The State of the MBA

Fewer employers are helping workers earn an MBA. Meanwhile, programs are adapting to an increasingly global business environment as well as student demand for shorter, more focused degree programs.
Global MBA business changes

About 25 years after graduating from the Stanford Graduate School of Business with her Master of Business Administration, Denise Brosseau returned to the school to teach. She said initial observations of her class show that the types of students are much different than when she was a student. There are more women, a greater diversity of ethnicities, people from differing economic backgrounds, perspectives and fields than when she graduated in 1993. She also sees students having completed more international work.

“They bring a lot to the classroom,” said Brosseau, who lectures on thought leadership and is CEO of Thought Leadership Lab, a consultancy for aspiring thought leaders and organizations. “That diversity of what’s happened in our economy is also true among our students.”

While technology has brought more students online, top MBA programs remain rooted in the in-person experience. The most valuable part of Brosseau’s experience gaining her MBA was the community she engaged with due to in-person class time as well as time socializing afterward.

“We think there is a lot of benefit to having people at the same time, in the same location, doing the same courses, physically together,” said Urs Peyer, dean of master’s programs and associate professor of finance at INSEAD. “There’s a lot to be learned by that, which is harder to do online, at least as a degree program.”

At least half of the MBA education comes from discussion with peers, according to Peyer. “That part, you just miss entirely in an online education or to a great extent, at least,” Peyer said. Online doesn’t foster valuable networking in the same way as in-person courses yet, but for those who can’t devote the time for a full-time program, online is probably a good second best, he said.

Still, online and part-time programs have seen more growth than full-time, two-year MBAs. According to the Graduate Management Admission Council, or GMAC, part-time, lockstep MBAs and full-time, one-year programs have seen the most growth in recent years, whereas full-time, two-year programs have been on the decline, with 51 percent of programs reporting fewer applications than years past.

“While the traditional full-time, two-year MBA model remains in high demand, it may not be the right format for every candidate,” said Tania Hernandez-Andersen, director of corporate brand communications and creative services at GMAC, a global, nonprofit association of business schools that advances the art and science of admissions on behalf of schools and students.

Going Global

Another notable change to MBAs is the shift to a global focus and increased availability of programs internationally. Hernandez-Andersen pointed to an increase in programs outside of the United States. “In 2000, there weren’t any Asian programs ranked in the Financial Times top 40; in 2016 there were eight,” she wrote in an email to Talent Economy. GMAC data shows that 32 percent of U.S. programs saw an increase in international applications, whereas 67 percent of European programs and 77 percent of Canadian programs experienced higher application volumes.

INSEAD’s Peyer echoed this point, saying that nationalistic preferences pose a challenge to MBA programming. “The more barriers that the political environment builds, the more of a challenge it could be to have a global value proposition, a global education,” he said.

Both globally and in the U.S., there’s a shift to shorter, more specialized programs, Peyer said. Opting for a master’s in management instead of an MBA is a popular decision, which has even prompted the University of Wisconsin to consider ending its full-time MBA program altogether to focus on shorter, specialized degrees, according to The Wall Street Journal.

Course Content

Naturally, as the business landscape changes, so does MBA course content. Peyer noted that programs have developed a greater focus on data, specifically how to use it to help companies better serve customers. Thus, INSEAD offers more electives on data and technology strategy.

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INSEAD is also focusing more on personal leadership development, offering professional coaching on individual and group bases, Peyer said. The idea is to help students gain self-awareness and the ability to reflect, improve their communication to express their values as leaders and manage teams in a globally diverse environment. This coaching used to be more prevalent in executive MBA courses than the traditional, full-time program, he said.

These soft skills help students when they go back into the business world and manage people. The traditional method of simply teaching students, giving them a test and handing them a diploma isn’t indicative of the real world, said Jing Zhou, professor of management at Jones Graduate School of Business at Rice University in Houston. Instead, it’s increasingly about soft skills like how to work with a team, craft a vision for the future of a business, communicate that vision and persuade employees to follow through. These trends prompted Rice to redesign its curriculum to greater emphasize these skills. Top schools allow students to practice soft skills in the classroom, Zhou said.

Business Leaders and Business Schooling

Employees hoping to gain an MBA can expect to cover the costs themselves. As reported in the Chicago Tribune, GMAC surveys of employers found that in 2011, 68 percent of companies helped pay for part-time MBAs, whereas in 2013, that number more than halved to 30 percent.

Rice’s Zhou said that instead, business leaders should encourage their workers to continue to learn, and that encouragement should be through flexible arrangement of time, as well as through tuition reimbursement. The skills employees learn will be of value to the organization.

Technological advancements, the speed of the global marketplace and the increasingly competitive business landscape means “people who continue to learn will be very successful. People who just rely on [their] existing body of knowledge are going to be obsolete very quickly,” Zhou said. And an MBA is just one way to continue that education.

Lauren Dixon is an associate editor at Talent Economy. To comment, email editor@talenteconomy.io.