Adapt or die

BUSINESS at CarringtonCrisp is brisk, says its owner, Andrew Crisp. The British management-education consultancy produces a range of ‘state of the business school market’ reports, but its core work is advising business schools on how to remain relevant. A large number of schools worldwide are calling on its expertise. “We do more MBA work than anything else at the moment,” says its owner Andrew Crisp. “Schools come to us and say: ‘Numbers are getting a bit low; we’re not going to have enough people on programmes. Can you come and help us revitalise our MBA?’”

Increasingly, that means moving the teaching on an MBA away from its strong finance-based history to more specialised industries. As financial firms, traditionally a major employer of new MBAs, cut down on their hiring, students are seeking more specific knowledge from an MBA programme. Mr Crisp helped the University of Exeter draw up specialisations in purpose-driven leadership to appeal to applicants increasingly looking at charity, non-governmental or entrepreneurial jobs after graduation.

We have long discussed the waning fortunes of the MBA programme, and though its malaise is still not terminal, it continues to lose ground to cheaper, specialist masters degrees. In the United States, three-quarters of masters in data-analytics programmes reported application growth in 2017 to the Graduate Management Admissions Council (GMAC), the body which administers the GMAT test, compared with a third of full-time two-year MBA programmes. Call it revitalising or retrenchment, one thing is clear: there is a significant degree of change within the MBA marketplace.

That is borne out by prospective students. A recent survey published earlier this year by CarringtonCrisp found that two-thirds of 1,000 prospective students from 100 countries surveyed are considering taking a masters, rather than an MBA, in the coming years, up from half of those asked in 2016. Opinions differ by country: three-quarters of Chinese students are leaning towards taking a masters rather than an MBA. Until recently a masters was seen as a cheaper, less academically rigorous programme, but things are changing. Fully half of respondents globally believe employers hold both programmes in equal esteem, though again, perceptions differ depending on the location. Only one in eight Canadian students thinks MBAs and masters are seen as equally well-regarded, whereas two-thirds of Pakistani students see them as equal. 

Specialist masters are shorter—and more importantly, cheaper—alternatives. Grants and scholarships make up the largest share of funding for MBA programmes, accounting for more than a quarter of fees, slightly more than a student’s personal savings or income, according to GMAC. Students want to get onto the employment ladder more quickly, and the gap in standards between the MBA and masters programmes has narrowed, particularly when the default route for many MBA graduates is no longer into the highly-paid worlds of finance or consulting. The increase in big-name business schools such as London Business School (LBS) offering specialist masters is making prospective students’ choices easier: they can still get the well-renowned school on their CV, says Mr Crisp, while paying less than they would for an MBA. A Masters in Management at LBS sets a student back £31,400 ($43,100) compared with £78,500 for an MBA. 

Business schools are also changing the way their MBA is taught. Some schools, including LBS, are offering shorter programmes, allowing students to get a return on their investment quicker. The content is changing, too. Case studies are being adapted to reflect the increasingly globalised world of business, and to appeal to the large and growing numbers of Indian and Chinese students, who are rarely represented in the western-centric case studies that currently comprise the majority of courses. Asian business schools, including Singapore’s Nanyang Business School, are developing Asian-centric case studies to better mirror their student cohort.

These changes are long overdue, reckons Mr Crisp. After years of continued growth for the MBA, there is a recognition that the qualification may have expanded too far. Even as the MBA celebrates its 110th anniversary, business schools may have become complacent about keeping it competitive for generations to come. Yet with every request Mr Crisp receives to rejuvenate programmes across the globe, there is a growing recognition that may no longer be the case.

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