Crunch This

Newsweek, August, 2006 by Tara Pepper

One little-known aftershock of the corporate scandals that began with Enron was an M.B.A. backlash. At a time when companies were scrutinizing every penny they spent, they also questioned the value of advanced business degrees, once seen as a ticket to the fast track in the business world. The scandals were the "tipping point," says Joel Podolny, dean of the Yale School of Management.

Afterward, as companies began to hire fewer M.B.A.s at lower pay scales, applications to business schools worldwide fell dramatically, by 20 percent between 2002 and 2005. The result was an industrywide identity crisis, which had insiders questioning every aspect of their schools and reaching a brutal verdict: they had flunked Business 101, failing to keep up with change or to respond to...

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