Leading Business Schools Coach Students On Crisis

With major Wall Street firms closing, business schools around the country are preparing their students for big changes in the financial industry. Deans at three leading business schools — George Washington University School of Business, Florida A&M University School of Business and Industry and Simmons School of Management — discuss changing the outlook for students.

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MICHEL MARTIN, host:

We decided to continue our conversation about the ongoing economic turmoil with a view from three business schools. In recent years, the business degree has been considered a one-way ticket to a life of very high wages. Now that was probably an exaggeration but we wondered what those coveted degrees mean now that Wall Street is having a meltdown. How the leaders of these schools thinking about this and talking about this and teaching about this even as we are in the middle of this crisis? To discuss this, we have gathered a diverse panel of business school deans. I'm joined by Murat Tarimcilar, he is the associate dean of Graduate Programs at George Washington University School of Business. Lydia McKinley-Floyd is the dean of Florida A&M University's Business School. She's offering us a perspective from the south and from the SBUs. Up north in Boston, we're joined by Deborah Merrill-Sands, she's dean of the Simmons School of Management. Dean offers programs to - I'm sorry. Simmons is a women's college offering both graduate and undergraduate programs. Thank you all so much for joining us.

Professor MURAT TARIMCILAR (Associate Dean, Graduate Programs, George Washington University, School of Business): Great to be here.

Dr. LYDIA MCKINLEY-FLOYD (Dean, Florida A&M University, Business School): Thank you.

Dr. DEBORAH MERRILL-SANDS (Dean, Simmons School of Management): Thank you.

MARTIN: I am going to ask each of you very quickly what's the morale at your school? What's the morale among the students and among the faculty, Dean Murat?

Prof. TARIMCILAR: I think a bit panicked from the students. Particularly the second year MBA students who are going to hit the market in a few months. They are already in the process of interviews and some of them had some offers and now, they have to worry about what to do. But I think this is more of a panic for schools that are considered as the feeder schools for Wall Street more than us. We are not considered as one of them. About 16 percent of our students go to Wall Street. But I can imagine some of the east course schools that are risking - be pursued by the Wall Street are scrambling right now.

MARTIN: Dean Lydia McKinley-Floyd, what about you? What's the morale?

Dr. MCKINLEY-FLOYD: Well, it's kind of - it is kind of panicky. Not exactly though. We have just launched a new initiative, a Wall Street initiative. Where we want to send 100 students to Wall Street by 2010, and this summer, we had 40 students on Wall Street, which was a record for us. And of those students who were there, the majority were with the investment banking firms, and eight of them got offers. And so they were very excited and of course, none of them have been rescinded yet, but other students who were going up and who were interviewing have had their second round of interviews canceled. And so there is a great bit of concern among those who have an interest in investment banking in particular.

MARTIN: Deborah Merrill-Sands?

Dr. MERRILL-SANDS: Yes. I would say that our students are right now are very cautious-perspective. Again, we're also not a feeder school to Wall Street but I think we're beginning to see the ripple effect from the crisis in Wall Street on many other organizations. Interestingly about 30 percent of our students actually are getting their MBA to be able to work in large, complex not for profits. And those organizations are having - experiencing significant repercussions from the current economic crisis and are downsizing and cutting jobs as well. It's the hidden story in the crisis that's unfolding right now.

MARTIN: I want to talk about this. I mean we're obviously going to just talk for a couple of minutes and then take a break and come back so we can continue our conversation, but that's one of the things that intrigued me because many of you teach people who - for whom this is their - this is the first generation that may have been - had access to these kinds of jobs to begin with. I mean, there are only 13 female CEOs of Fortune 500 companies. There's only one African-American CEO remaining of a Fortune 500 company and obviously, we're all in the middle of the story so it's hard to see how it's going to shake up. But Dean Deborah Merrill-Sands, are you - I'm just curious if you're concerned that this opportunity is now being foreclosed when you're just - some women are just starting to really make a beach head in these areas?

