Chicago Booth to Increase On-campus Internship Offers

Case Type: operations strategy, value chain; math problem.
Consulting Firm: IBM Global Business Services (GBS) first round summer internship job interview.
Industry Coverage: Education & Training Services.

Case Interview Question #00755: The Booth School of Business is a graduate business school located in Chicago, Illinois, at the University of Chicago. Formerly known as the University of Chicago Graduate School of Business, Booth is the second-oldest business school in the U.S., the first such school to offer an Executive MBA program, and the first to initiate a Ph.D. program in business. The school was renamed in 2008 following a $300 million endowment gift to the school by alumnus David G. Booth. US News, in the 2013 Best Business Schools ranking, ranked Chicago Booth 4th in the U.S.

The Booth School of Business is looking to promote its MBA program’s reputation and ranking position, by improving its on-campus summer internship employment stats. Currently, only 60% of Booth’s first year full-time MBA students secure an internship through on-campus recruiting. The Dean of Chicago Booth has hired our consulting firm to provide insight and recommendations on how to improve the on-campus offers. What would you recommend him to do?

Additional Information: (to be provided upon request)

Assume that Booth School of Business has 500 full-time MBA students in each class.

Push the interviewee to understand the “value chain” of on-campus recruiting (see below)

Wait for the interviewee to ask clarifying questions about specific objectives of this case:

• Primary objective: increase on-campus internship offers to 75%.
• Secondary objective: the school administration is very cost sensitive and is only willing to spend up to $500K on this project.

Possible Answer:

1. Value Chain Analysis

First, ask the interviewee to brainstorm the value chain for Booth to assist its first-year MBA students to get internship offers.

Data for current on-campus recruiting:

• # of companies that recruit on-campus = 100
• average # of positions offered per company = 2
• # of interview slots per position = 15
• Interview success rate = 10%

(assumption = each MBA student receives only one offer)

Then, ask the interviewee to brainstorm on possible ways to increase the number of total offers made (he/she should go over the “value chain”)

The Booth school is looking into two possible strategies:

• Increase the number of companies that recruit on campus
• Improve the interview success rate

2. Quantitative Analysis

a. Increase the number of companies

To attract more companies to recruit on-campus, Booth’s Office of Career Services (OCS) needs to hire additional firm relations managers.

Each manager can handle 5 companies and requires an annual salary of $75K. Additional costs (including travel, marketing expenses, etc.) per relations manager are estimated at $50K.

Target # of offers = 500 * 75% = 375
Current # of offers = 500 * 60% = 300
(375 – 300) / 300 = 25%

Thus, Booth needs to increase the number of companies recruiting on-campus by 25% * 100 = 25
# of additional OCS firm relations managers needed = 25/5 = 5
Annual cost of firm relations managers = 5 * ($75K + $50K) = $625K

b. Increase the interview success rate

The interviewer should have the interviewee brainstorm on possible ways to increase interview success rate.

According to a recent survey, the most important factor in interview success rate is the number of mock interviews. For every 0.5% increase in interview success rate, Booth will need to hire 15 second-year MBA students as part-time mock interview counselors.
Each second-year MBAs works 40 hours per month, with an hourly wage of 20$.
Recruiting season lasts for 5 months.

Also, every 2% increase in interview success rate attracts 5 new companies that recruit on campus.

Thus, adding 2% in interview success rate:
(100 + 5) companies * 2 offers per company * 15 interview slots per offer * (10% + 2%) success rate = 378 offers
Annual cost of second-year MBAs = 2%/0.5% * 15 MBAs * 40 hours per month * 5 months * 20$/hour = $240K

Note: A good candidate will make sure that we have sufficient second-year MBA “Capacity”.

3. Conclusion

a. Recommendation

Recommend that Booth hires 60 additional second-year MBA students as part-time mock interview counselors. This will increase the total number of internship offers from 300 to 378 (meeting the goal of increasing on campus offers to 75%).

b. Possible Risks (mitigation / next steps)

• Difficulty recruiting so many second-year MBA students (can even increase hourly wage up to $40 without exceeding target budget of $500K)
• Economic downturn may cause companies to reduce the number of internship positions / slots.
• Limited # of study rooms at Booth to accommodate such an increase in the # of mock interviews (reach out to graduate school, law school, medical school, etc to get access to their rooms).
• With so many second-year MBAs spending so much time on mock interview counseling, their grades may be negatively impacted, affecting the total Booth brand image (employ grade non disclosure policy).