Decades ago, students planning business careers would major in economics, with the goal of eventually obtaining a Master’s of Business Administration (“MBA”) degree. Although some students still choose this path, an increasing number are opting instead to major in business as undergraduates and embark on their careers immediately after graduating. This post will discuss how to choose colleges offering undergraduate degrees in business.
You Gotta Know the Territory!
There are more than one thousand graduate college business programs in the United States. Responding to demand, many of those business schools have created undergraduate programs. These programs are also thick on the ground: U.S. News and World Report ranks 511 undergraduate programs.
One interesting nugget from the U.S. News list: the best-ranked undergraduate business schools tend to be relatively large, with enrollments of over 4,000 students. However, even “liberal arts colleges” are conscious of an ever-increasing demand for marketable degrees, and are creating their own business departments and/or majors.
Undergraduate business programs mostly offer the same core curriculum – courses in accounting, management, marketing, information systems, and finance – mirroring the graduate MBA curriculum. Some also branch out to include sub-specialties such as entrepreneurship, actuarial science (the calculation of risk, an essential function for every insurance company), and supply chain management (e.g., managing the process by which an iPad starts with a design in Cupertino and ends up manufactured in – and shipped from – China). Many business schools are also investing heavily in courses teaching students how to use “Big Data” to analyze business information (“business analytics”) – some schools combine this with information systems to denote specialists in using computers to run the enterprise.
The common feature is that these schools are designed to equip students for a job in corporate America upon graduation. Where does this leave two-year MBA programs, you ask? Although they are more rigorous and highly valued, many of the most prestigious MBA programs require a hiatus between college and graduate school – candidates are expected to have several years of work experience. And MBAs are becoming somewhat less popular as graduate business schools offer one-year master’s degrees in some of the core disciplines.
Except for the most prestigious programs, MBAs may well become the province of regional colleges where nearby middle managers enroll part-time to earn credentials to open paths to upper management. And even these may eventually be supplanted by on-line programs. “Executive MBAs,” often offered online, are marketed heavily to mid-career professionals.
We are already seeing colleges shuttering their traditional MBA programs altogether. See “Why Business Schools Are Shutting Down Their MBA Programs,” Forbes, May 26, 2019, https://www.forbes.com/sites/poetsandquants/2019/05/26/why-business-schools-are-shutting-down-their-mba-programs/?sh=2a636ba03685 (the writer is also editor in chief of “Poets and Quants,” discussed below).
Thus, this article focuses on undergraduate programs.
Where Do You Want to Live and Work After Graduation?
Geography can be destiny, at least for your first job. All things being equal (which they never are), you are more likely to find a job in the area near your college. Attend an East Coast college, and most of your opportunities will be on the East Coast. Matriculate in the Midwest, and you may have some difficulty landing a job in California. The more prestigious the school, the less difficulty you will have.
For example, here are the regions in which most graduates of three well-known Midwest undergraduate business schools found their first jobs after graduation in 2019 (the names of their business schools are in parentheses):
Ohio State (Fisher): 71% of destinations for Fisher graduates are in the Midwest, with almost 50% in Ohio.
Penn State (Smeal): 50% in New York and Pennsylvania.
University of Minnesota (Carlson): 80% in Minnesota.
University of Wisconsin (still looking for that big donor, or brashly going with the “no name” look used by, say, its Chemistry Department?): 72% in the Midwest, 12% in the East.
The same phenomenon exists elsewhere:
Georgetown University (McDonough): 60% in Northeast; 20% in Mid-Atlantic.
University of Denver (Daniels): 67% in Colorado; 10% in the West.
University of Texas (McCombs): of respondents reporting initial salary, 75% were reporting from Texas.
Arizona State University (Carey) (no data for undergrads, so these are for just graduated MBAs): 78% in Arizona and the West.
University of Washington (Foster) (no data for undergrads – MBA statistics): 69% in the state of Washington.
University of Georgia (Terry) (again, MBAs): 49% in the South.
Boston University (Questrom) (again, just MBAs): 75% in the Northeast; the next region, at 12%, is the West, which suggests a more national reach).
Once you get settled, moving between regions is less difficult, except for finding a job “on the Street” (Wall Street).
