How Important Is Academic Research At A Business School?
Maria |
April 6, 2023

Welcome to another episode of Business Casual! Our hosts have some exciting news to share about INSEAD. The school is getting a new dean, Francisco Veloso, who has extensive experience leading other prestigious business schools. After completing his term as dean of Imperial College Business School in London, Veloso will be taking over at INSEAD in September.

In other news, our hosts will be discussing a newly released ranking that evaluates the academic research output of various business schools. They’ll delve into who’s on top, who’s not, and the reasons why. They’ll also explore the relevance of this ranking for MBA students and how they should choose the business school they are going to.

Episode Transcript

[00:00:07.130] – John

Well, hello, everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast with my co hosts Caroline Diarte Edwards and Maria Wich Vila. Lots of news this past week. The big news is INSEAD will have a new dean. His name is Francisco Veloso. He is a familiar figure because he has been the dean of two other business schools. Currently. Until he takes over in September, he has been the dean of Imperial College Business School in London. He will have fulfilled a five year term there before moving on to INSEAD. Before that, he was dean of the Catholic of Lisbon School of Business and Economics in Portugal for five years. He is replacing a guy who has done a remarkable job at INSEAD over the past ten years. And at INSEAD, they have a rule which limits every dean to two five year terms. So having completed his second five year term by September, he is moving on, and Francisco Veloso is taking his place. The other thing we want to talk about is research. We have just published a new ranking of business schools by academic research and how often the faculty is cited in key journals.

[00:01:36.550] – John

And we want to talk a little bit about who’s number one, who’s not, and why, and is it all that meaningful to an MBA student to begin with? But let’s first talk about the new INSEAD dean. And we have, of course, Caroline is really an expert at INSEAD, having served as the head of admissions for quite a few years at the school. Is this a welcome change? And what kind of shoes will he be filling here in taking over?

[00:02:06.100] – Caroline

Yeah, well, Ilian has been a wonderful dean, as you know, John. So very big shoes to fill. Ten years is a long time. Bit like the American president. They can only do two terms. So I know that Ilian is ready to move on, but I also know that people at the school have been nervously anticipating the end of his term because he has been so successful and so well liked, both by people working at the school, by the students, and by the various stakeholders. And it’s a very difficult job, right, because you have so many stakeholders to deal with who all have very strong opinions about how you should be doing your job and don’t hesitate to tell you about it repeatedly and in no uncertain terms. It’s a job that requires a great deal of skill. Instead is a very difficult school to manage, I think particularly amongst business schools. It’s a particularly challenging school compared to even some of the top US. Schools because it has the different campuses in different locations. So the MBA program runs in parallel in France and in Singapore. The school also has the campus in Abu Dhabi.

[00:03:19.400] – Caroline

It now has a center in Singapore. It has an incredibly diverse faculty, as well as student body and alumni which is wonderful and creates a very rich and diverse community, but also creates very rich and diverse perspectives on how things should be done. And that can be very difficult to manage, right? And faculty are notoriously difficult to manage because they have often very large egos and very strong opinions. And so I think that running Insured is probably one of the toughest jobs amongst running the deanships of various business schools. So Mihov has done a fantastic job across various fronts. So in fundraising, he has led a very big fundraising campaign, has been very successful in that. So that, of course, has a huge impact on what the school can do in terms of extending facilities, providing additional scholarships. It has really a long term impact and that is not necessarily as easy to do for a school like INSEAD as it is for the US schools, because there is not a tradition of fundraising and donating to your alma mater in Europe and outside of the US. As there is here in the US.

[00:04:44.270] – Maria

Right?

[00:04:44.640] – Caroline

So INSEAD has had to work very hard at cultivating that culture of giving back, which doesn’t come so naturally to some cultures outside of the US. Because students, when you go through your undergraduate program outside of the US, you’re not expected to donate or you’re not sort of being solicited to donate on such a regular basis as you are if you go through undergraduate in the US. And so you’re not educated at an earlier age, that is the done thing. And so INSEAD has had a tougher journey to get alumni engaged in that process, but has been very successful in that now. And Ilian has been very dedicated to that and then lots of other things. I mean, obviously he’s had to steer the school through COVID, which was the most challenging of times. He has, I think, very successfully updated the MBA curriculum, integrated digital transformation into the school. The school has launched the Masters in Management extended executive education. The center here in San Francisco was launched during his tenure. So lots of different things that he’s been doing and not just a very challenging environment for him to manage, but of course, it’s quite exhausting because you got to travel around to these places and be physically present.

[00:06:17.530] – Caroline

Apart from during COVID he had an incredibly exhausting travel schedule because people want to see you. And all of that relationship building is a big part of what he had to do. And you can’t do all of that virtually, you can do some of it virtually, but it can’t all be done virtually. So I know he had a very grueling travel schedule, so actually I think he’s going to be spending some time over here in the Bay Area while he’s taking a sabbatical. So very big shoes to fill. I’m very thankful for what he’s done for the school and he’s also a very nice guy. He was my professor for macroeconomics when I was a student in Seattle in 2003. He’s a great professor as well, so very talented guy, and I know that.

