Fri, Sep 27, 2013, 2:00 PM EDT - U.S. Markets close in 2 hrs.
Something at Wharton doesn't add up.
Applications to the University of Pennsylvania's business school have declined 12% in the past four years, with the M.B.A. program receiving just 6,036 submissions for the class that started this fall. That was fewer than Stanford Graduate School of Business, with a class half Wharton's size.
Wharton says the decline, combined with a stronger applicant pool and a higher percentage of accepted applicants who enroll, proves that the school is doing a better job targeting candidates.
But business-school experts and b-school applicants say Wharton has lost its luster as students' interests shift from finance to technology and entrepreneurship.
"We're hearing [applicants say] Stanford, Harvard or nothing. It used to be Stanford, Harvard or Wharton," says Jeremy Shinewald, the founder of mbaMission, an admissions advisory firm.
Wharton over the past century built its reputation as a training ground for Wall Street titans, but the financial crisis closed off many paths to such careers. The school in the mid-2000s regularly sent more than a quarter of its students to jobs at investment banks and brokerage firms. That figure has slid into the teens.
Top institutions—and the Philadelphia-based school is still in that class—responded to the downturn by restructuring their courses and seeking students from less-traditional business backgrounds. Many schools also strengthened their ties to hot technology companies, like Amazon Inc. and Google Inc., and found opportunities for finance jobs at Fortune 500 companies.
The efforts paid off at several schools. Harvard Business School reported a 3.9% increase in applications this year, and Stanford posted a 5.8% gain. But Wharton's applications dropped 5.8%. Columbia Business School reported a 6.6% increase, recovering from a 19% decline last year. And Duke University's Fuqua School of Business stabilized after an 8.4% drop last year.
Some admissions advisers and Wharton professors say the school didn't react aggressively enough when the spigot of finance jobs was turned off and that recent moves, such as a rebranding campaign begun in the spring of last year, did little to clarify the school's profile.
Ankur Kumar, Wharton's director of M.B.A. admissions and financial aid, says quantity doesn't equal quality. The average score for Wharton applicants on the standardized b-school entrance exam, the GMAT, rose seven points this year, to a record 725 out of 800.
"Our focus is on the quality of our applicant population, and that remains as high as ever," Ms. Kumar says. Only those who really want to attend Wharton are applying, she says. The school's yield, the portion of accepted applicants who enroll, rose several percentage points this year to a record, she says, though she declines to disclose the figure.
Some education consultants offer a different take.
Wharton alumnus Eliot Ingram, the chief executive of admissions-counseling firm Clear Admit, says one client turned down a $70,000 scholarship from Wharton this year to attend Harvard because he felt that school had a stronger global brand.
Wharton held the No. 1 spot on BusinessWeek's semiannual Top M.B.A. ranking from 1994 through 2000, at which point Northwestern University's Kellogg School of Management displaced Wharton. The University of Chicago Booth School of Business has maintained the crown since 2006.
To appeal to new audiences, Ms. Kumar now holds admissions events for students considering entrepreneurship and who are interested in such industries as retail and real estate. The school this month also unveiled a business-and-management satellite-radio channel with Sirius XM Radio Inc.
Fiona Fong says she was attracted to Wharton's strong marketing program and data-driven curriculum. She worked in marketing at cosmetics company Estée Lauder Cos. before school and is looking to return to the field.
"When you come out of Wharton, you get the reputation that you can handle numbers and analytics," says Ms. Fong, a second-year Wharton student.
The year after Ms. Fong applied, Wharton introduced a group discussion to its selection process, requiring candidates to demonstrate leadership and teamwork abilities in front of admissions representatives.
"Our guess is that might have made some students reluctant to apply," says Wharton Vice Dean Howard Kaufold. He says he isn't concerned about the application decline and is pleased with the caliber of the school's students.
Dan Lee says he briefly considered Wharton but instead focused on schools that he believed had stronger general management training. Wharton is "typecast as the finance school," he says. For Mr. Lee, a first-year student at Dartmouth College's Tuck School of Business, "going to business school was not about going into the financial sector."
Virgil Archer says he wanted "a frothy tech scene." Mr. Archer, who is in his first year at the University of California, Los Angeles, Anderson School of Management, says Wharton didn't have the same entrepreneurial atmosphere.
Wharton also has lacked continuity. The school has had four admission directors in the past decade. Ms. Kumar's counterparts at Harvard and Stanford have been at their schools for more than a decade.
"If you put a baseball team on the field that's new every year, it's going to be tough to get chemistry and an overarching strategy," says former Wharton admissions officer Graham Richmond, the founder of higher-education consulting firm Southwark Consulting.
Write to Melissa Korn at melissa.korn@wsj.com
Corrections & Amplifications The GMAT exam is scored on a scale of 800. An earlier version of this article stated that the exam was scored out of a possible 750.
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