Dr. MERRILL-SANDS: Well, certainly on the Wall Street side, I think it's very concerning because Wall Street has been one of the toughest areas for women to move into leadership roles. And we just lost in the last six months three of very visible women leaders in Wall Street among very few. So, their, you know Sallie Krawcheck, for example just - was announced that she's leaving Citibank today. And so what that suggests is I think it reinforces an image for our MBA students that the road to the top, particularly in Wall Street and in the financial services industry, will only be steeper after this.

MARTIN: Lydia McKinley-Floyd?

Dr. MCKINLEY-FLOYD: I would say the same. You know, one of the reasons we launched this initiative was because of the dearth of African-Americans on the street. And so we have partners are very excited and helping us to help eliminate some of those deficiencies, and so our students are very eager, very excited and now, I think they are being extremely cautious. I think it's really important that our students have these opportunities and it's unfortunate that when we have such an initiative going and so many people interested, that this event has happened now, at a very unfortunate time in our curriculum.

MARTIN: Dean Murat, your school, I think your student varies - very international and I'm just - and I don't know if they even think about it in the same way. But for some of your students, it's probably the first - they're probably the first people in their families to even consider these careers.

Prof. TARIMCILAR: Well, not necessarily actually. I think our students are not being that profiled. They come from a quite an experienced background on that issue.

MARTIN: I think some of your students are mid-career anyway.

Prof. TARIMCILAR: Mid-career, exactly. And I think the issue for the MBAs and you have to give credit for them for their creativity. I mean, there is certainly a concern but they know that Wall Street is not everything. We know the ripple effects are going to be negative in the other ends of - the other sides of the industry as well. But, our career services already started a new milestone program, asking students whose primary objective was financial industry. Telling them, asking them and preparing them for other industries right now. And I think they will cope with it. We have to trust their judgment and their enthusiasm upon.

MARTIN: We're going to take a short break and when we come back, we're going to continue our conversation with our three business school deans in just a moment on Tell Me More from NPR News. I'm Michel Martin.

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MARTIN: I'm Michel Martin and this is Tell Me More from NPR News. I should mention that normally at this time, we hear from the Mocha Moms. We plan to bring you that conversation next week. But we have been spending our time this program talking about the country's ongoing economic crisis. We've been speaking with the deans of three schools of business to get their perspective. We're going to continue that conversation now. Joining us are Murat Tarimcilar, he is the associate dean of Graduate Programs at George Washington University School of Business here in Washington D.C. Lydia McKinley-Floyd is the dean of Florida A&M University's Business School and Deborah Merrill-Sands is dean of the Simmons School of Management in Boston. Dean Merrill-Sands, how are you teaching this? I mean, we're in the middle of this. If we keep using words like unprecedented and so forth, how are you teaching this?

Dr. MERRILL-SANDS: You know that's a very interesting question. I was talking with some of my faculty yesterday and it is clearly a very rich teaching opportunity. One of the things I was most impressed with was that almost in every disciplinary area, the faculty are finding ways to take this situation as it unfolds in new and unexpected ways everyday and bring it in to their courses. So for example, in marketing, there's a blog going on about what was the responsibility of marketing in pushing the sub-prime mortgages and luring customers into accepting them when it really wasn't in their interest. And in leadership, we're taking about, you know, how do leaders balance the drive for short term results with their absolute accountability to the sustainability of their organizations over the long-term in a broader range of stakeholders. So, from every perspective, as one would expect obviously in finance and accounting, there's adaptations being made to bring this new situation and people realize that they're living through an historical moment. But in every discipline, there's a way to look at the situation that enriches the curriculum. And I find the faculty are being innovative.

MARTIN: Dean Lydia McKinley-Floyd, I'm interested in your perspective on this because it seems clear, the data suggest that the minority communities, African-American and Latino communities seemed to have been targeted for the sub-prime mortgages which are at the - at least at the leading edge of this economic crisis. How is that being discussed?

Dr. MCKINLEY-FLOYD: Yes and I would have to agree with Dean Sands. Indeed we're using these opportunities to teach in the classroom but more importantly, today, even as we speak, we're having a forum where all of our students will be brought together and they will - they have a panel of the students who were on Wall Street and this was planned actually before the whole crisis really hit. And so the students were going to just talk about their experiences and you know, really give a real pep talk about, you know, how great opportunities are on Wall Street, and I was a little concerned, I didn't want them to be too bullish in their discussions but I think now I have to be concerned that they may not - they may be to bearish.

