We've been talking about how the incredible shrinking job market is redirecting America's best young talent to volunteer corps, like Teach for America, and to business schools. Demand - measured by numbers of applicants - is surging on both fronts.

So it's an exciting time to be a business school boss. Yet, Linda Livingstone, dean of Pepperdine's Graziadio School of Business and Management since 2002, tells me that this is her most challenging time ever.

One challenge is meeting students' ever-rising demands for coursework related to social responsibility. Graziadio is responding - with social enterprise programs, a value-centered leadership lab, and case competitions to deem which students generate the most value (social, not monetary!) most efficiently. "They still need to be concerned about profits," says Livingstone, sounding a bit frustrated and wary too. Most companies, she says, aren't recognizing how demanding their future recruits will be in terms of social do-gooding.

Another challenge, Livingstone says, is foreign competition. It used to be that students around the world, seeking a global business education, studied in the U.S. or Europe. Today, they sign up for MBA programs in China or India—or Abu Dhabi, Dubai or Qatar. "Hong Kong and Singapore are putting tremendous effort into their MBA programs," Livingstone adds, "and hiring business faculty has become very competitive." One professor she knows got an offer from a business school in Singapore for three times his U.S. salary.

P.S. I asked Livingstone for her best advice to students. She says, "Be clear on what your values are so that when you face really difficult circumstances - which you will - you'll have a grounding in who you are."