Archive for Chris Sorensen
Canadian M.B.A. schools climb the global ranks
Despite not having brand-name cachet, Canadian business schools excel in attractive areas
Many of Sarah Kaplan’s former students at the University of Pennsylvania’s Wharton School asked her the same question when they found out she took a job at the University of Toronto’s Rotman School of Management last year: “Why Canada?”
It’s an understandable question. Wharton, after all, is one of the top business schools in the United States, if not the world. And while Rotman has made significant strides in climbing up the global rankings over the past decade, it is still a long way from being considered in the same breath as Wharton, Harvard and Stanford—the sorts of places where a mere mention of the institution’s name will instantly open doors.
In fact, only two Canadian M.B.A. programs made it into the top 50 on the respected Financial Times list for this year. They are Rotman (45) and the University of Western Ontario’s Richard Ivey School of Business (49). York University’s Schulich School of Business’s M.B.A. program was ranked 54th.
But rankings don’t paint a complete picture “Rotman has one of the top strategy departments,” Kaplan says. “If I look at the quality of research and quality of faculty, I’ve joined one of the top schools in North America.” For students, though, a lack of name recognition at Canadian schools presents a conundrum. While the education may be of high quality and more affordable than in the U.S., it can be more difficult to get on the radar of big U.S. companies and the recruiters that scour the globe for top talent.
The good news is that things are beginning to change. The meltdown that started on Wall Street and reverberated around the globe in a flurry of bank failures and government bailouts largely skipped over Canada, where a more conservative approach was credited for keeping the banking sector out of trouble. Federal Finance Minister Jim Flaherty has since suggested that Canada be used as a model for other countries, an argument bolstered by global surveys and even U.S. President Barack Obama, who said, “Canada has shown itself to be a pretty good manager of the financial system and economy in ways that we haven’t always been.” And there’s reason to believe Canadian business schools are poised to benefit by association. “The fact that the Canadian economy gets a lot of attention can only be good for Canadian business schools,” Kaplan says.
The challenge will be successfully capitalizing on the spotlight to show the world that there’s more to the Canadian approach than being conservative about money—a trait that appeared admirable during a once-in-a-lifetime financial crisis, but may also be holding back the country when it comes to producing global champions.
The financial crisis, spawned by the risky mortgage-backed securities created by Wall Street, inevitably resulted in soul-searching about the roles of business schools in promoting a profit-at-all-costs breed of capitalism. By contrast, many Canadian schools emerged from the recession with comparatively little baggage, and even enjoyed a perception of being part of the solution.
It added up to a unique opportunity for those charged with attracting top talent north of the border. “When the American schools scaled back on their hiring, many of the Canadian schools took advantage of it,” says Rick Powers, Rotman’s associate dean, noting that Rotman has made several key hires as part of a drive that will see faculty grow from 115 to 150 over the next four years. In addition to Kaplan, new faculty includes: Kent Womack, a visiting professor of finance who has taught M.B.A. and executive programs at the Tuck School of Business at Dartmouth College for over 10 years, and Partha Mohanram, an associate professor of accounting who came from Columbia University. Powers says, “Now Canada has become a very viable destination, not only for students, but faculty.”
The faculty feud
Inside the nasty battle at McMaster’s business school
Faculty members at McMaster University’s DeGroote School of Business in Hamilton are fond of telling a story about a student who, several years ago, interrupted a professor mid-lesson with a question about something in his organizational behaviour textbook. The student had flipped ahead to chapter four and spotted a case study about an ugly battle between employees at Charles Schwab Canada and the company’s chief executive, Paul Bates. The page featured a large photo of Bates leaning over an employee’s cubicle in the middle of the discount brokerage’s Toronto offices. The student immediately recognized the face of the school’s head administrator and asked, “Hey, isn’t that the dean?”
Indeed it was. The case study, based on a 2002 Financial Post column headlined “Slick salesmanship masked discontent,” blamed Bates for the revolt at the discount brokerage—a dozen employees sent a letter to Charles Schwab’s head office warning that management of the Canadian arm was “no longer acting in the best interest of ourselves or our clients”—and suggested Bates should have been fired as a result (instead, he oversaw the sale of the brokerage firm to Scotiabank). Bates, who declined to be interviewed for this story despite repeated requests by Maclean’s, was named dean of McMaster’s business school two years later.
The revelation about Bates’s tumultuous history with Charles Schwab, and the fact it was featured in a business textbook, was awkward, to say the least. It also left several DeGroote faculty members, who had already been chafing against Bates’s leadership, with a feeling that history was about to repeat itself. They were right. DeGroote is currently being roiled by its own nasty internal divisions, with Bates again being fingered as the bad guy. In the ivory tower equivalent of a mutiny, several faculty members are speaking out against what they describe as Bates’s harsh, top-down management style. They accuse him of running the school like a corporation—not an institution of higher learning—and of bullying professors who don’t fall in line.
Facing mounting complaints, the university’s office of human rights and equity services launched an investigation and released a preliminary report in March. The publicly available report is based on interviews with Bates and 26 faculty members, as well as an examination of internal documents, postings and emails, but does not attempt to determine whether there has actually been any wrongdoing. It paints a picture of a school deeply divided—“an underlying and pervasive culture of hostility has emerged”—and lists a litany of allegations against Bates, all of them unproven, including complaints that he has run roughshod over established rules and procedures and has shown little interest in the school’s academic mission. The internal divisions have created a “dysfunctional work environment” that threatens to further deteriorate if left unchecked, according to the report, with both sides hurling allegations of harassment and discrimination.
Some faculty members say the situation has become so bad they are seriously considering leaving the school, despite their tenure.
McMaster’s response was to dust off the wheels of university bureaucracy. Under the umbrella of the university’s anti-discrimination and group conflict policies, it has assembled a three-member committee to “provide guidance” to the business school and oversee a series of investigations and mediation, as well as anti-discrimination and harassment training. The hope, presumably, is to smooth over the dispute before it does lasting damage to DeGroote’s reputation as an up-and-coming business school and casts a pall over the opening of a new, $27-million DeGroote facility in nearby Burlington, Ont., this fall. But faculty members aren’t holding their breath.
The choice of Bates to lead DeGroote raised more than a few eyebrows in early 2004. Unlike the outgoing dean, Vishwanath Baba, a Ph.D., Bates had little in the way of academic credentials. In fact, he didn’t even have a university degree. What he has is business experience. Bates reportedly got his start as a bank teller in Britain before moving to Canada in the early 1970s. He went on to head up four major brokerage firms and has sat on the boards of the Toronto Stock Exchange and the Canadian Investment Dealers Association, and has served as a part-time commissioner in the Ontario Securities Commission.
The Bay Street background, coupled with some part-time teaching experience at the University of Toronto’s Rotman School of Management, was presumably a major selling point for McMaster’s administration, who were keen on raising DeGroote’s profile and forging better links with the business community, a key source of funding for the school. Besides, it’s not unusual for business schools to tap non-academics for such positions.
In addition to fundraising, a dean who boasts accomplishments in the private sector helps attract students who value ties to the “real world.” It also helps lure those already working via pricey executive M.B.A. programs, a major cash cow for business schools. In this capacity, Bates would appear to be a perfect choice. With his short, greying beard and closely shaved hair, he is described by his former employees as a “master salesman,” the sort of person who can whip up excitement about a project or cause. He is also a natural with the media (he once hosted a call-in radio show), capable of talking knowledgeably about everything from interest rates to the pharmaceutical industry.