[00:07:05.290] – John

He’s looking forward to I know he’s won teaching awards.

[00:07:09.310] – Caroline

Yes, he’s a great teacher, and I know he’s looking forward to going back to teaching. So I don’t know much about the new guy who’s coming in, but it does look like he’s got a good Pedigree. It’s good that he has been dean at a couple of other schools before, so he knows what he’s getting into. It looks like he’s had positive impact. He’s done some great things before. So to me that looks very positive. He’s also got a very international profile, so he understands that international DNA of INSEAD that is so important to the Insured culture, and he will understand some of the challenges that go along with that as well. So I think that’s great. I think that it looks like a very good, very promising choice. So obviously time will tell, but he looks incredibly well qualified. He’s also got excellent academic credentials as well. So I think that he’s got the background that is required for the job. He looks like someone who will have the respect of the various stakeholders when he comes in. So then it’ll be up to him and we’ll see what he makes of the job, and I’m excited to see what he does.

[00:08:24.550] – John

Yeah, it’s really true. And he’ll be one of the rare birds who will have had three deanships. I mean, most notably Ted Snyder, who was initially at UVA Darden. They went on the Chicago booth and brought in the largest single gift to business school in history, 350,000,000, which was the naming gift for the booth school. And then went on to Yale School of Management and gave that school a very big boost with a global strategy that has been very successful and has allowed Yale to really be one of the premier business schools in the world. Veloso is a leading authority in entrepreneurship and innovation. He got his MIT PhD. Behind him. He’s also taught a lot of it, a lot at Carnegie Mellon University, where he remains an adjunct professor. So I think he brings a lot to the game, having been dean twice over, just like Ted Snyder was. I think once you’re dean and you’ve led an academic institution, you know what levers to pull to make a difference. And it’s a very different kind of game than when you’re a brand new dean and you really have never had experience dealing with a board of advisors or a broader university or all the politics that goes along with trying to herd a bunch of very independent people with faculty.

[00:09:56.170] – John

And as you pointed out, I think INSEAD is in fact, a more complicated place to manage, given its multiple locations and also the great diversity of its faculty, all of whom bring their own points of view to the game. But I can’t think of a better choice, frankly, than Veloso, given his previous experience as dean of two other business schools. And the other interesting thing is which each step in the administrative ladder, he’s gone on to a bigger school, a school with more prestige and status, obviously, in the FT MBA ranking. INSEAD last year was number two. Imperial was, I believe, 30 something, 37 perhaps. And then the Lisbon School was in the 80s. So he’s climbing that ladder, that rankings ladder, for sure. And he is going to follow really a very successful dean, but oftentimes deans that are very successful and are put in motion a lot of initiatives, there may be less of that happening and more of just making all the stuff that’s changed work really well. So it may be a little bit less exciting in the first five years, given all that’s happened in the last ten. Obviously, time will tell.

[00:11:27.690] – Maria

One thing that jumped out at me about Veloso was that he apparently at Imperial launched their online MBA and an Ms in business analytics. And so I can’t help but wonder if that might signal INSEAD, if they very deliberately chose him as a dean. Because when I think about global business schools like yes, he certainly has an impressive pedigree, and he has certainly been the dean. Imperial certainly a far more well known name than the school he was previously a dean of. But I can also think of perhaps there could have been some other deans from other schools that might be more otherwise, more peer institutions to INSEAD. But I can’t help but wonder if perhaps his initiatives launching I know that INSEAD has been making strides in these in both launching additional master’s programs as well as in beginning to offer more things online. But I wonder if perhaps his innovations at Imperial on that front were sort of the main things that made him an attractive candidate.

[00:12:24.610] – Caroline

Right. It’s an interesting point and I’m sure that that was excellent experience and something that the school is very interested in. From the discussions that I’ve had with people at the school, I don’t think that they are yet committed. For example, I don’t think that they’ve decided. I mean, obviously I’m not privy anymore to the private discussions behind the scenes, but from the various discussions that I have had with people at the school, I don’t think that they have yet decided, for example, we want to launch an online MBA.

[00:12:54.530] – Maria

Right.

[00:12:54.860] – Caroline

But I know that they are thinking about they are well aware that this is going on and they are grappling with, okay, what should we be doing in this space? And I’ve had discussions with people at the school about the challenges of if we did this, how do you offer the same experience? Right? Because you can’t exactly replicate what you do on the INSEAD campus in a virtual classroom. And so they are grappling with those strategic issues. And so I’m sure that his experience in that dimension is very attractive to the school as they try to figure out what the hell should we be doing next? What should we be doing as regards online programs? Should we be doing online programs or more hybrid programs? I mean, that’s obviously a big issue for schools as they try to figure out what is next and how they embrace further digital transformation. So I’m sure you’re right, Maria, that part of his experience helped him to stand out amongst other candidates.