But the students themselves were talking about this, they are blogging, the faculty are involving everyone in conversations and we also have a number of corporate partners who are very, very close to us, who have been sending down their senior execs to have these discussions one on one with the students in small groups. And so it's very, very vibrant in that area. I mean, a lot of things going on energetic, but more importantly, I think as it affects our curriculum, we really have to look at how are we going to be teaching going forward? What are some of the things that we're going to be emphasizing? And I think this really is a call for a more astringent look at our ethics courses, social service, opportunities for our students so they don't have a one-sided Wall Street greed if you will philosophy.

MARTIN: Greed is good.

Dr. MCKINLEY-FLOYD: They look into this...

MARTIN: Famous phrase.

Dr. MCKINLEY-FLOYD: Yeah. Right.

MARTIN: Do you think that they have? Do you think that they have? That there's been a bias in recent years toward a sort of - toward one side of the ledger if you will with maximizing profit's the only...

Dr. MCKINLEY-FLOYD: I think the...

MARTIN: I mean, obviously the goal of any business is to maximize profit and value for shareholders but do you think that there's been an attitude that in recent years that anything is acceptable as long as it achieves that particular goal?

Dr. MCKINLEY-FLOYD: No. I don't think that has been the case where anything is acceptable, but certainly the lure of Wall Street has been the opportunity to amass great sums of money and to live an affluent lifestyle. And I think that needs to be counterbalanced by some of the other things that society and certainly this fall out from the sub-prime and this whole subsequent fall out in the markets causes us to pause and really think about the other important things in life and looking after one another. This is high deal role.

MARTIN: Forgive me for interrupting. Dean Murat, not to put you on the spot here. But I wonder as a person who's teaching the students - and I understand that you're not a feeder for - a feeder school for Wall Street. But as a teacher, do you feel any sense of responsibility for perhaps failing to shape adequately the ethics of some of these leaders who might have participated in pushing inappropriate products on people who should not have had them. Is that sort of part of the conversation? Do you think that ethics needs to be surfaced more - enforced more as part of the curriculum?

Prof. TARIMCILAR: The short answer to that is yes, of course. But I don't want to jump on that kind of conclusive wagon and claim that the reason for this meltdown is bad ethical behavior. Most likely this, I think, is a combination of bad management, bad regulation and some of it, unethical behavior as well. And we're going to find out. One of the kind of challenges in the academia is we're unlike the political establishment. And even in the journalists, we're trying to be very careful about expressing opinion particularly in the classroom about something that's already going on. I think we're going to take our time a little bit more, find out what really went wrong, and we're going to educate our students. But on the other hand, just like Dean McKinley-Floyd's school, we have hangouts. And being in Washington, obviously, we have this wonderful access to the policy makers and the executives of the financial market companies. And we have hangouts - we're trying to get the students to interact with the people from the marketplace. But let me give you an example. It's been interesting one I...

MARTIN: I didn't miss your (unintelligible) journalist, by the way, expressing opinions. I just want to make sure I heard you, but...

Prof. TARIMCILAR: So - but on the other hand...

MARTIN: But how can you possibly teach without expressing an opinion? At some point, you have to sort of - you have to make an assessment of what you think the relevant factors are.

Prof. TARIMCILAR: And that's where I think the faculty is very careful. Saying that look, this is my opinion. But let's wait and find out. And I'll give you an example because I was just talking to a colleague of mine, Robert Wyner(ph), who teaches global perspectives course and the global issue is very important for us. And he was saying - in the last two weeks, he's basically reserving about an hour of his lecture and talking about this crisis. But in a very interesting way, he's basically saying look, the way this crisis is affecting the rest of the globe is not just like the United States.

For example, he gives an example of the Lehman Brothers in England. The bankruptcy in England is not like the bad chapter 11 in United States. In chapter 11 in the United States pretty much protects the debtor. And in United King - in Britain, it is for the creditor. They try to protect the creditor and the government actually assigns an administrator. Right now, the Lehman Brothers in England is not governed by or directly managed by the Lehman Brothers people, which is going to affect the way the layoffs are, the way the restructuring is. So, he's trying to point out this kind of factual data and kind of expect what's going to happen rather than passing their judgment, which could be a little dangerous right now.

