B School Confidential

THE UNIVERSITY OF TEXAS AT AUSTIN

Texas' premier MBA program has a problem. Apparently its highly intelligent, experienced students don't know a bargain when they see one. Because a graduate degree in business from the University of Texas at Austin is relatively cheap--it has the lowest cost of any top-twenty B school in the country--students assume they must be receiving a subpar product. "In the past the school has suffered from the belief that things must be better at the higher-cost programs," says May. "This used to drive down student satisfaction."

Customer satisfaction, as any MBA worth his or her degree knows, is everything in business today. The same is true in the competitive realm of business education. Stung by low marks on student evaluations in the mid-nineties, UT-Austin has attempted to address the areas most frequently cited as needing improvement: access to elective courses, demand for top-quality career services, and especially, the quality of core teaching. UT-Austin's relatively low tuition means its student-to-faculty ratio is higher than at most of the elite MBA programs. With a total of about 180 faculty members, the school boasts tremendous depth and variety--yet they're shared by not only 726 full-time graduate students but also some 4,400 undergraduates. Students say that the quality of the core-course teaching is good overall, though there are still areas of weakness: Some complain that the finance department, for instance, needs help. "They need to attract and retain high-quality professors," says Milind Pasad, a 26-year-old from Bombay, India, whose concentration is in energy finance.

On the recruiting front, UT-Austin has been eager to please its burgeoning list of corporate visitors, who numbered 437 last year--678 if you count discrete company divisions. (Consulting firms like A. T. Kearney and PricewaterhouseCoopers are UT-Austin's biggest recruiters; right behind them are high-tech firms and investment banks.) The new Ford Career Center, a 10,000-square-foot wood-and-glass interviewing suite worthy of a Fortune 500 company, opened in February 1998. Ten new dressing rooms nearby mean students no longer have to change into suits in the restroom.

Clearly UT's struggle to deliver a first-class MBA program despite financial constraints has paid off. The most recent Business Week survey ranked UT-Austin two spots higher than its previous ranking of twentieth. UT-Austin also came in eighteenth on U.S. News and World Report's latest ranking, tying with Pittsburgh's Carnegie Mellon University. "Quite frankly, we're a fall-back school for a lot of people who apply to Stanford, Wharton, Harvard, and Northwestern," says May. "On the other hand, we're a lot of people's first choice." That's not surprising when you look at the pay packages UT-Austin students command. Salaries for its MBA graduates have risen dramatically in the nineties: In 1998 they averaged $71,000 a year, versus just $41,000 in 1989. Twenty-two percent of the members of the class of 1998 took consulting jobs with an average salary of $84,636 plus an average bonus of nearly $19,500.

Fans of UT-Austin also point to its innovative curriculum. In 1997 Computerworld ranked the school's Techno MBA program--a study of business technology and its relationship to management--second in the nation (the Sloan School of Management at the Massachusetts Institute of Technology was first). Thanks to lucrative corporate partnerships and private support, UT-Austin has plenty of cutting-edge technology, including a large Windows NT lab and the EDS Financial Trading and Technology Center, a scaled-down version of the famous Salomon Brothers trading room. Strong ties to Austin's high-tech communities--including its relationship with the Austin Technology Incubator and the IC² Institute, founded by one of the B school's former deans, George Kozmetsky--have made UT-Austin a hotbed of entrepreneurship. Its annual Moot Corp Business Plan Competition draws MBAs from the world's best schools to Austin to compete for venture capital. Meanwhile, students can opt for the Spanish-language track, a three-course language sequence for MBAs followed by the possibility of internships or study in Mexico, Venezuela, Chile, Brazil, or Peru. UT-Austin's close ties with Monterrey Tech, Mexico's highly regarded business school, is part of its growing focus on Latin America.

Now that UT-Austin has shored up its position among the nation's elite, it's making the most of its bragging rights. But don't look for the school to rest on its laurels. "You can make vast improvements in your school," May says, "but if everybody else makes more, you're still in the dumpster."