Bull mar­ket: why busi­ness schools are thriv­ing

The weekly mag­a­zine for higher ed­u­ca­tion

THE (Times Higher Education) - - FRONT PAGE -

The ex­pand­ing mar­ket in ex­ec­u­tive mas­ter’s de­grees is mir­rored by a growth in busi­ness schools of­fer­ing them. But a Times Higher Ed­u­ca­tion/Wall Street Jour­nal anal­y­sis sug­gests that while the two-year MBA re­mains ex­tremely strong, shorter al­ter­na­tives are also be­com­ing highly val­ued in a time-pressed world. Anna McKie re­ports

The MBA has un­de­ni­ably had a stel­lar ca­reer. Dur­ing the cen­tury since its in­ven­tion in the US, the mas­ter’s in busi­ness ad­min­is­tra­tion has be­come a must-have for any ex­ec­u­tive aim­ing to take the next step in cor­po­rate se­nior man­age­ment.

Ac­cord­ingly, busi­ness schools have sprouted up across the globe. Their co­horts of older stu­dents are usu­ally tak­ing time out of wellestab­lished ca­reers, mark­ing out busi­ness schools as very dif­fer­ent beasts from the par­ent uni­ver­si­ties of which they are usu­ally a part – and which are the grate­ful re­cip­i­ents of the sky-high fees the ex­ec­u­tive mar­ket typ­i­cally com­mands.

Times Higher Ed­u­ca­tion has worked in part­ner­ship with The Wall Street Jour­nal to gather a unique set of per­for­mance data from busi­ness schools across the world – based on met­rics pi­o­neered in the WSJ/THE US Col­lege Rank­ings, which are de­signed to ex­plore teach­ing ex­cel­lence and the stu­dent ex­pe­ri­ence. In to­tal, 114 busi­ness schools from 24 coun­tries were ranked in the project, and while some prom­i­nent schools chose not to par­tic­i­pate, the project has pro­vided a range of data, in­clud­ing al­most 23,000 re­sponses to a sur­vey of busi­ness school alumni, sup­ported by the schools. The data al­low THE to com­pare in­sti­tu­tions across a range of busi­ness pro­grammes: two-year MBAs, one-year MBAs, mas­ter’s in fi­nance and mas­ter’s in man­age­ment, and to draw rich in­sights into the char­ac­ter­is­tics of dif­fer­ent in­sti­tu­tions and cour­ses.

The mar­ket for two-year MBAs is dom­i­nated by the US; of the 54 in­sti­tu­tions of­fer­ing two-year pro­grammes that took part in the anal­y­sis, 44 are in the US. And their qual­ity is un­der­lined by the fact that US in­sti­tu­tions oc­cupy the top nine places in a rank­ing of two-year pro­grammes based on the sub­mit­ted data.

The rank­ing is based on 20 fac­tors, en­com­pass­ing in­sti­tu­tional re­sources, stu­dent en­gage­ment, teach­ing en­vi­ron­ment and stu­dent out­comes (see method­ol­ogy sec­tion, page 50, for de­tails).

Anal­y­sis of the score dif­fer­ences be­tween the top 10 two-year MBA pro­grammes and all such pro­grammes sug­gests that the strength of the top schools cen­tres on their greater re­sources, their in­ter­na­tional fo­cus, the salary boost they of­fer and the strength of their alumni net­works.

The key to fos­ter­ing strong alumni net­works is to keep class sizes ‘strate­gi­cally small’. This al­lows for a ‘high-touch, im­mer­sive ex­pe­ri­ence’

Ac­cord­ing to Yossi Fein­berg, se­nior as­so­ciate dean for aca­demic af­fairs at Stan­ford Univer­sity, which has the top-ranked twoyear MBA pro­gramme, the key to fos­ter­ing strong alumni net­works is to keep class sizes “strate­gi­cally small”. This al­lows for a “high-touch, im­mer­sive” ex­pe­ri­ence and, im­por­tantly, fos­ters life­long friend­ships. “Upon grad­u­a­tion, the stu­dents join a tightknit net­work that cre­ates global im­pact beyond the bound­aries of tra­di­tional busi­ness prac­tices,” he adds.