MARTIN: And Dean Sands, what would you (unintelligible) think this might, you know, shift the prospective of some students in terms of what they think a good career is or sort of a good contribution would be? How - can you talk a little bit more about that? I mean, how might the schools support? What avenues of study or areas of research do you think might be opened up as a result of this crisis?

Dr. MERRILL-SANDS: Well, I do think - contrary to the two other deans, to a certain extent, I do think this really hones in on the need to teach ethics in new ways. Certainly, all of us, after the Enron crisis, strengthen our attention to ethics in our curricula, and a lot of that was around governance issues and regulation issues. And I think what we're seeing now is that bad practices became institutionalized and people then began to accept them as normal. And this is really the point of view of Professor Donaldson. It worsens and it just becomes something we all live with. And part of what we feel is that we need to teach our students as leaders, to have the skills and knowledge when they see those institutionalized practices, to be able to call them out and if they're in the leadership role, to be able to transform their organizations and interrupt them because it's the quiet accumulation that's the danger that has under pinned the whole subprime mortgage crisis. It became acceptable.

MARTIN: Dean Floyd?

Dr. MCKINLEY-FLOYD: I don't think it's counter to our opinion. I would agree with you wholeheartedly. And I think the more that our students are engaged and this is why I am saying some social service, some community service, the more that our students are engaged in communities outside of the business community, they began to have a sensitivity and an appreciation for people's welfare, and that's very, very important. And from ethical perspective, I think they have a different epistemology, they have a different view of the world and I think that that would help very much in the kind of leaders that we form.

MARTIN: One of the things I've been curious about, we've talked a lot about the sort of financial insurance in the world, that these are the complex financial instruments played in this crisis. Do you all feel you understand it? I mean, do you feel you understand what actually happened here? I mean, really, seriously, Dean Murat, do you?

Prof. TARIMCILAR: Well, I'm not a finance professor, so I certainly do not understand what's going on. I'm sure - hopefully, some of my colleagues do. However, again, I'm going to come back to the same issue that I think we're going to find out a lot. But let me clear something out because Dean Merrill said something about disagreement the ethics. We just rolled out a new curriculum and the whole curriculum is actually designed around ethics, about personal integrity and about corporate governance. And we're very proud of the new curriculum and this is kind of revolutionary for us because we went and questioned the role of university in the business world and we said if we're going to offer an MBA degree, if we're going to offer a professional management degree, it is kind of almost unethical for the university to come and say look, we have nothing to do with the ethical issues in the marketplace. So in our new curriculum, we are emphasizing the character of a leader as well. It's very value-based and ethics is a big component of our new curriculum.

MARTIN: Dean Merrill-Sands, final thought from you.

Dr. MERRILL-SANDS: Well, I'm sorry if I tried to distinguish us. I think it's very important that all three deans have focused in on what our role is in educating ethical leaders. So I think that's a major step forward. And part of that ethical equation is how do you judge successful leadership? And I think the economic crisis today has shown that a short-term - a short tenure for evaluating the impact of leadership can often be very misleading. And I think a lot of our students are concerned with the rewards that leaders of these high-flying institutions received at a time when now it's showing that the risk has put us in jeopardy.

MARTIN: Dean Floyd, very quickly, if I could get a final thought from you. Very, very quickly, if you would.

Dr. MCKINLEY-FLOYD: Yes, I just think that this has really, really given us a great teachable moment in receiving the time to do that. ..TEXT: MARTIN: All right. Thank you, Dean Lydia McKinley-Floyd, of Florida A&M University. Joined us from Georgia Public Broadcasting. Deborah Merrill-Sands is dean of Simmons School of Management. She is at WBUR in Boston. And Murat Tarimcilar is the associate dean of graduate programs at George Washington University School of Business. He joined us in our studio in Washington. I thank you all so much for speaking with us and good luck with the rest of the school year.

Dean TARIMCILAR: Thank you.

Dean McKINLEY-FLOYD: Thank you, Michel.

Dean MERRILL-SANDS: Thank you for the opportunity.

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