The desirability of diversity at business school

IT’S an accepted truth in business schools that diversity is a good thing. Meeting people from different cultures or sectors opens your eyes to how business is done elsewhere, helps you to challenge your own preconceptions, and also boosts your contacts book. But is diversity really all it’s cracked up to be? Should diversity play a role in your choice of business school? And what does it mean, anyway?

This summer Wharton, one of the top American schools, revealed that it has increased the number of women on its latest full-time MBA intake to 45 per cent, a record high. Harvard also has its highest proportion of women ever this year too, with 39 per cent. Admirable, no doubt, and by all accounts the result of a heroic effort, but in other respects these schools are surprisingly monocultural. Although 68 countries are represented in Harvard’s latest MBA cohort (the class that will graduate in 2013) 70 per cent are North Americans.

E PLURIBUS UNUM
At Wharton, 66 per cent are American, at Stanford 37 per cent are international (although this includes those who are permanent US residents). Overall, then, about 70 per cent of people on the top American MBA courses are Americans. Compare this to London Business School, where 89 per cent of students are from outside the UK. Spanish school ESADE also has 89 per cent international students, while at Swiss school IMD, 99 per cent are international.

A glance at the sectors also casts doubt on the top three US schools’ diversity. At Stanford, 32 per cent of the latest MBA cohort comes from manufacturing and services, and 26 per cent from investment management, which includes banking, hedge funds, private equity and venture capital. Eight per cent come from NGOs or government. At Harvard, 21 per cent come from consulting, 14 per cent from manufacturing, 13 per cent from venture capital and private equity and 12 per cent from financial services. The story is similar at most schools. Perhaps that’s not surprising. MBAs are only useful to, or affordable to, those in certain jobs. Diversity of sectors is a pipe-dream, to an extent.

DIVERSITY DRIVE
There seem to be two forces that determine the make-up of MBA cohorts. Firstly, there is the deliberate drive to increase diversity. At EM Lyon – admittedly a small school with a cohort of just 30, compared to 1,000 at Insead and 396 at Stanford – there is a definite vision of what it wants its cohort to look like: “My targets are 30/30/30: 30 per cent French, 30 per cent female, and an average of 30 years old,” says Joseph Li Puma, MBA programme director. “As far as other nationalities, a target of 15 different countries is desirable, with a 30 per cent representation from Asia – China, Japan, India, and Asean countries – 20 per cent from the Americas, US, Canada, Mexico, Brazil and so on. Ten per cent other European and 10 per cent African would be ideal.” Micromanagement? Perhaps.

MARKET FORCES
The second trend is one that can’t be controlled. Bluntly, schools can only recruit the people who are out there. So, the drop in the number of students with technology backgrounds reported by EM Lyon (down from 70 per cent to 30 per cent in a few years) is a hangover from the tech boom of the late 90s; lots of people who went into that sector were at MBA age in recent years. That’s over now. And while recruitment drives have some effect, you can’t get people from Bric countries if they don’t want to come. In some respects, schools are at the mercy of the markets.

Broader social changes also play a part. The record numbers of women at Wharton and Harvard are offset by a reduction in the number of women in the Stanford cohort, suggesting that there is a finite number of women of sufficient quality applying to top MBA schools in the US. Why? Perhaps women of MBA age, in their late 20s and early 30s, might be having children. And perhaps there is a question whether, at least in some countries, the numbers of 30-year-old women in business is lower than the number of men.

Claire Lecoq, IMD’s director of MBA career services, says: “If we lower our age limit, we could probably attract more women. But this would lead to less experienced students studying with us and would fundamentally alter the value of having a cohort of mid-tier executives all learning from their shared workplace experiences. This is not a compromise we are willing to make, and would not be in the interests of our students.”

So sometimes more equality means lower quality. Perhaps a good MBA cohort reflects the workforce, which raises the question of whether diversity per se is an unalloyed good? Critics see the increase in the number of nationalities or the percentage of women as a cynical box-ticking exercise designed to raise a school’s standing in MBA rankings, some of which award extra points for these things. Diversity, like so much, is a tricky old thing.