Wharton, MIT Return to MBA Blackboard

BOSTON ( TheStreet) -- Russell Hansen's job as a vested, union-protected youth adviser at Boston's community centers kept him financially secure, but ultimately unsatisfied.

With his wife offering to support the two of them on her salary, Hansen quit his job and began pursuing an MBA last fall at Boston's Suffolk University. His first step toward a leadership role in nonprofit development coincided with the collapse of Lehman Brothers and Bear Stearns, and the ensuing recession.

"My finance professor specifically mentioned Lehman Brothers a couple of times because he lost money in the collapse," Hansen said. "There are still students who are all about maximizing profits and getting money for the shareholders, but all my professors have tried to stay in the middle and say that profits are important, but you have to approach them in an ethical way and look at it in the long term."

Hansen, his fellow MBAs and his professors are a microcosm of how business schools across the U.S. have dealt with failures in the banking (including bailouts of Citigroup ( C) and Bank of America ( BAC)), automotive ( General Motors ( GMGMQ) and Chrysler) and real-estate industries (mortgage-rate caps), the ethical failings of Bernard Madoff and Allen Stanford and the government's reaction to all of the above. Administrators and faculty are tearing up old lessons globalization and efficient markets in favor of behavioral economics and teachings from the downturn's principals players. Students, for their part, are questioning staff about the mistakes of the past while increasingly engaging their international classmates and turning to career development offices and old-fashioned legwork to ensure their future.

As Hansen and his peers enter the second year of both their MBAs and the financial crisis, they are shaping curriculum and helping their institutions redefine their missions. We asked seven of the top business schools in the U.S. how they and their MBA students have adapted to current uncertainty. Their approaches to addressing the crisis proved as disparate as the forces that yielded it.

Columbia Business School

Notable alumni: Warren Buffett, CEO of Berkshire Hathaway ( BRK.A); Vikram Pandit, CEO of Citigroup ( C).

Dean Glenn Hubbard tapped Professor Paul Glasserman to chair a faculty committee that has been looking at the school's response to the crisis and created a new course, "The Future of Finance," which includes a case on the collapse and future of the auto industry, a multi-course approach to addressing failures in governance and decision making that led to the crisis, and finding opportunity amid the wreckage. During the summer, former Lehman Chief Financial Officer Thomas Russo taught a course that cast students in the roles of politicians, media and shareholders during the crisis. "This reflected his view, which is one that our committee shares, that having some acumen on the role of politics is becoming increasingly important for financial institutions," Glasserman says.

The University of Michigan's Ross School of Business

Notable alumni: Stephen Sanger, CEO of General Mills ( GIS); Thomas Wilson, CEO of Allstate ( ALL).

Though the percentage of MBA students offered jobs upon graduation slipped from 95% in better times to 75% last year, Director of Career Services Al Cotrone credits the school's action-based learning programs with minimizing the damage. Whereas Ross students three decades ago relied heavily on Michigan auto industry contacts, the current crop of MBAs spends half a year working on projects in the field with West Coast tech firms, East Coast banks and Midwestern manufacturers. They're also more focused on the big picture, with Associate Dean Valerie Suslow noting that "our macroeconomics elective has never been more popular" and that a second-year student asked whether she regretted leaving her job to pursue an MBA replied thusly: "Would I rather be searching for my dream job with a Ross MBA or without? The answer is with."

The Fuqua School of Business at Duke University

Notable alumni: John Mack, CEO of Morgan Stanley ( MS); Alan Schwartz, CEO of Bear Stearns.

Fuqua's approach to the crisis has been dictated by the students themselves, who recently completed an exercise in which they put the school on trial and questioned the culture of the school. Those included elements as broad as increased focus on ethics and sustainable wealth, and as minor as the students and faculty's courage to confront colleagues when elements of a team activity aren't working. Dean Blair Sheppard said the makeup of the student body has shifted, with the number of students focusing on social entrepreneurship up from 20 three years ago to 150 today. More MBAs are encouraging their school to follow through on expansion plans abroad and prodding their more reserved international peers to speak up and bring alternative ideas to the fore. "Our job as a school is to produce students who can manage the world we just handed them, because we haven't before," Sheppard says. "The kids are fixing it. When the market tanked last year, our students didn't compete more, they cooperated more."