[00:14:04.610] – John

And online degrees have been slow to flourish in Europe. Compared to the US. There are over 350 online MBAs in the United States alone. Interestingly enough, Cambridge only last two weeks launched a hybrid online MBA. And so I think it’s gaining more legitimacy. And over the next five years, I think this is going to become a major issue for INSEAD. Should it offer online degrees, and if so, how should it do them? Should they be hybrid with stints in Abu Dhabi or Singapore or Fantom Lowe? Or even San Francisco? I mean, the multiple campus structure actually gives them a real advantage in the online space. I wouldn’t think that online or INSEAD would mean 100% online. It would be a superior premier program with a combination of high touch in person sessions on a campus, as well as weekly internet classes. And I do think that the INSEAD brand would translate really well to a very successful online program that could be very frankly, lucrative for the school and bringing a lot of money. It’s often a case of having to bring along the faculty and getting faculty approval to do that. But online degrees are so popular now and they’re so common that I think particularly with the teaching online during COVID most faculty member members are pretty much on board.

[00:15:45.310] – John

So it’s just a question of how does it affect our brand, our overall reputation, our prestige. Obviously, there are schools like Harvard, Stanford, and Wharton and Columbia, and Kellogg and Chicago, Booth and Dartmouth who stayed away from online MBAs or hybrids for the very reason that they think it could cheapen their reputation. But INSEAD is a pretty innovative place, and I’m thinking that INSEAD is also very responsive to market demand, has a very big executive education portfolio, and we know that the Pandemic has forced a lot of executive education courses online. So I think this would be right. Maria, you bring up a really good point. Having Veloso, having launched a very successful online degree program at Imperial, you would think he could use those skills to do the same at INSEAD. We will see. Meantime, I want to talk about research. We just did a piece on an annual research ranking that’s actually done by another business school. They devote a lot of resources to this, and the school is UT at Dallas. That’s University of Texas at Dallas. And while this is not a school that’s ever ranked in the top 25 or in MBA programs or top 25 in almost anything in research according to its own ranking.

[00:17:13.190] – John

They’re number two in North America behind Wharton. Now, if your eyebrows are raised, I think there’s a good reason for that because of course the way any ranking works is who’s ever creating the ranking decides what to count and what not to count. And obviously UT Dallas has counted journals in its ranking on research that clearly favor the school. Now this is not to say that their research capabilities are pretty weak because if you look at the Financial Times ranking on research, UT Dallas is number six behind Harvard, Columbia, Cornell, Chicago, Booth and UCLA, and just ahead of Stanford, which incidentally I would have problems with right there. But it is what it is. I mean, Maria, what do you make of a ranking by a school that’s not really all that well known and then coming in number two on research?

[00:18:19.070] – Maria

I mean, I think any ranking that you put out yourself, where you put yourself as number two is one of the most even if there were any fundamental credibility to using this methodology or research publication, whatever their methodology, even if there were any legitimacy to that, the fact that they come in second place in their own ranking kind of immediately calls it into question. It a little bit silly, right? I like that they’re not first because that would make it a little too blatant, but they’re like, well we’ll just be second because we’ll be humble. No, I mean, look, first of all, the fact that they’re second is kind of silly because then you start to ask yourself like, okay, well, how are they massaging this? And I think I was looking at their description of it and they look at I believe is it from 1990? It seemed like they look at a pretty broad time period for the publications to be measured. And so if that’s the case and if I did understand that correctly, which I may not have, but if I did, then what about schools that have more up and coming faculty?

[00:19:34.230] – Maria

That’s issue number one. And then issue number two is whether or not research itself is an indicator of what your business school experience is going to be and how that business school is going to prepare you to do well in the business world. Which I don’t know, if I had to choose the number one metric upon which to measure a school, I don’t think research would be number one or maybe even top five for me personally. But that’s because I’m very pragmatic and research is great and it certainly has its place, but wouldn’t be my top choice.

[00:20:09.290] – John

Yeah, I agree. And all the surveys that get into how does an applicant choose the schools that they apply to would show that in fact, faculty research ranks very low on the totem pole of decision makers is just really almost negligible. And I think there’s a good reason for that. Part of it is because it’s a professional school and a professional degree, and it’s very focused around career outcomes and those loom with far greater importance than how many journals faculty have been published in with esoteric articles that are read literally by a handful of other academics in the world. Not even by all that many academics, I’ll add, and can barely be understood by anyone and have little practicality for current management. I mean, that’s the reality. And yet research is an important part of what business goals are all about. And there was a tilt back in the 1950s toward research because there was criticism that business schools back then were merely trade schools preparing people for professions, and that the schools lacked academic legitimacy. And after those reports by the Ford Foundation and the Carnegie Foundation, schools did a really sharp turn toward academic research, and that turn is still occurring today.