Beware the Barriers to Entry
It may surprise you to learn that some undergraduate business schools impose barriers which students must overcome while at the college to: 1) get into the business school; and/or 2) stay in.
These barriers are mostly a consequence of the increasing popularity of business programs. As with engineering, a growing number of students are seeing business as a professional degree with excellent employment prospects. Some, lacking the ability or interest in STEM, see it as the best pathway left for employment without attending graduate school.
A majority of students in many colleges major in business. These programs are inundated with demand. As we see in other areas of college admission, restricting access – and selectivity – can produce financial gains for colleges.
The interesting development here is how programs go about limiting access. One common approach is to raise the bar for freshmen admissions, but directly admit those freshmen to the business school. Those programs are referred to as – surprise – “direct admit.” Other programs take half measures – they admit their strongest applicants to the business school program and require the rest to compete their way into the major. For these schools, understanding the percentage of students admitted as “direct admit” is important.
Then there are schools which admit nobody into the major until their sophomore or junior years. I call these the “hardcore schools.”
Penn State gives warning of its “hard core” approach in several places on its website, including this notice at https://ugstudents.smeal.psu.edu/academics-advising/get-into-a-smeal-major:
In recent years, The Smeal College of Business has experienced enrollment demand that has exceeded the college’s physical capacity to serve all desired applicants without compromising the quality of a Smeal College education. As a part of the plan to manage the high demand, it was determined that there would be no early entry into a Smeal major due to our administrative enrollment controls. In addition, capacity for each course for all Smeal College academic majors has been calculated to ensure each student will have the opportunity to graduate on-time. To honor the commitments made to our students, pre-major students may not enroll in upper division courses designated for Smeal College majors. Exceptions will not be granted for pre-major students to be exempted from this policy.
In other words, an offer to matriculate at Penn State does not include entry into the business school. Rather, students must take the introductory courses in the business program and achieve at least a certain GPA to be accepted into advanced courses required to earn the undergraduate business degree. In addition, students must earn a minimum overall GPA during this two year “pre-major” period.
Some of the courses in this pre-major program present unexpected challenges. In addition to taking calculus, pre-majors must comply with a foreign language requirement.
If you are wondering whether you need a lawyer to proceed further, the answer is “it couldn’t hurt.” In its defense, Penn State has plenty of advisers to help you through the process. Further, the university has traditionally imposed barriers for all its majors.
However, the problem for those considering Smeal is that the devil is in the details. For instance, how high is the GPA requirement to get into the business school program? For some business schools, it can be as low as 2.0 in core courses such as Accounting. This is less capacity control than redirecting students who are not succeeding in business (with or without really trying). Those undergraduate business schools which are “direct admit” but require a minimum GPA are doing much the same thing.
At Penn State, the overall GPAs required to gain full-blown admission to Smeal vary by the internal major selected – a 3.1 GPA allows entry into Management, while the door only opens to the Finance major for students sporting a 3.5 GPA. Without a good knowledge of grade inflation at each college, it is impossible to tell what those numbers really mean.
Discovering those details can be a time-consuming, and even impossible, task for someone not attending the school. If anyone can tell me the percentage of students who fail to make it into majors at Smeal because of these capacity controls, I would be much obliged. I am not alone – a parent complained online that at Admissions Day in 2018, the Smeal representative did not have that information. Fortunately, other schools with such barriers are more forthcoming. See e.g., https://wsb.wisc.edu/programs-degrees/undergraduate-bba/admissions/uw-madison-students
Unlike law and medicine – both “terminal degrees,” (i.e., the last degree before entry into the job market for a profession) – the prestige of undergraduate business programs may not be critical to your career. Obviously, if you have the chance to go to Stanford, Harvard, or similar top-10 undergraduate business programs, you probably should. However, most students do not ascend to those lofty heights.
If you are one of the vast majority who are aiming lower, do not fret. As noted above, the role of education in business is changing rapidly. Instead of a single degree, more businesspeople are going to repeatedly obtain new credentials. Some will pursue MBAs, either shortly after graduation or much later in their careers (the latter are marketed as “Executive MBAs”). Others will seek one-year master’s degrees in specialties as their career path moves in different directions. If at some point you perceive that your credential is not serving you well, you will be able to pursue another – possibly at your employer’s expense.
