Breaking Away

This year's crop of M.B.A.s has more in mind than investment banking and high-paying consulting jobs

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MEET JULIE SPEAR MERRITT. SHE IS a bright, energetic young woman, a former triathlon competitor, from Houston. For six years, she worked as a geological engineer with Shell Oil Co., helping to select sites for drilling in the Gulf Coast region. Then, a couple of years ago, she quit. "There was more routine office work in the job than I wanted," Merritt says. "I was bored." This fall, she plans to start a new career, possibly working for a small furniture or real estate development company in North Carolina. She expects to make substantially less than she was earning at Shell, but that doesn't bother her. "I want to get up every morning and like what I do."

Julie Merritt is an M.B.A.

So, for that matter, is 23-year-old Shawn Hornsby, an equally bright and energetic young man from north central Illinois. As a child, he had always assumed that he would someday wind up running the chain of discount variety stores his grandfather had founded in 1922. But two and a half years ago, as Hornsby was completing his undergraduate work at Illinois Wesleyan University, his father decided to sell the company. Shawn went off to Indiana University's Graduate School of Business not knowing exactly what he would do when he got out.

Somewhere along the way, he developed the notion of starting his own business, perhaps a chain of fast-food restaurants. His idea was to locate them in small towns with populations of 10,000 or so, much like the towns where his grandfather had set up discount stores more than 60 years before. If all goes well, Hornsby will launch the venture this summer. And he has a partner -- his father. "My father never went to college," he says. "He's learned by doing. But I think he's impressed with the stuff I've learned at business school. He thinks I'm different from the M.B.A.s he's read about."

Julie Merritt and Shawn Hornsby are, indeed, different from the M.B.A.s we've all read about. They are not the smug, pinstriped, fast-track go-getters who have been blamed for everything from the fatal myopia of large corporations to the rampant corruption on Wall Street. They do not think that two years in a classroom has taught them all they need to know about running a company. Nor do they expect to conquer the world at any point in the near future, while being paid a six-figure starting salary for doing it. Rather, they are the type of bright, resourceful, roll-up-your-sleeves young people that most growing companies would be happy to have as employees, or customers, or suppliers. The question is: are they typical of their classmates or the exceptions that prove the rule?

That's an important question, if only because of the sheer number of M.B.A.s being unleashed on America these days. This June, the nation's business schools will graduate the largest class in history, more than 70,000 new masters of business administration. To put this figure in perspective, consider that the class of '87 is almost as large as the total number of M.B.A.s produced during the entire decade of the 1960s. We're talking about a thirteenfold increase in business-school enrollment over the past 25 years, a 50% increase over the past 10. More people are now graduating from business school each year than from medical school and law school combined.

The trend, moreover, shows no signs of abating. On the contrary, it has become institutionalized. The number of master's degree business programs has increased 67%, from 389 to 650, since 1974, when somebody first began to keep track of such things. Back in 1962, Harvard University alone accounted for some 12% of the country's annual crop of M.B.A.s. Today, the figure is 1.1% and falling. Meanwhile, more young people decide each year to turn their attention to business, and to get there by way of an M.B.A. degree.

Who are they? Why did they go to business school? Where are they headed, and where do they hope to end up? What do they want from the companies they work for, and what do they expect to find? And how have they been shaped by the events of their times? This is, after all, a generation that grew up after Vietnam and after Watergate. Most of them entered college at about the same time Ronald Reagan became President; now they are graduating from business school as he prepares to step down. By and large, they have no memory of an era when large U.S. corporations seemed invincible to foreign or domestic challenge. Rather, they have seen the decline of one major American industry after another; the rise of the entrepreneur; and, more recently, the scandals on Wall Street. How have these graduates been affected by all this, and what impact are they themselves likely to have on the American economy in years to come?

With such questions in mind, we set out to survey a cross section of the M.B.A. class of '87, as represented by the graduating students at 10 respected business schools around the country. (See box, "How the Survey Was Conducted," page 62.) We asked them questions on subjects ranging from their family backgrounds to their career plans to their attitudes toward business in general and small companies in particular. In all, we distributed 1,500 questionnaires (150 per school) and received 907 replies.

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