Cher­rie Wilk­er­son, as­sis­tant dean of young pro­fes­sional pro­grammes at Van­der­bilt Univer­sity’s Owen Grad­u­ate School of Man­age­ment, ranked third, ex­plains that her in­sti­tu­tion stays in con­tact with its alumni through events in the cities where grad­u­ates con­cen­trate, adding that a pro­gramme whereby alumni of­fer cur­rent stu­dents one-to-one men­tor­ing also en­sures that those alumni stay in touch with the univer­sity and each other.

Out­side the US, the China Europe In­ter­na­tional Busi­ness School, based in Shang­hai, is the high­est-rank­ing in­sti­tu­tion for two-year MBAs, at joint 10th. Its vice-pres­i­dent and dean, Yuan Ding, says that a lot of the in­sti­tu­tion’s suc­cess is down to two fac­tors. One is China’s eco­nomic growth, and the op­por­tu­nity the school of­fers to in­ter­na­tional busi­ness stu­dents who want to tap into that. The other is the in­sti­tu­tion’s gover­nance, whose em­pha­sis on au­ton­omy and aca­demic free­dom makes it unique in the re­gion. “Our fac­ulty have very fer­tile ground to do their re­search and ex­press their opin­ion,” he says. “We are also now mov­ing from knowl­edge dis­sem­i­na­tion to knowl­edge cre­ation.”

The in­sti­tu­tion’s promi­nence in THE’s anal­y­sis is in­dica­tive of changes in the MBA mar­ket. The Grad­u­ate Man­age­ment Ad­mis­sions Coun­cil’s an­nual Ap­pli­ca­tion Trends Sur­vey Re­port for 2018 notes that most pro­grammes in the Asia-Pa­cific, Canada and Europe all saw in­creases in ap­pli­ca­tion vol­umes this year, while the ma­jor­ity of US pro­grammes de­clined – pos­si­bly as a re­sult of re­duced ap­pli­ca­tions from over­seas, which Van­der­bilt’s Wilk­er­son blames on tighter im­mi­gra­tion poli­cies in­tro­duced by the Trump ad­min­is­tra­tion, and the con­se­quent re­stric­tion on grad­u­ates’ op­por­tu­nity to work in the US post-grad­u­a­tion.

But the change in ap­pli­ca­tion trends could also re­flect an in­creas­ing pref­er­ence for the one-year MBA pro­grammes typ­i­cally of­fered out­side the US. The mar­ket for these shorter MBAs is much more in­ter­na­tional: the top five in­sti­tu­tions in THE’s anal­y­sis are the Univer­sity of Hong Kong, the In­dian School of Busi­ness, the In­dian In­sti­tute of Man­age­ment Cal­cutta, the Aus­tralia-based SP Jain School of Global Man­age­ment and Switzer­land’s IMD.

Since busi­ness school stu­dents are older and tak­ing time out of the job mar­ket, it is per­haps no sur­prise that they are ea­ger to put their new-found skills to re­mu­ner­a­tive use as soon as pos­si­ble. An­drea Masini, as­so­ciate dean in charge of the MBA pro­gramme at HEC Paris, which is 10th in a rank­ing of oneyear MBAs based on the same cri­te­ria as the two-year rank­ing, ex­plains that his school’s

pro­gramme ac­tu­ally takes 16 months – a com­mon du­ra­tion in Europe.

“It’s the per­fect com­pro­mise with the tra­di­tional 24-month US model,” he ex­plains, in terms of the bal­ance be­tween skill ac­qui­si­tion and op­por­tu­nity cost for the stu­dent. “We’ve seen a dou­ble-digit in­crease in the num­ber of ap­pli­ca­tions [for the 16-month cour­ses], which has al­lowed us to grow the pro­gramme and the qual­ity of the pro­gramme,” he adds.

Masini says the one-year model is pre­ferred in Europe partly be­cause it dis­tin­guishes the con­ti­nent’s pro­grammes from the US model. But one-year MBAs are not un­known in the US. Lisa Shatz, as­sis­tant dean and di­rec­tor of MBA pro­grammes at the Univer­sity of Texas at Dal­las’ Naveen Jin­dal School of Man­age­ment, says her in­sti­tu­tion switched to of­fer­ing a 16-month course in 1996 be­cause “there was a need in the mar­ket”. Mil­len­ni­als want more choice, she ex­plains: “They come in with con­fi­dence and want to do things quickly.”

John Fong, CEO and head of cam­pus at the SP Jain School’s Sin­ga­pore cam­pus, says his in­sti­tu­tion’s de­ci­sion to of­fer one-year cour­ses when it was launched in 2006 arose out of a recog­ni­tion not only of stu­dents’ de­sire to get a job sooner but also of em­ploy­ers’ de­sire to “hire our stu­dents faster”.