What should you look for in choosing among different programs?
The college itself
Start by ignoring those programs and concentrate on the colleges offering them. Your undergraduate college experience will matter far more to your growth and enjoyment than the ranking of the business school. You will thrive – and earn better grades – at a college where you “fit.” This includes small colleges with excellent programs. Find your colleges first, and then examine their business programs.
Where do you want to live and work?
Next, as discussed above, decide where you want to live and work after graduation, and concentrate on programs whose graduates find jobs in those places. If the undergraduate business degree is going to be the last one you seek for many years (i.e., your “terminal degree”), this analysis is important. If you know already that you will seek an MBA shortly after graduation, then you can skip this discussion.
Look for statistics on the college’s website of where graduates find employment. Search for “[college name] undergraduate business employment statistics upon graduation.” You may have to use some variations on this search to find what you are looking for. Some schools do not post geographic data – for smaller schools this may be a warning that your employment prospects for your first job may diminish dramatically outside the college’s home area. For larger and prestigious schools, it may simply reflect a reality that its graduates can find jobs everywhere.
Look at the alumni networks for each college, and better, for their undergraduate business schools. Again, a search like “[college name] undergraduate business alumni” should yield useful information. The University of Wisconsin devotes several pages to its network. See https://wsb.wisc.edu/alumni. Even small schools can have robust alumni programs with members offering to mentor students. See https://business.lehigh.edu/alumni. Consider the number of alumni, their engagement with the school, and the location of any of their events. This is most important at smaller schools, where name recognition may be lacking outside their local area.
Closely related are the internship opportunities at each school. Two search techniques may be helpful. First, use these search terms in your browser: [your college name], “undergraduate business school internship.” Second, on the web page for the college’s undergraduate business school, search (click the magnifying glass icon) for “internship” or “intern.” Again, using the University of Wisconsin as an example, the second method yields several informative pages. See https://wsb.wisc.edu/search?q=internship#gsc.tab=0&gsc.q=internship&gsc.page=1. Some schools require you to log-in to access internship listings by companies. Happily, Penn State is not one of them. See https://careerconnections.smeal.psu.edu/search/?s=internship.
You are looking for internship job listings and opportunities to earn college credit by participating in an internship. The number of internships available may correlate with your job prospects upon graduation.
Mind the gap between admission and entry into the business program
Examine barriers to entry for each undergraduate business program. Some students thrive on competition; others do not. There is no right answer here, but remember that at some schools, about 50% of students “admitted” to these schools will never move beyond “pre-major status.” If you are comfortable with the risk that if you fall short you will have to choose another major, then proceed.
Check the “rankings” of your candidate programs, particularly after you have completed the admissions process and received offers. Unfortunately, every ranking touted by the media has its flaws, as discussed in a previous post. See This Blog is Ranked #1.
I suggest two sources. First, consult the U.S. News and World Report rankings. See https://www.usnews.com/best-colleges/rankings/business-overall (you may have to purchase a Compass subscription). Ignore differences in rankings which do not exceed ten places.
Second, peruse “Poets and Quants.” This website is a widely read Internet resource covering both undergraduate and graduate business schools. You will spend most of your time on its sister site: “Poets and Quants for Undergrads.” See https://poetsandquantsforundergrads.com/.
Poets and Quants is subjective; be especially careful when reading the profiles of programs – ne’er a discouraging word is likely to be heard. Still, it provides valuable context to this corner of the educational world.
The best financial option
Finally, to quote Jerry Maguire: “Show Me the Money!” See https://en.wikipedia.org/wiki/Jerry_Maguire.
You are planning a career in business, correct? Consider tuition your first major investment. The curriculum offered by these programs is mostly the same. Yes, some professors will make a difference, and every school touts its experiential learning opportunities. But the differences are mostly minor. One possible exception is that smaller programs have more of an incentive to stand out and greater ability to provide individual attention.
If you start out your business career too far in debt, you will lack flexibility to move from one job – and city – to another, which is standard issue for many business career tracks. Sometimes you get what you pay for, but with the unpredictability in college financial aid (both merit and need-based), you may just find yourself a deal.