Full-time MBA courses: Thinning the herd

IN RECENT months, The Economist has cautioned against writing the obituary for the MBA programme globally. The lull in demand for MBAs is mostly limited to the United States, and can be explained by two factors: unfriendly immigration policies, and a market that has expanded too much without maintaining standards.

Rather, the full-time MBA is undergoing what business-school graduates would call a retrenchment—and the rest of us would call a thinning of the herd. Schools have to compete not just with each other, but also against shorter, cheaper programmes such as the Masters in Management (MiM), which attract younger applicants. Some new business schools, such as King’s College in London, are not offering an MBA programme at all, favouring MiMs instead. Other schools are reviewing the benefits of a pricey resource-intensive course. On October 20th reports surfaced that Wisconsin School of Business at the University of Wisconsin-Madison was considering plans to suspend its full-time MBA programme. But on October 25th, Wisconsin rowed back, admitting the school had “moved too quickly” and would suspend the suspension. 

Some smaller, regional schools have followed through with plans to close their full-time programmes. Virginia Tech’s Pamplin College of Business and Wake Forest University in North Carolina have wound up their full-time MBA programme over the last couple of years. And earlier this year, the University of Iowa’s Tippie College of Business declared this year’s full-time intake would be its last. Tippie’s academics will go on to teach other part-time business programmes, which are more popular.  At Wake Forest, full-time MBAs made up only 7% of all those enrolled on programmes at the school in any case. Pamplin's choice seems to have paid off: its place in business-school rankings rise after it stopped its full-time programme in favour of part-time evening MBAs.

Other schools have seen a decline in MBA applications, though they are unlikely to lead to closures. In late October the dean of Darden School of Business at the University of Virginia warned that first-round application numbers to its full-time programme had dropped. Ron Wilcox, senior associate dean for degree programmes at Darden, told The Economist he has read plenty of stories about MBA programmes closing down, but does not see that happening at Darden. However, Mr Wilcox did say he wouldn’t want to be working for a second-tier MBA programme in the present market. Growth opportunities in the sector are not promising: “It’s a dangerous spot to be in,” he warned. MBA programmes are costly and require plenty of resources. When applicant numbers drop, those programmes can quickly become uneconomical to run.

Applicants have become cannier. They will not spend thousands of dollars on a two-bit programme at an American business school when a European one will provide better teaching and job prospects for less money. Schools need to become cannier too, or these latest closures are likely just the first of many more to come.

Readers' comments

Reader comments are listed below. Comments are currently closed and new comments are no longer being accepted.

Advertisement

Advertisement feature

Advertisement

Products and events


Take our weekly news quiz to stay on top of the headlines


Visit The Economist e-store and you’ll find a range of carefully selected products for business and pleasure, Economist books and diaries, and much more

Advertisement