Fast-Track Master's Programs May Pose A Threat To The MBA
As applications to two-year MBA programs have fallen off a cliff edge, specialized Master’s degrees have risen in popularity. Could they become the dominant business school degree?
It had not been a good year for some business schools. For months the GMAT test takers had been spurning the two-year MBA program, the once-popular in gem of management education.
After a stellar season in 2009, when the two-year option peaked, applications had dropped off a cliff edge. What made the fall worse was that the majority of drop-outs came from the United States – where 70% of all applicants now want to study.
As admissions officers stomped into their offices on Tuesday morning, however, they were in for a bigger surprise. The news was already splashed across business ed publications: specialist Master’s programs, most of which are short and sharp, had gained significant ground.
Nearly 50% of applicants considered them. Over five years, 20% of candidates ditched the MBA and opted solely for a Master’s program.
MScs, the fast-tracking younger sisters of MBAs, had been breaking into business schools across the globe for years. Many schools are finding that students only consider the specialist program. MBA programs are famed for a generalist approach.
“Business schools are drawing more diverse students overall,” said Gregg Schoenfeld, GMAC director of survey research. “But they are finding the applicant pools becoming more distinct.”
GMAC’s survey, which gathered the thoughts of 12,000 business leaders, marks the confirmation of the MBA’s slowing appeal. Last year, GMAT takers opting for the two-year MBA fell from 90,000 to 70,000. That is nearly 30% less candidates than five years ago.
A two-year format is the preferred choice in the States – but appeal there has dropped 24% since 2012.
It also represents the big concern of the next generation. Future CEOs have spent recent years fretting about how to take so many months out of work. It explains why executive education rates have risen to 15%. Interest in other part-time study has risen to nearly 30%, although this is disputed.
EMBAs have been the Holy Grail for those seeking flexibility. “I couldn’t turn my back on my job and take a year off. I can’t imagine not having any income for a whole year,” said Anthony Eid, an Executive MBA student at GEM.
Specialist Master’s programs are a different beast. By offering specific focuses, they arguably better gear graduates up for certain jobs.
The survey announcement comes after several years of big brand MSc launches. London’s Imperial College Business School has nine such programs. Grenoble Ecole De Management – GEM – has eight. Most schools run them alongside MBA programs.
According to students, the benefit lies in the length. It is a quick route to a management career and Master’s programs are seemingly all about jobs. The MM program at Sauder School of Business in Canada is essentially designed to fast-track careers, says Laura Rojo, director of recruitment and admissions at the school.
Others have suggested there is a greater practical element. MBA programs are sometimes criticized for being too heavy on theory.
“I was extremely attracted by the opportunity to learn as much through doing as through studying the theory,” said Natasha Baranowski, a graduate of Imperial's MSc in Innovation, Entrepreneurship & Management.
MBA programs, which still remain the preferred choice, can console themselves with high employment statistics – although Master’s programs are gaining ground.
In the summer of 2013, a leading U.S business school announced plans for a new one-year MBA in New York City. At $95,000, it wasn’t billed as cheap.
Cornell’s Johnson School had already begun moving away from the two-year model with a one-year accelerated MBA program on the university’s main campus in Ithaca. A second program showed their intent.
“We think it has the potential to be in the hundreds of students each year,” said Doug Stayman, Cornell’s associate dean of MBA programs.
High-profile schools have followed suit. Emory’s Goizueta and Northwestern’s Kellogg have drawn headlines for their accelerated one-year MBAs. USC Marshall also offers a similar program.
The hope is that shorter programs will scoop-up Americans worried about staying out of work for longer than necessary. At Kellogg, one-year applications jumped up 24 per cent between 2009 and 2011.
Kate Smith, an admissions director, said they planned to expand the class by up to 30%. Emory’s program applications soared 39 per cent in 2012.
Yet two-year programs continue to lose traction. The biggest losers may be in the States. While Europe has warmed to shorter programs, few U.S schools have taken to the idea.
The Fuqua School of Business and Michigan Ross now have mid-length programs lasting 16 months. But most schools stick with the two-year option.
European programs have set the trend. ESADE Business School offers three different length options - between 12 and 21 months. London Business School has similar flexibility built into its programs.
HEC Paris, the leading French school, only offers a 16-month option for its full-time MBA. Bernard Garrette, an associate dean at the school, said that the program gives students enough time to get in-company experience – and the chance to specialize.
Whatever may be said about the length of programs, it is worth noting that two-year programs in the U.S remain a dominant feature of most MBA rankings. Students still struggle to get into programs. Few admissions directors will be losing sleep over the rise of Master’s courses.
School insiders vented their frustrations at the rise of pre-experience programs. Many Master’s degrees target those with no formal business background. Top MBA programs require several years of industry experience.
Some commentators argue schools are jumping on the bandwagon and snapping up green students, who bring little benefit to cohorts. “Do they have the ethos of an MBA or [are they] jumping on a gravy train?” asked one program director, who didn’t want to be named.
The excitement of shorter programs is tinged with unease. There is understood to be a huge benefit to the experience-rule that some schools still abide by. Recruitment directors have said simply obtaining a business degree won’t cut it with recruiters – experience is just as crucial.
“We never really hire fresh grads – they always have to have some kind of work experience relevant to the area they go into,” said Marie Sullivan, a Talent Sourcer at technology giant Gartner.
The more diverse an experience students have, the richer the learning environment will be.
“Students with experience bring practical problem-solving to the classroom, and they can learn from each other how a theory might apply across many industries,” said Phil Carter, head of MBA marketing and recruitment at Imperial.
Eyebrows have been raised. But even as interest in two and one-year MBA programs declines, there is no lack of candidates to pick from. Many are reserved for the elite. The majority don’t make it onto their ideal programs.
Schools, however, are adapting. From out of the darkness, specialized Master’s programs will keep chugging on.