[00:21:55.780] – John

Deans are often graded on the basis of the kind of faculty that they’ve been able to retain and recruit and the research that they publish in journals that no practitioner reads. That’s just the reality of it. Caroline, you have a view on the value of research at business school.

[00:22:16.890] – Caroline

I agree that it’s not a top criterion for most prospective candidates, but as we’ve discussed, there are many stakeholders at business score, and it is something that faculty often care about, right? And it helps to attract good faculty if you’re known for doing good research, right. So you get a good reputation amongst your peer schools if you are well known for investing in research, and it can help schools to recruit good faculty. I think it’s just part of the mix of things that schools need to invest in, especially top schools. That’s part of what they are known for. It’s part of what the faculty care about. They want to dedicate some of them want to dedicate a lot of their time to this. Some of them want to dedicate their time to it. But you have a mix of people on the faculty and some of them care more about research than others, and some of them will do fantastic research. It actually does break out and become very well known and does have an impact beyond that particular institution. So I think it does have its place. It certainly is an important part of the mix of elements that’s important at a top business school.

[00:23:36.920] – Caroline

But I don’t think that you can rank business schools on research alone unless that’s something unless you are perhaps you want to apply to business school to do a PhD and faculty, the quality of the research that faculty is doing is your key criterion, then that’s perfectly legitimate. But for an MBA student, as you say, it’s going to be one of many things that they will be thinking about and probably not the number one criterion that they’re taking into account.

[00:24:10.110] – John

Yeah. In fact, a few years ago, GMAC Graduate Management Admission Council did a survey and found that when applicants were asked to name the most important selection criteria and choosing the school, the highest percentage of them actually slightly more than 40% name quality and reputation, which obviously are largely a function of rankings only 11% identified program aspects. As vague as that term might be, none of the full time MBA applicants named the curriculum, the school’s culture, or the program’s class profile. Career aspects came in second with about 20% of the folks checking off that factor in the survey. So it is what it is. Although an awful lot of money is spent on academic research in business schools and it does matter in terms of attracting the best faculty. If you’re going to pay big salaries and give a lot of research support to a faculty member, that often will determine whether or not you’re able to recruit the best PhD candidates and the best junior faculty to your school. I bet you that when you went to Harvard, Maria, you really didn’t look at the research agenda of the professors that you chose. You chose by course content and probably the reputation of a faculty member to teach well in the classroom.

[00:25:39.910] – John

Right.

[00:25:40.640] – Maria

Research wasn’t even for me personally. It wasn’t even on the list. It was not something that I considered at all. What’s interesting, though, speaking of what’s being considered and what isn’t, I’m back on the UT Dallas website, and I think they’re using about 24 different journals. And some of these journals are kind of head scratchers, like the Journal on Computing, which is not really one that when I think about I mean, who knows? Maybe it’s a highly business focused journal. And yet when you look at The Financial Times, because the Financial Times also looks at research as a criterion to use and the Financial Times looks at 50 different journals of which two of them are entrepreneurship based or at least have entrepreneurship in the name. The UT Dallas one does not appear to have any that have entrepreneurship in the name. And the Financial Times has the Harvard Business Review and also the Sloan Management Review as two publications. And the UT Dallas does not look at either one of those other rival schools. So it’s interesting. It’s like, well, we’re also not including the very journals put out by our rivals.

[00:26:58.950] – John

The only journals that actually have any readership whatsoever by the practitioner. The other thing you mentioned, the Journal of Computing. Well, it does so happen that UT Dallas has strong faculty in information technology management. So surprise, surprise that they’re including the Journal of Computing.

[00:27:22.190] – Maria

Well, yeah. They also have information systems research and Mis Quarterly.

[00:27:26.950] – John

Of course they do. Yeah. And not the Hard Business Review and not the Sloan Management Review and wow. How about that? Yeah. Well, and Caroline, when you went to INSEAD, I’m sure as well, that when you picked your courses, you weren’t picking on the basis of, oh, my God, was this faculty member published in this journal or that journal?

[00:27:52.860] – Caroline

No, absolutely not. As you say, you’re looking at the course content and you’re thinking about your career goals and what are you going to learn and what is going to be most relevant. And sometimes the course content is based on the faculty research. And that can be fascinating, but you’re not necessarily looking at it from the perspective of what research have they done? But it’s just part of the curriculum, and I think that the research does have a place. As I said, it’s an important element. I do hope that schools continue to invest in it. But as you pointed out, this ranking is rather odd. I think the FT research ranking does a rather better job of highlighting which schools are spending their money wisely here.

