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MAYBE THAT MBA ISN'T USELESS

Are business-school students dreading the future? Do they regret the time and money spent? The Economist's senior business correspondent checks out the scene at the Haas School of Business in Berkeley ...

From ECONOMIST.COM

Walking up the hill from the subway towards the Haas School of Business at the University of California’s Berkeley campus, I experienced a wave of nostalgia. Five years ago almost to the day, I graduated from the MBA programme of another leading American business school, where I sweated and swotted my way through course after course and exam after exam in pursuit of the coveted initials to put on my curriculum vitae. After graduating, I stepped back into a world that had rebounded from the dotcom bust and was growing like Topsy.

Today’s generation of MBAs face a much grimmer scene—a salutary reminder that the business cycle will always be with us, and that great booms can be followed by even greater busts. At Haas, the school’s buildings themselves seem to echo this message. Wandering around the campus, I come across the Andersen Auditorium, named for Arthur Andersen, an accounting firm that collapsed in the wake of the Enron fiasco. Then there are the Bank of America Forum and the Wells Fargo Room—both named for financial institutions that seemed invincible but now find themselves in stormy waters.

I wondered whether I would find today’s students at Haas depressed by the downturn. Will they be lamenting that they have wasted their time and a considerable amount of their money on a qualification that might be worth a lot less than it was in the past? And will they be worried about finding a job at the end of their studies?

But these and other questions will have to wait; first I am scheduled to attend a class taught by Teck Ho a professor of marketing. He is lecturing on conjoint analysis—a marketing tool that allows companies to work out how much value consumers attach to various combinations of attributes in a product, such as the battery life, screen size and processing speed of a portable computer. As formulae fill the blackboard, I casually survey the surnames of some of the students on the cards in front of them: Palan; Duang; Bornheimer; Menendez; Kim; Cronk; Lakhami. Like its peers, Haas boasts a remarkably diverse student body, allowing students to learn from each other as much as from their textbooks and professors.

Some of the students’ faces are hidden behind their computer screens, which reminds me of a classmate at my alma mater. While pretending to take notes during lectures, he was in fact surfing online gambling sites, one of which he joined after graduation. But even my former classmate would probably have listened carefully to Professor Ho, who knows exactly how to get and keep students’ attention. Early on, he notes that he has used conjoint analysis frequently in lucrative consulting jobs. Drooping heads snap to attention. Later he emphasizes another point by saying “This is ching, ching, ching”. The onomatopoeia signalling that serious money can be made here provokes furious tapping and scribbling.

There is also another guaranteed method of getting students’ attention. Refreshing the class’s memory of a statistical technique known as regression analysis, Professor Ho brings up something he calls the “The Marital Happiness” function. Deadpanning, he claims this is 1.05 + 0.49 x (S-F), where S is the number of times a married couple has sex and F is the number of times the couple fights. The room promptly dissolves in laughter. But the class is no joke: in the space of an hour and a half, he has provided a brilliant primer in a core marketing skill and multiple examples of companies that have profited by using it in the real world. This combination of theory and practice is what makes spending all that money on business-school tuition fees worthwhile.

Later in the week, I get acquainted with the Haas “Consumption Function”. Throughout the year, the school hosts a series of these after-hours celebrations at which students from a particular region or country get together to present aspects of their homeland to the rest of their classmates. The one I attend has a Chinese theme, with delightful demonstrations of regional music, cuisine and artwork. As the drinks start to flow, Professor Ho, who hails from Singapore, turns up in traditional dress, much to the delight of the students. I’m careful to leave after only a couple of drinks so that the consumption function doesn’t interfere with my personal-utility function.

Picture credit: Jessica_Mah (via Flickr)

(This is part of a week-long correspondent's diary about the Haas School of Business, published on Economist.com.)