Q&A/Wharton’s director of admissions talks about the challenges of attracting top students in a climate that’s turned chilly for business schools everywhere.

In Rose Martinelli’s second year as director of admissions at the Wharton School, the school received more applications than ever before.

The year was 2001, Enron was in the future, and Wharton’s admissions office received a record 8,400 applications. Martinelli and her team were charged with finding, among thousands of more-than-worthy candidates, the 800 very best.

“ We had a heck of a lot more applications than we expected,” Martinelli says, looking back. “And we pulled it off. It was brilliant.”

Four years later, the challenge facing Martinelli is different. A string of corporate scandals, the 9/11 terrorist attacks, the war in Iraq, demographic shifts and a slumping economy have conspired, starting in 2002, to make MBA programs less attractive to the best and brightest students.

Applications to MBA programs fell sharply and have yet to recover. Now Wharton, like other top business schools, is engaged in an ongoing battle to attract a smaller pool of top students—all the while wondering just what the future may hold for MBA education. “You have to view the demographic issues, economic issues and geopolitical issues, but all of those are so complex at this current moment, we don’t know how to predict it,” Martinelli says. “You have to stay steady, stable and committed.”

Q. You’ve been director of admissions since 2000. How has the experience been so far?
A. It’s been great. It’s been an amazing ride. My second full year here as director was the largest number of applications we ever received. It was also the same year we tried to pull off a huge paradigm shift in how we did things. We went from interviewing everybody to interview by invitation and from rolling admissions to rounds. So here we go, we make this huge change, and then we have [record admissions]. The team was so strong and it was really just a great time. But since that peak in 2002, we’ve been on a steady decline.

Q.Why is this happening?
A. There are a lot of issues playing into that. We had the corporate scandals. We had the demographic turns, in terms of the number of graduates graduating from college at the time.

We had economic difficulties, so there was a fear of not being able to get a job once you got your MBA. We had overall global economic instability. It was all those things. Everybody saw it. I think when students are a little more risk-averse, they tend to go where it’s safe.

Q. It seems there’s a lot more MBA programs and business programs out there than ever before. What does that mean for Wharton, and business education in general?
A. Everybody is really developing multiple product lines. From the one-year to the two-year, from the part-time to the executive MBA to the mini MBA programs that don’t even require the GMAT anymore. There’s a lot of stuff, because it was considered, back in the heyday of the ’90s, that this was a place to make money. It didn’t matter who you were, so everybody was opening up MBA lines. There’s great variation in what you get out of an MBA. I think making clear what the value propositions are is very important, because the one-year and two-year programs are very different.

Q. Even though applications are down, you still received 6,000 applications this year for just 800 slots, and it would seem you’re still going to get a high-quality class.
A. When you lose that much of your pool, it’s scary. This year we were absolutely flat over last year, and that doesn’t necessarily make me feel so good. It’s not just Wharton. If you look at the total number of GMAT takers, that has fallen rather dramatically, especially internationally, over the last three years. And as the pool shrinks, so does that top tier ... which means as you divide them across the top few schools, the battle for the best talent increases. I worry about the international numbers. They have fallen. The only stable group ... is Asia.

Q. What do the international students do for Wharton?
A. If you are educating the next generation of leaders, you really need to have representation of strong candidates from all over the world, and all the cultural differences in terms of how business is practiced in that culture, in order to make a vibrant learning environment. We’re all impacting each other because of the shared experience of the two-year MBA. It’s a leadership development opportunity that really needs that cross-cultural piece to it.

Q.What other groups do you want to target?
A. The number of women and students of color in the MBA is abysmal … [but ] that number should be a number that is rising, since law, medicine and others have risen. So why is that? We’re trying to … understand that great candidates can be admitted with two years work experience or 10 years work experience.

Q.Tell me about the application and admissions process at Wharton.
A. We use the application as the tool by which we look at an individual. That application has multiple components. It has a number of essays, where we talk about paths and plans and scenarios for them to respond to. It deals with data points, such as work experience, and extracurricular involvement. Then the academic components, the GMAT scores, the transcripts. ... And then you have the recommendations, which are external viewpoints.

You’re always trying to ferret out: “Is this a great application, or a great applicant?”

Q. Evaluating 6,000 applications has to be a time-intensive process. How does it work?
A. I have 65 trained second-year MBA students who work in groups of about 12 who report to my associate directors. They read the applications in batches of 15, cover to cover, and they do an analysis on multiple points ... and then give us a bottom-line decision. That file goes on, with a spate of ratings and rankings—a 1 is the best and 6 is the worst. The associate directors read it, and then decide whether those decisions are correct or not. And then they are either invited for an interview or sent to me to be denied. ... The interview report comes back to the file and then it goes up for another read. The interview is not the tilting point, but another evaluation point of what their personal skills look like. Then the class begins to float up. The 1s and the 2s get admitted, the 3s and 4s have to be wrestled with, and the 5s and 6s are denied.

Q. I would imagine, because Wharton is Wharton, that even some of those 5s and 6s are pretty impressive candidates.
A.We say that 80 percent of our applications are admissible, just based on the data points. But then we always look for the right fit. For us, the three components of leadership are personal development, professional development and community impacts. We want to see students’ progress on each of those parameters.

Q. What schools is Wharton competing with?
A. It’s always the same. We compete head to head with Harvard and Stanford, and those are single brands that are very strong, with very, very different types of MBA programs. Then there’s a few others that we will compete with—Kellogg and Chicago and Columbia. We probably lose a bit more to Harvard and Columbia and win a lot more over the other schools.

Q. Looking into the future, do you expect MBA programs to become more attractive? Will the tide begin to turn?
A. I think the rate of the decline is slowing, which is great news. Will it begin to pick up again? It’s unclear. I have a feeling we may stay fairly flat for a while, while the market is so crowded and while we’re trying to create better tools to communicate one-on-one.