[00:28:52.080] – John

Yeah, I would agree. And not only that, but I would draw another conclusion from this. So, UT Dallas on research, even in the FT, like I mentioned before, ranks high. It’s number six in the world. And yet it’s a school that has none of the resources of a Stanford, a UCLA, a Chicago Booth, a Cornell, a Columbia, Harvard, an INSEAD, a Kellogg, a Duke, a Yale. So what conclusion can you draw from that? I’ll tell you what the conclusion is. This is my conclusion. My speculation informed by many years of experience in covering these things. And I will tell you that a school that is so focused on research and has limited resources and therefore can’t hire more balanced faculty member who are good at research and good at teaching has made a choice. We think that research is all important, and teaching, well, who cares? Okay? Who cares about it? So, UT Dallas may appear high up in these rankings on research, either because they’ve selected journals that are favorable to them, or in the FT case, the FT journals are favorable to them. But I can guarantee you that the quality of teaching at this institution is inferior to all the peer schools that are ranked in and around it on research, because they just don’t have the money to pay for a balanced faculty member when they recruit one or retain one.

[00:30:25.770] – John

So, to me, this is a sign for students to avoid this school, not to go to this school. Unless, of course, you want a PhD and you want to have a great mentor in research. And then that’s a different story. But if you are a graduate management student, I would think that the teaching quality at UT Dallas is subpar compared to any of the schools that are ranked in and around on any of these research rankings. That’s my conclusion, which I think is pretty damn valid. So there you have it. Hey, if you’re interested in research anyway, and you want to know where the schools rank either by the UT, Dallas or the FT. Take a look at the story. It’s kind of interesting. Nonetheless, even if we think the ranking is tilted in a certain direction, are.

[00:31:25.950] – Maria

You going to rank your own assessment of the ranking as number two in the world, John? Number one in the world according to your own criteria?

[00:31:34.930] – John

Yes. Why bother?

[00:31:37.970] – Maria

I love how that works. I agree, John.

[00:31:41.070] – John

Why shouldn’t you be number one? I mean, if you’re number two, does that give less credibility than if you’re number one?

[00:31:47.520] – Maria

It’s like a false modesty, but I think the three of us are collectively the number one business news, MBA News podcasters at least, posted on the Poets and Quants platform.

[00:31:59.600] – John

Yes. We declare it right here.

[00:32:03.570] – Maria

You heard it here first.

[00:32:05.690] – John

All right, everybody. Thanks for listening. This is John Byrne with Poets and Quants. You have been listening to Business Casual on the weekly podcast.

Business School News | General | P&Q Podcast "Business Casual"
How Important Is Academic Research At A Business School?
Maria |
April 6, 2023

Full Episode Transcript:

John Byrne: [00:00:00] Hello everyone. This is John Byrne with Poets and Quants. Welcome to Business Casual, our weekly podcast. We want to talk about international students. Schools are now reporting that a good number of their international recruits who were admitted to programs this fall haven’t been able to show up or have changed their mind.

At the University of Illinois, the school, the Gies College of Businesses, lost about 200 international students in its Master of Finance and Master of Business Analytics programs causing a $7 million hit. To their budget at UC Davis Graduate School of Management, 40 students didn’t show up who were admitted, and that’s resulting in two and a half to $3 million hit on their budget this year.

Both of these things have occurred before the announcement of a hundred thousand dollars tax on H one B Visa. Which will make it more difficult for many employers [00:01:00] to hire international students and keep them in the US for an extended period of time. And we’re getting the new class reports of the, of the new cohorts of students who’ve arrived on campus in the fall of this year.

And Carnegie Mellon is. Down 30% for their international cohort over the past two years. UCLA Anderson School is down 25% over the past two years, and schools are preparing for the worst because of the H one B Visa decision which could affect future employment. Caroline and Maria, my cohosts are in the market helping people get into the best schools in the world.

And Caroline, what do you think?

Caroline Diarte-Edwards: Yeah, definitely seeing concern among international candidates and people holding off on applying for the US schools. So it’s really a shame. I think the international schools, particularly the schools like Inea and London Business School and the other top.[00:02:00]

International European programs will benefit, they’ll get talent that might otherwise have come to the us, which is great for those schools. And I’m very fond of those schools, but it is sad as from the US perspective for sure. On the other hand, you could also take the perspective that.

If you do have options for your career post MBA that don’t require that you absolutely have to stay in the US as an international candidate, then now could be a very good time to apply, right? Because definitely application volume will be down and schools will be perhaps. More open to candidates that might otherwise have been waitlisted or rejected in the past.

For some candidates, this is actually a fantastic opportunity to get into a top school, but from, for, at least from the school’s perspective, it is a shame because, I’ve experienced firsthand the value of a very internationally diverse classroom and the value that brings with a [00:03:00] diversity of perspectives that enriches the learning experience so much for everybody.

Enriches the debate and bring so much to the academic experience as well as the the network and the social experience. So it’s everybody’s loss, right?

John Byrne: Very true.

Caroline Diarte-Edwards: And I think it’s a very myopic perspective that the US government takes that. There needs to be a more of a refocus at US educational institutions on the domestic market because those international applicants bring a lot to the domestic students in enriching their learning and enriching their network.

