Thursday, May 31, 2018
Tuesday, May 29, 2018
Many schools experience a fall in overseas applicants, especially for two-year courses
Jonathan Moules MAY 28, 2018
Moving to the US to attend business school is something of a family tradition for Srinivasan Masti. His cousin relocated from Bangalore to Columbia Business School five years ago. His uncle had already made a similar move and now teaches at New York University’s Stern School of Business.
But after weighing up the options of job opportunities versus course costs — and hearing warnings about the challenges of securing the necessary H-1B work visa, Mr. Masti chose Germany’s ESMT Berlin. “For many years in India, there was a fascination with going to the US to get an MBA,” Mr. Masti says. “But that has diminished.”
Falling demand for the traditional two-year MBA is a big concern for US schools, many of which suffered a decline in applications between 2014 and last year, according to data compiled by the Graduate Management Admission Council, the business school entrance exam administrator.
Given that applications have been rising at the same time for rival one-year MBAs offered by many European business schools, the suggestion by GMAC is that US schools are suffering because of their longer course length. The cost of tuition fees at top US schools, which have risen faster than salary increases achieved by students after graduation, is another concern for applicants.
Quality is another factor: US schools at the top of rankings have record numbers of applications, while the majority further down must work harder to recruit students.
However, research by the FT among a selection of US schools on its Global MBA Ranking found that, for many suffering declining applications, it is overseas students like Mr. Masti who are losing interest in the American MBA.
Eight of the 17 US schools in the FT list approached for detailed admissions data said that application numbers were down. At all but one of these, applications from US citizens have increased in the past year, while interest from overseas applicants has fallen.
The number of Americans applying for the two-year MBA degree at Carnegie Mellon University’s Tepper School of Business, for instance, increased by 5 percent in the current admissions cycle. But overall demand for the course was down 9.8 percent because applications from overseas dropped 16.8 percent.
Tepper’s dean, Bob Dammon, blames a growing reluctance among US employers to hire foreign nationals. “The job options for international students in the US [are] declining,” he says. “However, these are exactly the people who we want to keep in the US as part of our workforce.”
At the University of San Diego School of Business Administration, a 2 percent increase in applications from US residents this year contrasted with a 31 percent drop in applications from other countries. This matters because 59 percent of the school’s MBA class is from outside the US.
China and India are the two largest sources of overseas students on San Diego’s MBA course, but applications from the two countries were down 34 percent and 4 percent respectively.
Kacy Hayes, the school’s assistant dean of graduate programmes, says some students may be put off by a perception that the US is less welcoming to foreign nationals. But there are other factors behind the drop, she says. For instance, many admissions teams in US schools now use technology to detect applications from China that make fraudulent claims.
The growth in reputation and capacity of Asian schools has meant students from that region may be less inclined to study overseas, according to Ms. Hayes.
Aditi Sharma, a former consultant at Cognizant Technology Solutions, near Delhi, did plan to study abroad for her MBA, and was offered a place at Hult International Business School’s San Francisco campus and also at the UK’s Durham University Business School.
She opted for the latter, and the reputation of the UK education system, Durham in particular, was the important factor in choosing its course, says Ms. Sharma. Her fees are £23,000 ($31,000) after deductions from scholarship funding: substantially less than the $75,000 she would have paid at Hult.
Work visas are still a problem. In the UK, overseas students have only four months to find work after graduation, while if she had chosen to study in the US, Ms Sharma would have been able to stay for a year after graduating under the Optional Practical Training programme.
For many students, choosing a place at a business school outside the US is a positive choice.
Masti, for example, chose a German MBA over a US course primarily because of the benefits of moving to Europe’s largest economy, and the option to work in other EU countries without having to apply for separate visas every time he moves.
“The economy here is booming,” he says. “And the jobs are good quality.”
From the FT
Sunday, May 27, 2018
BY LUKE ANTHONY PEÑA May 09, 2018
EXECUTIVE DIRECTOR OF ADMISSIONS AND FINANCIAL AID
Happy May, friends! May is a fascinating time for me and my Admissions colleagues, as we balance looking at both the present and the future. We’re still working to evaluate, select, and enroll great T’20s, as we fill the final seats in the class. At the same time, we’re gearing up to travel the world and meet you and aspiring T’21s in the coming months. We’re also working on revising and refreshing significant parts of our evaluation process and timeline. So let’s take a look at what’s happening!
WHAT’S UP AT TUCK?
There’s incredible enthusiasm at Tuck about our capital campaign for tomorrow’s wise leaders. This ambitious $250 million campaign is part of Dartmouth’s $3 billion campaign, and will strengthen our people, programs, and places. Each of these priorities advances our mission, and enhances your opportunities to contribute and thrive as a student. You may be most immediately interested in the commitment to growing our scholarship resources. I recognize that financing your MBA is an important consideration. If you want to be at Tuck, I want you to have the financial resources you need to be here. I’m thrilled that the campaign will bring us closer to that goal. I hope you’re excited about how the campaign will better equip you to be successful at Tuck and beyond. Don’t just take my word for it, hear how Dean Matt Slaughter and our students describe it.
WHAT’S UP IN ADMISSIONS?
My colleagues and I want your Tuck application experience to be as enjoyable and stress-free as possible. One of the least enjoyable, most stressful parts: the wait. I don’t want you waiting for your admissions decision any longer than necessary. So the team and I looked at our admissions rounds, and one number jumped out…100. That’s the number of days between our November round application deadline, and when we give you a decision—the longest wait of any round at any of our peer schools! We can do better. You’re hearing it here first. We’re “sun setting” the “applicant-unfriendly” November round. We’ll now offer three admission rounds with more applicant-friendly turnaround times: one in late September, one in early January, and one in early April. We’re saying goodbye to the “Early Action” designation in our first round, which is no longer early and required a higher enrollment deposit from you. And our rounds named for months? We’re simplifying that too. You’ll now apply in Round 1, Round 2, or Round 3. Exact dates are coming soon—I’ll have them for you here in June!
