed with $28K.

Now don’t throw the baby out with the bath water.  In the right context, salary data can be useful in selecting a business school.  To help build this context, you may want to consider the following elements when analyzing salary data:

Compare salaries at the industry level – average salaries vary across industries and the mix of industry placement varies by school.  Consider a student interested in investment banking who is deciding between Darden and Harvard.  At first glance, the average overall salary at Darden is $100K (data) compared with $115K at Harvard (data), indicating that the student may prefer Harvard.  However, the average salary for investment banking jobs is the same for both schools: Darden – $95K, Harvard – $95K.  One contributor to the difference in overall salaries is the larger portion of students who enter into investment banking at Darden than at Harvard (15% vs. 11%), which effectively lowers Darden’s average overall salary.  Therefore, salaries should always be compared at the industry level to factor out the effect of dissimilar industry mixes between schools.

Account for geographic trends – in much the same way that a student body’s industry mix will affect average salary, the geographic mix of jobs will impact a schools average salary.  For example, international jobs tend to have a lower salary and can pull down the overall average.  While probably not a major factor, looking at where students accept jobs will provide a better understanding of the schools’ salary data.

Consider student demographics – a student’s work experience can significantly influence their starting salary.  For example, someone who worked in consulting for 5 years before returning to business school will probably secure a higher starting salary than someone with 3 years experience in an unrelated industry.  Business school can help equalize differences in past experience; however, employers will still offer higher salaries to candidates with more relevant experience.  Thus, attempts should be made to identify the impact of a student body’s work experience on the schools’ average salary.  In light of the qualitative nature of work experience, reviewing a school’s class profile and thinking in terms of directional influences might be the most practical approach.

In consideration of these factors, it seems that marginal differences between businesses schools in average starting salaries (less than $10K) could be fully attributed to differences in student body demographics.  Perhaps a research study could attempt to isolate and quantify the impact of ‘MBA brand value’ on starting salary.  In the meantime, we seem to have overemphasized the importance of business school selection in determining an individual’s starting salary.