Of course bring a huge value to the US economy when they stay. So there are very impressive statistics on the value of immigrants to the US economy. So Indian immigrants, for example, are only about one and a half percent of the US population, but they have founded to date about 8% of all the tech startups in the us.[00:04:00]

And for sure some of that top talent from India will now not come to the us. They will go to perhaps they will stay at the great schools that we’ve talked about in India, or they will go to other international schools. So for sure it will be a loss to the us learning experience and to the US economy.

John Byrne: Maria, you run applicant lab which is a platform that helps applicants get into highly selective schools. And many of the people who use your product are international students. What are you seeing?

Maria Wich-Vila: Everything Caroline is saying concern is think a delicate way to put it.

And I think it’s because as the more affordable provider in the market, I tend to get the applicants who maybe they don’t have the family business to fall back on. Maybe they don’t have, large sources of income elsewhere in their lives. And so I think the concern is very real and very merited, right?

I can’t. In good faith, tell someone, if they [00:05:00] really start, sit down and do the math and start to do, run the numbers, if they just assume that things are going to stay as is. And this is the big caveat that I’m, I want to get to in a second, but if we assume that things stay as is and if someone really is from a lower income tier from Nepal or India or some of the other countries that I work with, yeah, maybe sit down and do that math and think about, okay, if I do have to come back to Nepal afterwards, how will I pay back that loan? There, there is though some good news. Even if we assume that things stay status quo, which I hope, and I’m pretty, I’m I think it’s, I’m cautiously optimistic that they won’t.

But there are other markets as well. So I’ve had a lot of candidates, or former clients, I should say, graduate from business school, not be able to get jobs in certain in countries and then. Being able to move to Dubai. Dubai for some reason, has started attracting a ton of candidates, primarily from South Asia but from other parts of the world who might be having trouble getting some of those work permits.

You could do worse than live in, Dubai’s not perfect, but [00:06:00] you could also do worse than live in Dubai, right? The salaries are pretty high. The standard of living, if you have a white collar job there is, it’s not the worst outcome. So it’s not I can’t stay in the us. That’s it.

There’s no other it’s not a binary of, it’s either the US or it’s nothing. And then I think the second point is I, we’ve just seen. So many things, let’s take something from a different facet of policy. The tariffs, right? The tariffs were announced and the markets went crazy, and in the months that have followed, oh, actually, here’s the tariff, but this one company, their products aren’t gonna be subject to the tariff.

And then there’s this other company that maybe they’re not gonna have to pay the same tariff. And I can’t help but wonder if some of these. Some of these very large companies that are getting tariff exemptions, their ability to lobby for. The H one B, maybe lowering of the H one B fee. If they’ve been able to successfully lobby tariffs, they might be success, able to successfully lobby against these, true, these [00:07:00] visa fees.

And a lot of these big companies, these big tech companies are in fact some of the largest employers of post MBA talent in the us. So I am cautiously optimistic that. This could be, hopefully right now it’s the big, the flash and storm and the, the making, the big splash, right?

Everything’s about showmanship and making the big splash. And maybe in the aftermath of the storm, that initial PR media storm, maybe the reality will start to calm down a little bit. Yeah, the other good news is that if you’re applying now, that means you would enroll in 2026. You would, if it, if you’re talking about the US two year program, you would graduate in 2028.

At that point, who knows what might happen. I like to think that what we have seen so far in terms of the Visa policies, hopefully. Roughly the floor about as bad as it can get. I think if they start implementing a similar thing to OPT, that could be the same thing. But if we just assume that okay, right now what’s been announced is that these foreign students all have to do, you can’t stay here, you have to [00:08:00] go someplace else.

It, we assume that’s like the initial negotiating position. It’s just gonna chip, it’s just gonna get, it’s got nowhere else to go. It’s even worse. So we’ve, we now have two and a half years roughly until. People applying now would have to really implement, or be really affected by this in a.

In a pragmatic and tangible way. And so that’s why I’m hoping that the little chipping away and the chipping away things will start to get a little bit better and a little bit better and a little bit better like we’ve seen with other facets of policy. Didn’t like a bunch of the CDC employees that were all fired under Doge didn’t more than half of them I think were recently rehired.

Yes. Back again true. Whatever you think of the policy, it seems like some of the policies are. Being slowly walked back. And so I think if you. If you’ve got an adventurous spirit, I, and by the way, if you apply now, sorry. I know I keep going, but I like, if you apply now, let’s say you get accepted, you don’t have to show up until August of 2026.

So that will give you [00:09:00] time, like definitely. Apply now and see what happens between now and August of 2026 to make the decision to not apply now, because you’re rightfully scared. I’m not blaming anyone, but to not apply now, maybe by maybe six months from now he’ll be like, ha, just kidding. I’m doubling the number of H one Bs.

Yeah, we have no idea what’s gonna happen. So things are So give yourself that optionality.

John Byrne: Yeah. And things are so uncertain that could very well happen because, one day at tariffs are on one country the next day they’re not one day they’re pausing the ab the interviews for student visas, the.

