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The B-School Pipeline Problem

Women and the Uphill Battle to Reach the C-Suite

As of International Women’s Day 2017, only 21 Fortune 500 companies had female CEOs—down 12 percent from 2015’s numbers, as reported by the Independent. According to a report released on March 7 by the GMAC (the organization that designs and administers the GMAT exam), women make up 47 percent of individuals receiving graduate business degrees.

In a world where women are getting non-MBA business degrees (Master of Finance, Management, etc.) at the same rate as men, women are only receiving 36 percent of MBAs. Combine that with the fact that the number of CEOs in the Fortune 500 with MBAs has been steadily growing, and it becomes clear: we have a pipeline problem that could make it hard for women to make it into the c-suite.

So what does this mean? At worst, it’s all-out discrimination—which we can likely rule out, because women make up the same proportion of MBA program members in the United States as they do in the applicant pool. At best, it’s an institutionalized supply problem—and tackling it at the various stages of the supply chain may be the only catalyst to bring us to true gender parity in national MBA class profiles.

In a report released in 2013, the ACT Research & Policy Board worked to rationalize an interesting phenomena: in high school, female students’ grade point averages tend to outperform male students’, both overall as well as in specific subjects like English, Math, Social Science, and Science. But when they take the ACT and other standardized tests, female students suddenly drop below male students in Math, Science, and overall test performance.

The ACT Organization (which administers the exam) rationalizes this phenomenon through the insights of a 2002 working paper from Harvard’s Prof. Brian A. Jacob, using it to explain that male students get lower grades in high school because G.P.A. can reflect penalties for “late homework, disruptive behavior, or inattention.” In contrast, they argue that male students do significantly better on the ACT because the aforementioned “noncognitive factors” are removed from the scoring, leaving only “an objective, summative measure of student learning.” Combined with the unexplained disclaimer that “the ACT excludes items that might create a gender bias,” we have a potentially flawed argument to unpack.

For one, the ETS and the College Board (the creators of the SAT) did a joint study in 1996 that showed how timed multiple-choice test formats favor men, no matter the test subject. A study at UC Berkeley in 1995 showed that the SAT under-predicts female students’ performance in undergraduate programs, and that “non-test criteria” like G.P.A. were better indicators of female performance in “all academically rigorous and male-dominated fields.”

But, to avoid going down a rabbit hole about what’s wrong with this picture, we can instead follow this obstruction in the supply pipeline to the next stage of the journey. What this can lead to, more importantly than a reduced math score on the SAT or ACT, is a reduced interest in pursuing an undergraduate degree with a basis in math—namely, the STEM and Business tracks—because female students have been conditioned to believe that they are less likely to succeed in these fields. The number of women enrolling in graduate STEM programs stagnated and even decreased from 2004 to 2014—and that trend is reflected in MBA degrees. In the top 10 of U.S. News & World Report’s 2017 full-time MBA programs, the class profile features at least 44 percent students with STEM/Business undergraduate degrees—a percentage that is never matched or exceeded by the percentage of female students enrolled.

For argument’s sake, say we’re in a perfect world, and we’ve solved this problem: women are now considering math-based undergraduate degrees at an equal rate to men, and we have a balanced student population with 50 percent women in every STEM and Business undergrad program in the world. Now what?

Funding is where the next obstruction occurs in the pipeline. According to the GMAC, financial considerations are a critical factor in deciding on pursuing an MBA:  “Financial reasons are the number one reason globally that female applicants have not yet accepted their admissions offer to graduate business school,” the March 2017 report indicates.

“In the United States, 30 percent of female applicants cite obtaining funds as their biggest challenge versus only nine percent of male applicants,” 29 percent of female students who were delaying the acceptance of an MBA admission offer were doing so for financial reasons (in contrast, male students’ most reported reason for delaying acceptance was to wait for offers from other schools).

So, if we have female students who are already willing to consider an MBA, the obvious next step to ensure they accept admission offers is to create financial incentives that can help lessen the burden of pursuing the degree—and here, Stern is on the right track. In the last issue of The Oppy, Stern Women in Business (SWIB) Co-President Julianne Helinek celebrated the introduction of the NYU Stern Advancing Women in Business Scholarship, a new, merit-based scholarship for women enrolled in the full-time MBA. The scholarship is a victory, to be sure—but if we can’t get women to consider an MBA in the first place because of financial concerns, we may be missing the people we most want to reach by offering incentives too far along in the pipeline.

One way some MBA programs are able to reach out to female students is through the Forté Foundation, a non-profit that works to connect with female undergrads to help them make the next steps in their business educations and careers. Stern works with the Forté Foundation to waive application fees for affiliated female students, and to open up communication with those on the fence about next steps—and this may have a more tangible impact early on in the pipeline.

SWIB is bridging this particular gap in an elegant way: by framing their website and its language to communicate with prospective female MBA students. They’re aware that many of the people visiting their site are women strongly considering the pursuit of an MBA, and they use their platform to help move Stern to the top of their consideration set.

Student organizations like SWIB are poised to liaise between potential female MBA students and a welcoming academic community stifled by its own communications problem. Kelli Greenberg, Co-President of SWIB alongside Helinek, noted the importance of MBA women’s outreach to their potential future classmates to get the conversation started. That, paired with b-school incentive programs, could bridge the gap.

“If Stern hosted more programs, such as Stern’s Opening Doors for Women event every fall, I believe this would be helpful in improving communications with future female MBA students,” said Greenberg. “If women cannot attend that annual event, it is important to have more women’s specific MBA panels throughout the year and across various regions of the U.S. in order to speak with as many interested female candidates as possible.“

Helinek thinks Stern has other promising options to improve its communications with our future female classmates.

“If Stern wants to help expand the pipeline of women candidates and convince on-the-fence women to get an MBA in the first place, it should partner with the Forte Foundation and potentially other business schools on outreach to undergraduate and early-career women,” she said. “That’s the idea behind an upcoming event SWIB is planning with NYU’s undergraduate career office: we’re hoping to show women studying liberal arts and the humanities that business school is an option they should consider down the road.”

This b-school pipeline problem is, clearly, a multi-tiered one. Although funding is a big part of the issue, female students face far more pervasive obstruction that starts long before SAT prep and persists far beyond applying for an MBA. Nonetheless, a united front addressing each component of the problem is the best—and, frankly, our only—place to start. Hopefully we can see these efforts reflected in more promising class profiles released in the years to come.

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