WHAT’S UP WITH ME?
Admissions directors assess your professional trajectory and impact, but we need our own career growth and development too. Later this month, I’m participating in Tuck’s Leadership and Strategic Impact program, supported by Tuck Executive Education and our great faculty. Why share this with you? I want you to know how important lifelong learning is to contributing and thriving at the Tuck School, both for administrators like me and for aspiring students like you. When my colleagues and I read applications, we’re looking for evidence of your hunger and desire to grow and improve. This goes beyond others’ recognizing and rewarding your performance; it reflects your active pursuit of growth opportunities. If your organization offers professional development and leadership programs, build the case for your inclusion! If organizational opportunities are limited, find coaching and mentorship through your broader network. Professional development helps us all provide better service to our clients, good leadership to our teams, and increases our confidence in what we know while remaining humble about what we do not. I assure you that you’ll be a stronger applicant and a more prepared leader when you commit to your growth and development.
Speaking of commitment, I’m making a renewed commitment to be more active on Twitter. Follow me there if you want to see what I’m thinking in between blog posts, or to connect with me directly. See you there, or back here in June!
Business school students discuss the future of the accountancy titans
The Big Four accounting firms, Deloitte, KPMG, EY and PwC, have successfully maintained their power and influence, despite repeated crises. But now British MPs have demanded that the Big Four be referred to the competition watchdog for a potential break-up following the collapse of Carillion, a government contractor.
Should the Big Four be split up? We put the question to MBA students from some of the world’s top business schools for their views. Join in the discussion in the comments below.
ANGELA LU, OLIN BUSINESS SCHOOL — WASHINGTON UNIVERSITY IN ST LOUIS
Breaking up the Big Four will neither increase auditor competition nor restore auditor independence and rigour. The question of “should” is irrelevant. Decreeing a split in these firms is pointless, as it would not solve the root problem. Plus, implementation is impractical as the Big Four’s operations are global and governments can only place restrictions within limited sovereign boundaries. Also, previous attempts demonstrate that “breaking up” the firms is not a lasting remedy for lax auditing.
Audit quality has been compromised over the past half-century by the addition of other revenue-generating services (ie, consulting), the increase in hires with non-accounting backgrounds, and the growing emphasis on maximising revenue. The result: significant cultural change within the firms.
Regulations need teeth. Current regulations are unenforceable and at the core of this issue is a lack of competition
Julie Kellman, Olin Business School
To maintain business, firms are more willing to go along with a client’s desire to avoid the standards rather than take a hard stance on observing them. The latter is a mark of true professional integrity. If we aim to restore the integrity of audits, we should require all professional staff at accounting firms to be certified as public accountants, injecting renewed respect for ethical practices. That is the first step to cultural reform and behavioural transformation.
MOUCHUMI BHUYAN, ESSEC BUSINESS SCHOOL, FRANCE
The Big Four enjoy considerable lobbying power that would be reduced by breaking them up and this may help in stricter repercussions in auditing catastrophes.
However, it would be a mistake to think that simply breaking up the Big Four would be enough. The regulatory framework needs to be fixed soon — unless this barrier to entry is reduced, there will be a vacuum for truly multinational auditing firms that will sooner rather than later be filled up by an oligopoly again.
JOSEPHINE AUDREYLIA, ALLIANCE MANCHESTER BUSINESS SCHOOL
Breaking up the Big Four firms will not solve the problem arising from audit scandals.
This is because the audit firm and consulting firm fall under the same brand, but operate independently. In fact, in some countries, each practice is a separate entity. When both practices serve the same client, the Big Four firms have ringfencing mechanisms which restrict information-sharing between them. In addition, when the client uses both practices, the contracts are structured separately, as if purchasing from two different vendors.
JULIE KELLMAN, OLIN BUSINESS SCHOOL — WASHINGTON UNIVERSITY IN ST LOUIS
Since the industry has failed to self-monitor, more effective regulations are necessary. But regulations need teeth. Current regulations are already unenforceable and the lack of competition is the core of this issue. The Big Four should be broken up to encourage competition, allow regulations to be enforced, and correct systemic failures.
The ‘big four’ auditors have life far too easy
What stands out here is the conflicts of interest inherent in professional services. All things considered, the Big Four are comparable. Corporations turn to the Big Four tier for legitimacy (a recognised seal of approval on their numbers) and seek an easy audit process. One way to differentiate is based on ease of client experience, a short-term factor that incentivises firms to sign off on flattering financial figures.
Unfortunately, the numbers have to add up eventually — which is glaringly obvious when suddenly the value of Carillion’s contracts diminished by £1bn .
More competition would allow regulations to act as intended: by penalising and correcting systemic failures as they occur.
AKOSUA BRENTUO, ALLIANCE MANCHESTER BUSINESS SCHOOL
I am not convinced a break-up of the Big Four professional service firms, by spinning off the audit functions as standalones, will completely alleviate the conflict of interest problem prevalent in the industry.
Operating with “Chinese walls” is embedded within the operating models but has not prevented companies from engaging in conflicting activities between audit and consulting.
Splitting up the Big Four can provide some temporary structural reforms that could contribute towards solving the conflict of interest problem. However, I believe in order to effectively combat the issue and protect its relatively vulnerable stakeholders, additional regulatory reforms will be required.
A break-up, in addition to regulatory reforms such as statutory rotation of auditors, could help reduce the problem.
If the firms are merely broken up, it will be a matter of time before they find legal and innovative ways to work with their consulting counterparts and we will be back to exactly where we are now.
From the FT