A proposal that calls for increasing the relevance of administrator preparation by applying a problem-based learning approach is offered in this paper. A review of literature on problem-based learning (PBL) in medical education concludes that, compared with traditional programs, PBL yields superior or equivalent results on a variety of outcome measures. Eight design issues for PBL programs are identified next: incorporation of PBL into the curriculum; selection and definition of problems; identification of goals for educational administrators; components of small learning groups; the extent of program pre-structuring; evaluation; student orientation; and faculty preparation. A research agenda is proposed to determine the effectiveness of the various species of PBL in achieving the different goals of managerial education. Criteria for measuring independent and dependent variables are also suggested. Encouragement is offered to educators to tackle the challenges inherent in moving from a traditional to PBL approach. (28 references) (LMI)