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Anandalingam changing course at Smith school

After three decades as an educator, G. “Anand” Anandalingam knows how to recognize trends — and he’s identified a big one in his last several years as dean of the University of Maryland’s Robert H. Smith School of Business.

G. ‘Anand’ Anandalingam, dean of the University of Maryland’s Robert H. Smith School of Business, says specialized degrees appear to be the future for business higher education.

“There is a structural shift that’s happening,” Anandalingam says, “and the MBA degree is getting devalued.”

The once-coveted Master of Business Administration degree — a cash cow for University of Maryland’s business school and calling card for elite universities such as Harvard and the Wharton School at the University of Pennsylvania — has fallen victim to the new economy emerging from the Great Recession. Elite schools are seeing MBA applications decrease by 5 percent. At Smith and other comparable business schools, MBA applications are down 15 to 20 percent.

It is a global phenomenon, Anandalingam said, in which recent graduates of MBA programs are finishing the degree and returning to work with nearly $100,000 in debt but no discernible increase in earnings. New graduates are finding that “the change in … salary has not been significant enough to justify” the degree.

“That reality has hit,” Anandalingam recently told reporters and editors of The Daily Record in an exclusive interview.

For a Top 10 research business school that once made its bones moving students through the MBA program, the substantial decrease in applications could have been disastrous. But Anandalingam, dean since 2008, said the Smith school has embraced the shift, and is helping to lead a revolution among business schools.

“We decided to launch … specialized master’s degrees, so if somebody wants to get into supply-chain management, the question is why do you need to do an MBA,” Anandalingam said. “You might as well do a degree in supply-chain management.”

The dean, who holds a Ph.D. from Harvard, said he was one of the first business school leaders to institute such degree programs — one-year, Master of Science degrees in finance, accounting, supply-chain management and information systems.

‘Going like gangbusters’

And how are the programs doing?

“Those things are going like gangbusters,” Anandalingam said. “We have more students than we can handle. The students are of very, very high quality.”

Anandalingam said the specialized degrees appear to be the future for business schools, which he admitted might be slow to fully accept the apparent shift. Other colleges — such as Fordham University in New York — have started similar degree programs, and are seeing the same success that the Smith School is experiencing. The business world apparently approves of the dean’s vision, too.

“The companies are also saying the same thing: ‘We don’t need too many generalists,’” Anandalingam said. “We need somebody who really knows what they’re doing in a specific field.”

The MBA program may be endangered, but the school’s other students are plentiful. The undergraduate waiting list is hundreds of names long, Anandalingam said, and Smith graduates about 15 Ph.D. students each year, with those students going on to teach at some of the nation’s top business schools, such as Harvard and the University of Michigan.

But Anandalingam, who spent 15 years as a faculty member at the Wharton School before coming to Smith as a professor in 2001, says not every student needs a business degree.

Still, the educator scoffs at the notion of using Microsoft Corp. founder Bill Gates and Facebook Inc. CEO Mark Zuckerberg as entrepreneurial models.

Both men failed to complete a college degree, and though they achieved tremendous success, Anandalingam stressed that Gates and Zuckerberg were two cases that turned out well out of a pool of thousands that ended badly.

“I’m sure there are thousands of people who dropped out and crashed and burned,” Anandalingam said. “But nobody talks about that.”

Learning by experience

He said college — regardless of what degree a student receives — teaches valuable critical thinking skills in a safe laboratory that does not exist once a person finds themselves competing in the business world.

Even if a student majors in English, for example, he can become a successful businessman — and the time taken to get the degree wasn’t wasted.

“A lot of what college gives you is a way of thinking,” Anandalingam said. “You’re really exercising your brain. … You never know how much of that training is going to help you run a business.”

One thing the school does try to do, though, is apply the training it offers in “experiential learning” opportunities.

The Smith school promotes that kind of learning, in part, through its annual Cupid’s Cup competition. Run in conjunction with one of the business school’s most famous alumni — Under Armour Inc. CEO Kevin Plank — the competition evaluates the businesses plans of students and young entrepreneurs.

This year, Reed Street Productions — founded by Maryland graduate business student Ryan Hogan and childhood friend Derrick Smith — won $17,500 for a zombie race in which racers, spectators and participants playing the zombies all pay a ticket fee. The first race resulted in more than $700,000 in revenue.

“We are only limited by imagination, honestly,” said Anandalingam, who wants to expand the contest — with Plank’s help — to further showcase the imagination of young business students and entrepreneurs.

He said he would like to expand Cupid’s Cup from an event for Maryland students into a regional or national competition.

“It will turn the spotlight of the nation, hopefully, on the College Park, Baltimore region,” Anandalingam said. “If everything goes to our plan, it’s going to be a national competition.”

Flagships and Cadillacs

The program is just another way for the dean to raise the profile of his business school as he battles modern financial constraints through creative programs and fundraising — something Anandalingam said he takes part in at a “fairly significant clip.”

The Smith School Annual Fund, which kicks off its first campaign July 1, should raise $1 million for the school in the next year, he said.

The fundraising efforts, coupled with reductions of some staff and the slowdown of physical expansion at Van Munching Hall, are all an attempt to battle the financial stress caused by the “softening of the MBA market” and University System of Maryland budget cuts.

Anandalingam said tough financial decisions are part of his job, but maintaining quality at the school is just a “matter of having the right principles.”

So will the school eventually dump its MBA program, and focus on the new generation of students seeking specialized, trade-driven education?

“I don’t think anybody is going to eliminate the MBA program,” he said. “Take General Motors. I mean, for years and years they were losing money on the Cadillac. But they said we cannot just get rid of the Cadillac. That is our flagship.”

So schools such as Smith will continue to sail that flagship. But, just like General Motors made its money on Chevrolet during the down times for its flagship, business schools will have to start making money on their new degree programs, he said.

In that respect, Anandalingam thinks the university’s business school is already on the right track. It’s all about rolling with the economic punches and adapting to change in the marketplace.

“We want to be part of this ecosystem that helps start companies,” he said.

G. “Anand” Anandalingam

Age: 57

Family: Wife, Deepa and two children: daughter Kavi, 21, a rising senior at Yale University, and son Siddhu, 19, a rising sophomore at Columbia University.

Education: Ph.D., Operations Research with Economics, Harvard University; S.M., Operations Research with Economics, Harvard University; B.A., Electrical Sciences, Cambridge University

Work: Dean, Robert H. Smith School of Business, 2008-present; Ralph J. Tyser Professor of Management Science, 2001-present; Senior associate dean, 2007-2008; Founder and director, Center for Electronic Markets and Enterprises, 2001-2004; Chair, Department of Systems Engineering at the University of Pennsylvania, 1997-2001; Director, Executive Master’s Program in Technology Management at the University of Pennsylvania, 1990-1995

Affiliations: Senior member, Institute for Operations Research and Management Science and Institute of Electrical and Electronic Engineers. Previously was associate editor of Management Science and Operations Research, and served on editorial boards of the Journal of Telecommunications Systems and Networks and Spatial Economics.