This week’s GMAT challenge from PrepForTests.com is a problem solving question.

Have a go at answering this and then review your answer.

A survey discussed in the latest QS Top MBA newsletter reveals that controversial industries such as tobacco, oil and defense are a far lower priority for MBA aspirants than service industries, even though salaries are competitive. So what’s keeping MBAs away? According to survey findings, employers in controversial industries are up against a largely unfavorable public perception. “I looked at careers in the defense and oil industries, though I didn’t consider tobacco for personal reasons,” says one MBA. “There was one negative news story after another, especially about the arms industry. I thought the lifestyle may be problematic, even though salaries were competitive and the offers enticing.”

Elsewhere, a study of more than 500 MBA students by consultancy Hill & Knowlton has concluded that, for three quarters of them, a company’s corporate reputation would play a critical role in helping them to decide whether or not to take up a job offer. Nearly six out of 10 said they were not interested in working in Russia, and more than half would spurn job opportunities in Eastern Europe, with a similar percentage dismissing the thought of working in the Middle East.

When it came to sector, the graduates, who came from business schools in Europe, the United States and Asia, said they much preferred industries such as banking, finance, IT, technology and energy over more traditional (yet still multi-million dollar) sectors such alcohol, chemicals and tobacco. What this showed, argued Hill & Knowlton, was that, for some industries and locations, their tainted reputations would make them losers in the global war for the talent.

But by demonstrating a commitment to a responsibility strategy, even companies with serious image problems can change the face of their industry. As a result, the QS International Recruiter Survey 2007 finds, many big business schools are embracing the movement towards corporate social responsibility and to the social network they operate in by adding courses and specialized departments to keep their MBA students happy. Thomas Cooley, Dean of New York University’s Stern School of Business, tells The Economist that “demand for CSR activities has just soared in the past three years.”

The website Beyond Grey Pinstripes – Preparing MBAs for Social and Environmental Stewardship — provides a ranking of courses featuring social and environmental content. Rich Leimsider, Director of the Center for Business Education at the Aspen Institute, says: “We know there are thoughtful people in the controversial industries such as defense and energy. These are people thinking about the impact their organizations have on communities and on the environment. Our hope is that people from the schools we review, with a strong social and environmental awareness, continue to go into those kinds of industries.”

Interestingly, the Hill & Knowlton study also found that MBA candidates were, by and large, more attracted to publicly listed companies or venture-funded institutions than to family or government-owned entities. Whether it was the location of a job, type of industry or the ownership structure of the company, the one thing that was clear about the current crop of elite MBA candidates was that they wanted to work for organizations where reputation played a huge role.

This week’s GMAT challenge from PrepForTests.com is a problem solving question.

Have a go at answering this and then review your answer.

Frequently, the most effective learning takes place outside of the classroom. Case in point: a DePaul University business course that teaches negotiation skills via the local Swap-O-Rama, where students are tasked with getting the best deal possible for a maximum of $10.

A recent Chicago Tribune piece highlighted the flea market assignment, created by veteran business school professor Steven Briggs. Favoring real-world lessons over PowerPoint lectures, Briggs has earned the business school’s excellence in teaching award four of the last 12 years—an impressive feat, considering professors can’t win two years in a row.

Most students in Briggs’ course have never stepped foot into a flea market, and thus learn the hard way that faux-pas such as wearing $300 sunglasses make bargaining for $.50-1.00 discounts laughable, or perhaps insulting, in the vendors’ eyes.

Armed with their Swap-O-Rama purchases, students head back to the classroom and describe how they negotiated their successes and what went wrong in their failures. After analyzing their experiences, Briggs outlines key strategies in effective negotiations, an outcome defined by all sides feeling like they won. By the end of the class, students have a laundry list of tips, including: Do your research. Show restraint. Be willing to walk away. Develop rapport.

“The idea is to practice on the little stuff and then get better. We have a good time with it, but we learn from it,” Briggs said. “We then can apply the [negotiations] theory to bigger things like cars, houses, corporate mergers.”

Herb Cohen, author of “You Can Negotiate Anything” – required reading for the DePaul students — praised the flea market assignment, saying it addresses negotiation factors such as rejection, deadlines and power.

“Later on in life, these people from DePaul who have MBA degrees … will never go into a flea market, even when dragged in,” he said. “But they will use these techniques and approaches and attitudes to make big deals and save millions of dollars.”

DePaul University students learn the following theories by shopping at the Swap-O-Rama flea market:

*Everything is negotiable.

*Arrive prepared and having done research.

*Consider your appearance.

*Schmooze the other party: Make it personal.

*Don’t bargain with yourself; get the other side to make an offer.

*Be respectful.

*Be patient.

*Be willing to walk away.

Source: DePaul University Professor Steven Briggs