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grams had 90 percent or more of their students placed at graduation. A year or two later, these same programs were placing only 50 per- cent of their graduates. Stories of employers "reneging" on job offers were widely disseminated. The fall- ing number and value of job offers inevitably damaged the perceived value of the MBA degree. While the job market has rebounded from its nadir, it has not recovered sufficiently to mend the damage done by the dot-com deba- cle. Starting salaries for MBAs have been essentially flat for the past five years. Moreover, the cost of attend- ing full-time MBA programs has risen, further eroding the number of people seeking to attend a high- cost, full-time MBA program. The global environment. To be sure, recessions, wars, rising fuel costs, and supply shocks occasionally result in shrinking job opportuni- ties and declining compensation. The current period of stalled com- pensation growth, job scarcity, and application declines may be one such episode, but we cannot rule out the possibility that the problem could be sustained. Globalization, with its attendant technological dis- placement, trade and budget defi- cits, energy price shocks, and the "war on terror," has the potential to reduce the long-term demand for MBAs. If this proves to be the case, the management education enterprise will need to adapt—and possibly even shrink. With these factors in mind, we can better process what the crit- ics have to say and take a realistic look at what business schools have to offer. For example, there are certain things that management education will never be able to do. eager and intelligent with powerful tools of business: the basic princi- ples of finance, marketing, strategy, economics, and management sci- ence, as well as the proper vocabu- lary to discuss them articulately. It will enhance their communication and analytical skills, accelerate on- the-job learning, and improve pro- ductivity. This is no mean achieve- ment—it is the value and purpose of management education. One thing is certain: Business Stuart Greenbaum WHAT MANAGEMENT EDUCATION DOES, AND WILL CONTINUE TO DO EXCEEDINGLY WELL, IS TO EQUIP THE EAGER AND INTELLIGENT WITH POWERFUL TOOLS OF BUSINESS. A quality business education will neither transform blackguards into paragons of virtue nor turn recluses into consummate team players. It will not guarantee that each of the 125,000 MBAs who graduate each year will ascend to the leader- ship of Fortune 500 firms or find their way into the top 1 percent of the wealth distribution. It will not ensure that each and every gradu- ate will emerge from his or her business education amazingly elo- quent, analytically gifted, extraor- dinarily creative, or wonderfully altruistic. What management educa- tion does, and will continue to do exceedingly well, is to equip the schools must respond to competi- tion and marketplace demands. While educators certainly should consider the rash of criticism of business schools carefully—and respond where appropriate—they should not accept the implication that they are somehow responsible for the decreasing demand for busi- ness education. The decline in business school enrollment could be reversed by a variety of factors, including a growth in employer demand and/ or a more time-efficient delivery of MBA training. Absent these, the industry will continue to shrink, and lower-cost programs will displace the more expensive. Stu- dent demographics and employer demand will continue to evolve, and business schools will need to stay in touch with these trends. Only then will business schools' circumstances improve. Of course, a rising tide will not lift all boats. Those that float, however, will have reason for optimism. ■ z Stuart Greenbaum is the Bank of America Professor of Managerial Leadership at the John M. Olin School of Business at Washington University in St. Louis, Missouri. He served as the dean of the Olin School from 1995 to 2005. BizEd JULY/AUGUST 2006 57