University of Chicago Booth School of Business

Notable alumni: John Corzine, New Jersey governor and former CEO of Goldman Sachs ( GS); Brady Dugan, CEO of Credit Suisse ( CS).

According to communications director Allan Friedman, MBA students have crowded into panel discussions on the crisis, while faculty members have testified about the crisis before members of Congress. The school has added two new courses this year: "Business, Politics and Ethics" and "The Analytics of Financial Crises." It brought in Randall Kroszner, who stepped down from the Federal Reserve's Board of Governors in January to teach a course about the Fed's recent actions called "Money and Banking."

MIT Sloan School of Management

Notable alumni: William Clay Ford Jr., chairman and former CEO of Ford ( F); Carly Fiorina, former chairman and CEO of Hewlett-Packard ( HPQ).

Deputy Dean Yates says the Sloan school began addressing the downturn as early as last fall, when head of entrepreneurship, Baseline Scenario blogger and former chief economist for the International Monetary Fund Simon Johnson, taught a half-semester, not-for-credit course on the crisis. He also taught a mid-term workshop on subprime mortgages around the same time. This semester, the head of Sloan's finance group and behavioral finance proponent, Andrew Lo, is teaching a course on the financial crises after reporting to Congress. Antoinette Schoar is researching how the recession may yield a less mobile, more conservative crop of chief executives. "Imagine people of my parents' generation who grew up in the Great Depression and had a set of characteristics that are typical of them -- like saving little bits of metal foil," Yates says. "That's one piece of it."

Sloan has renewed its focus on ethics by planning a module for curriculum. Jackie Wilbur, the director of Sloan's career development office, says the 30% of MBAs who would normally take an internship related to finance has dropped to 21% off this year's 100 finance-track students. Wilbur says the decline of job opportunities for these students coincides with a "dramatic uptick" in MBAs visiting her office for career advice. "Some years as much as 20% would go to investment banking," Wilbur says. "I don't have it broken out as to how many went this year, but it certainly was a lot less than 20%."

Wharton School of the University of Pennsylvania

Notable alumni: Gerald Kleisterlee, CEO of Philips ( PHG); Brian Roberts, CEO of Comcast ( CMCSA).

This spring, management Professor Mauro Guillen offered one of the nation's first courses on the recession -- The Economic & Financial Crisis: Causes, Consequences and Policy Options -- and is revisiting it again (he hopes for the last time) this semester. Guillen and 14 other Wharton faculty members address the local and global causes of the crisis; how it stemmed from and affected the stock market, real estate, private equity, retail, pensions and the auto industry; and how to solve some of its most nagging problems (regulation and fiscal stimulus figured prominently). Though initiated by the administration, the 250-student course was fueled by questions from its nearly 200 second-year MBAs, who grew more despondent with each new layer of bad news and began pressing professors to offer alternatives to rather than critiques of the government's actions and looked for examples of nations with a better grasp on their financial systems. (Canada received high marks.) "More obvious questions included 'How come, in hindsight, we all saw how this could happen but nobody or very few people could predict it?' " Guillen said. "Another is 'Are we teaching finance and management in the right way, and why are you teaching these models that failed us?' "

Stanford Graduate School of Business

Notable alumni: Charles Schwab, CEO of Charles Schwab ( SCHW); Ben Bernanke, Federal Reserve chairman.

Officials at Stanford note that their MBAs embrace a broad spectrum of industries beyond finance, which they credit for a 97% hiring rate in 2008. Though the class of 2009's employment numbers haven't been released, the school says a major overhaul to the MBA curriculum two years ago, along with panel discussions and "tweaks" to courses during the crisis, have helped candidates weather the downturn. The new curriculum requires a first-year critical and analytical thinking seminar that staffers say "requires intellectual honesty and the ability to defend the position."

-- Reported by Jason Notte in Boston.

Jason Notte is a reporter for TheStreet.com. His writing has appeared in The New York Times, The Huffington Post, Esquire.com, Time Out New York, The Boston Herald, The Boston Phoenix, Metro newspaper and the Colorado Springs Independent.

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