Say they’re not there’s litigation all over the place, challenging many of the presidential actions that have been taken that have put them in limbo despite all the headlines. So it’s, it, there’s more uncertainty than there is certainty about any of these things. And as you point out, you, if you [00:10:00] did apply this year, the odds are gonna be in your favor if you’re an international student, frankly, because there is no question.

That international applicant volume will be down at all the top schools in the us, which means that to maintain some semblance of a global class. Admission directors are going to have to dig a little bit deeper into their international applicant pools to select candidates. In a way, if you play the long term and in the BA, in, in many graduate degrees or long term bet, I think you’re gonna be.

Oddly better off. And it may even be that the schools will really even go out of their way to help international students in ways that they haven’t in the past because of these actions in Washington. And what do I mean by that? Just a more welcoming reception than the already welcoming reception you would get hiring immigration lawyers and people that can help you.

If in fact there is a [00:11:00] challenge of one kind or another. I think the takeaway is not to be discouraged and throw up your hands to say, ah, I always dreamed of coming to the United States and getting an MBA or a graduate degree in business. Use this as an opportunity to actually increase your odds of getting into a better school with the understanding that when you get out there, probably most likely be an administration change and a change in these policies if they even get completely adopted as Maria points out.

Wouldn’t you think that’s the best strategy, Caroline?

Caroline Diarte-Edwards: Yes, I agree. I think that it’s good to take a longer term perspective because it is such a long timeline, right? If you’re applying to a top two year program as you say, you’re gonna be coming out of the program at the end of the Trump presidency and things may look very different.

And Maria rightly points out that. Everything is very volatile, right? So one thing gets announced and the next week it [00:12:00] gets rolled back, right? They’ve done so many things where they’ve realized, oh, actually that was a really bad idea after all. So

They’ve changed things. So things may not it might, may not turn out to be as bad as we fear.

And then I would also encourage candidates. To apply to the US schools, but why not hedge your bets and apply to an international program as well? Agreed in a time of uncertainty. As Maria said, create options for yourself. And so I would encourage candidates to apply to the top US programs, but also apply to top international programs as well and see what offers you get.

And then you can make a decision. As Maria said, it will be closer to the time when you would be starting the program and there may be more clarity about the situation in the US and what your options are in international markets as well. So I think that given the current circumstances, a good strategy is to hedge your bets and apply more widely than you might [00:13:00] have otherwise done.

John Byrne: Plan Bs are good. Let me just say business schools in the US have for years advised international students that those should have a plan B in the event that they can’t get with a US company. The other thing to, to keep in mind incidentally, in terms of MBA employment is that most of the companies.

That basically employ the lion’s share of MBAs are all global concerns. So you can be hired here and if there’s any challenge in getting you employed here in the us you can simply start in an office outside the United States with a hope of coming back when things clear up. So that is also another important thing to keep in mind.

And I’ll just say this. Despite whatever messaging you’re reading in your local newspapers or on your streaming platforms or television stations about how immigrants may not be welcome in the us that’s not true at all. Universities are diverse places. Welcoming. [00:14:00] Embracing loving the diversity of their students and particularly those from different cultures and backgrounds that enrich the educational experience.

There is no Dean that I’ve ever encountered who said they want fewer international students. It’s the exact opposite. They’re putting out message after message, telling people that they’re still welcome and wanted. Needed in the classroom. Now, Maria, in the past we’ve seen applicants who try to say, okay, can I time my application and my enrollment in a program to what I think might be the next recession?

And we know that in recessions applications go way. In part because some people lose the opportunity to gain advancement in a recession. Some people get unemployed. Some people just realize, hey, a recession is a good time to take a time out and get a new educational credential, which may allow me to do things I otherwise can’t do.[00:15:00]

But it’s almost impossible to time a recession and I’m imagining it’s impossible to time what’s going on here now.

Maria Wich-Vila: Yeah. I mean if we could all time, when everyone’s been talking about a stock market crash that to, not to bring another disparate topic in, but like everyone’s been talking about, it’s a bubble.

It’s a bubble. I’ve been hearing ’cause a bubble for a year and a half. True. Yeah, you can’t time or ask, for example, ask the people who enrolled in business school, like who got into business school in 2020. Like there’s always gonna be these external shocks. We can try to predict a recession, but who knows if it’s going to happen?

Who knows if there’s going to be some sort of virus or the opposite of a virus. Maybe there’ll be a virus that helps us all live healthily forever. Who knows? There’s so much uncertainty out there that who knows what to do. So I think. I think yeah, have that optionality. I think go ahead and apply.

Now if there is a recession though, which everyone seems to think is coming at some point, at that point, it’s going to be harder to get accepted. And as Caroline has pointed out, so rightfully, if other international, high quality international students are [00:16:00] spooked by the current H one B talk, now is your chance.

International candidate. Jump in there, shoot your shot like you might be able to get into a school, assuming of course that you’re qualified, but. You might have a lot less competition now than you normally will, so this could be a golden opportunity for you. And one final as one thing that I wanted to point out was that I was thinking, okay, Maria, let’s say that, you just said that maybe there’s gonna be walk back of some of these and there’s gonna be, maybe he’s gonna change.

