Higher education has seen a decline in MBA interest over each of the last four years even at the prestigious business schools.
Could specialization help boost business school enrollment while simultaneously preparing students for the deep work expected in today’s business environment?
Dr. John Quelch, Vice Provost at the University of Miami and Dean at the Miami Business School, joined the Enrollment Growth University podcast to talk about why students are moving away from the traditional MBA and toward specializations.
Why Is Interest in the MBA Declining?
“First of all,” John told us, “the salary uplift between entering and exiting salaries at all but the major schools has not held up in terms of its comparison with the overall cost of the MBA degree as well as the opportunity cost of being out of the workforce for two years.”
That means the ROI on the full-time MBA does not attract to prospective students. More specialized one-year programs, however, generate a lot more interest.
“Secondly, I would say that many companies these days are doing a much more assiduous job of retaining talent once they have good talent,” John said, “and not encouraging that talent to exit to take a full-time MBA.”
Many enterprises now focus on recruiting top seniors from undergraduate business programs or from undergraduate programs in general, train them up in their own organizations, and then try to hold on to them rather than letting them go.
Why Specializations Could Be the Solution to MBA Decline
If you have a product that has been your core product, let’s say the full-time MBA, and that product starts edging into decline, you want to keep resources flowing into that program. After all, the business school rankings still depend heavily on the comparative ranking of the full-time MBA program.
“But at the same time,” John said, “you’ve got to shore up your defenses.”
The University of Miami does that by offering a variety of MBA options. The school provides a one-year, online accelerated MBA for people who have achieved a full-time undergraduate business degree. Prospective students who are employed during the week can attend an executive MBA on weekends and evenings.
Miami’s second avenue has been to explore specialist master’s degrees.
“Originally I think this developed primarily in accounting,” John said. “So many, many business schools around the country also have accounting schools or significantly large accounting departments where there historically been developing master’s in accounting students who also move those credits into qualification for CPA.”
Out of the accounting experience there developed an interest in the master’s in international business, then finance, and later in other specialized subjects. The hardest of all of these master’s degree programs to come on stream in the last two or three years has been the masters in business analytics.
“This year,” John told us, “we have a hundred students who are graduating next month with that MS degree.”
The Flipped Format: From Specialization to MBA
The university developed the flipped (specialization to MBA) format in the last year, and it emanates from the fact that there is more interest in the specialist 10-month program than in the two-year, full-time MBA. Still, a number of students take the 10-month program and then realize that actually they need more than 10 months worth of finance to do what they want to do in their careers.
“They do need some strategy, they do need some marketing. They do need some organizational behaviors and leadership skills and team building and so on,” John said. “And so they’ll take potentially the first year of the MBA and as the second year of a two-year combined program, and potentially graduate with both an MBA and an MS degree.”
Whereas in the traditional two-year MBA, the first year is the generalist portion of the curriculum with a major in the second year, in the flipped model, students take the major first and then broaden out to the generalist first-year MBA curriculum in the second year.
The Enrollment Results from Specialized Business Degrees
The specialists master’s degrees are significantly more important than full-time MBA programs if you’re measuring purely on number of students enrolled.
“Our full time MBA program, I believe this year has approximately 70 students enrolled in two sections of 35,” John said. “Meanwhile, as I said, the master of business analytics has a hundred students enrolled. And similarly our accounting and finance master’s degrees are heavy enrollment programs as well by comparison with the full time MBA.”
A number of students are taking the MBA and executive and/or other accelerated formats. So you have to look at the overall MBA enrollment across all MBA degrees as opposed to just the traditional full time two-year MBA. But even that said, the specialist master’s degrees really do seem to have gained a tremendous amount of traction.
Next-Steps Advice for Other Institutions Considering Specialized Master’s Degrees
The case is still strong that generalist degrees prepare graduates for a career in management and then leadership positions. As long as Harvard Business School, for example, only offers a full-time, two-year MBA, then that model will be the anchor for comparative business school rankings.
“In a way,” John said, “that is what’s propping up the full time MBA degree, the reality of the ranking, the ranking being so important and the reality of the top schools being continuing their focus on that particular degree, and it’s delivery.”
But we are in an environment where change is happening so quickly and preferences shift so rapidly that any prudent institution needs to balance out a portfolio of degree program options. When diversified stock portfolio of one sector inexplicably or unexpectedly arises or falls, the others will compensate accordingly. This educational approach also helps diversify our risk by having a v significant and balanced portfolio of options.
“I might add that the specialist programs do act as a very important incentive for faculty in the departments where there are specialists programs,” John said, “They get to expand the size of their departments beyond what they would have if they were just focused on teaching the two-year MBA.”
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