But even if there isn’t a change, right? Let’s think about this. The companies themselves are gonna have, and you started to alluded to this John, when you mentioned that a lot of them are global concerns. They’re gonna have now a two year window in which to say. Okay. We know that we’re not gonna keep these people in the states, so let’s open a huge office in Vancouver.

Let’s open a brand, an enormous new office in Toronto. Whatever that is. Because I was thinking back to over the summer when it looked like maybe a bunch of international students wouldn’t be able to get any student visa at all. And I know that some of the business schools we’re looking [00:17:00] at, do we rent out some space in Toronto and do Zoom classes?

We do a hybrid. What we did during COVID. I’ve heard that. I think Rice, I was actually having dinner last night with a dear friend who was, say he’s from Texas and he was saying that Rice has some sort of a campus in Paris and that they are leaning really heavily on their global campuses around the world to still be able to service these students who had gotten accepted.

So things like that, like if. Even if our sort of my very cautious and perhaps irrational optimism turns out to not be true, let’s say the things get, the OPT is banished and all, everyone is banished and it’s the worst case scenario. Again, there’s gonna be two and a half years for these companies. To quickly find, okay, fine, we’re gonna open up an office in Mexico City and we’re gonna pay people really well and we’re gonna what?

Whatever that is. ’cause they’re, the companies are still gonna want the talent, right? Just because the political administration doesn’t want the global talent in the country. That doesn’t mean that the country’s employers don’t want that talent. They [00:18:00] want that talent, they want that intellect, they want that energy and that drive to make their companies better and to make more money.

So they have a very strong incentive to not only be lobbying for these. Visa changes to go away, but if they don’t go away, they have a very strong incentive to come up with some way to provide, to provide those incomes and to provide those perks and some sort of a compromise type of situation.

So again I think if you’re applying now, if you’re going in with eyes wide open, shoot your shot. That’s my, I would absolutely tell people to to try that.

John Byrne: Yeah, I totally agree. And, generally this is my rule of thumb and Maria and Caroline, you may or may not agree with this, at the top MBA programs, they’re so selective that the people who apply to them generally are very self-selecting group.

So I always say that roughly 80% of the school’s applicant pool. Is qualified to actually get accepted, get in, do [00:19:00] well, and land a good job. And yet we know that at Stanford, the acceptance rate is 6%, that Harvard is 12 Wharton and Columbia is, a little under 20 or so. So there are a lot of really good candidates who aren’t getting in.

Which leads me to this, if you’re an international student who thinks okay, so these US schools just might dip a little more into the domestic pool to make up for the offset of international candidates. As it turns out, there is a little notice. Clause in the big beautiful tax bill that was passed here under Trump that places severe limits on federal loans for graduate students.

Now, the current grad plus loan program allows students to borrow up to the cost of their graduate programs. That comes to an end in July of next year. After that, grad students borrowing will literally be capped at [00:20:00] 20,500 bucks a year with a lifetime graduate school loan limit of a hundred thousand. That’s a big deal because, at the top MBA programs it’s not on typical.

For a student to borrow over a hundred thousand dollars easily. And so these caps are also going to affect domestic enrollment. So again, that, that contributes to your ability as an international candidate to get in both. The likely decline in competition not only from internationals but also from domestic students here, interestingly enough, that Bill, which passed has different limits for a professional graduate degree, but the bill basically says that only med school and law school qualify as professional degrees and not business school.

That’s another wacky thing that’s happened that will affect. Domestic enrollment as well. So I, I side with Maria and [00:21:00] Caroline to me the advice is, look long term. Don’t be affected overly affected by the change in policies in the US or the climate here. Understand that if you apply now and you matriculate next year and you graduate in two years after that you’re gonna be facing probably a very different environment.

Also understand the odds are in your in your favor, in getting into a highly selective, really good program in this coming year. And know that, while people too often calculate the value of an MBA based on short term variables, like what’s my starting salary gonna be? What is my sign-on bonus?

The truth is the MBA has enduring value over your lifetime. So it rewards you over your entire career and not just for the first or second years. And you can’t go wrong by graduating into a network of helpful and supportive people from a great school and [00:22:00] receiving a great education. So I think bottom line, we’re telling you apply.

Don’t get convinced by your colleagues or anyone else that this is a bad time to come to the us. Opportunity. Some of the best opportunity come comes when people perceive there to be significant challenges. And I think this is really true with business school. We hope we convinced you to come and try and hedge your batts too, as Caroline noted.

I think that’s really super important to have a plan B when you apply and toss a bunch of apps to the European schools which have excellent superb world class MBA programs and real international cohorts. 90% of the students not from the countries where the schools reside. Toss a bunch of them in your mix for your target schools to give you these different options at the end of the day.

This is John Byrne with Poets and Quants. Thanks for listening.

Maria

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