Masini adds that tu­ition fees for two-year US pro­grammes are con­sid­er­ably higher than for one-year pro­grammes, po­ten­tially set­ting stu­dents back $200,000. That could go some way to ex­plain­ing the gap in scor­ing for the so­cio-eco­nomic di­ver­sity of stu­dents on oneyear and two-year MBA pro­grammes – with the top two-year pro­grammes far­ing par­tic­u­larly badly on that score (the met­ric draws on a sur­vey ques­tion about whether the re­spon­dent’s par­ents went to univer­sity).

One-year pro­grammes also out­per­form two-year pro­grammes on in­ter­na­tion­al­i­sa­tion and rep­re­sen­ta­tion of women at staff and stu­dent lev­els. How­ever, two-year pro­grammes record higher scores on most other met­rics, in­clud­ing the strength of their alumni net­works and propen­sity for their grad­u­ates to do vol­un­tary work.

That lat­ter met­ric is in­cluded as a way to probe the ex­tent to which busi­ness schools are ad­dress­ing the claims of crit­ics that they pro­mote an ir­re­spon­si­ble, self­ish form of cap­i­tal­ism. It is strik­ing that alumni of top two-year pro­grammes are more likely to vol­un­teer than alumni of two-year pro­grammes over­all: the re­verse of the sit­u­a­tion with the alumni of oneyear pro­grammes. How­ever, the fact that the two-year list is dom­i­nated by US in­sti­tu­tions means that some of the dif­fer­ences be­tween one- and two-year pro­grammes could be at­trib­ut­able to na­tional dif­fer­ences, rather than fac­tors in­her­ent to the pro­grammes them­selves. In the case of vol­un­tary work, for in­stance, this is highly val­ued in the US, and there is ar­guably more onus placed on suc­cess­ful peo­ple – likely to be alumni of the top busi­ness schools – to “give some­thing back”. For all the fame and pres­tige of MBAs, many busi­ness school lead­ers sug­gest that a big­ger growth area in re­cent years has been the more re­cently de­vel­oped mas­ter’s in man­age­ment (MIM) and mas­ter’s in fi­nance (MIF). These typ­i­cally one-year full-time cour­ses are aimed not at es­tab­lished pro­fes­sion­als but at re­cent grad­u­ates who have not yet be­gun their ca­reers. Ac­cord­ing to the 2018 GMAC re­port, there has been re­cent growth in ap­pli­ca­tions to most MIM and MIF pro­grammes in Europe. And it is on that con­ti­nent that most such pro­grammes are

We’ve seen a dou­ble-digit in­crease in the num­ber of ap­pli­ca­tions [for the 16-month cour­ses], which has al­lowed us to grow the pro­gramme

based – al­though, ac­cord­ing to THE’s anal­y­sis, the US pro­grammes tend, again, to be among the most pres­ti­gious.

The scores re­turned by MIM and MIF pro­grammes are broadly sim­i­lar to those for MBAs. One no­table area of dis­crep­ancy, again, is vol­un­teer­ing: MIMs and MIFs are much less likely to pro­mote it. How­ever, that could well be be­cause their grad­u­ates are at ear­lier life and ca­reer stages than MBA grad­u­ates. MIMs and MIFs also have a much higher fe­male rep­re­sen­ta­tion at staff and stu­dent lev­els, per­haps re­flect­ing the fact that male dom­i­nance is less pro­nounced at more ju­nior cor­po­rate lev­els.

Leila Guerra, as­so­ciate dean of pro­grammes at Im­pe­rial Col­lege Busi­ness School, which ap­pears in the top five for both MIMs and MIFs, says that al­though the univer­sity has been run­ning these pro­grammes for decades, she has seen an in­crease in ap­pli­ca­tions in re­cent years.

“The busi­ness school mar­ket was once dom­i­nated by the MBA, but MIFs and MIMs are now here to stay. Schools that were tra­di­tion­ally MBA-fo­cused are now mov­ing into spe­cialised mas­ter’s,” she says.

De­spite the re­sult­ing in­crease in com­pe­ti­tion, Guerra says ap­pli­ca­tions to Im­pe­rial’s cour­ses are on the up. “It shows that [MIFs and MIMs] are global brands, and it means the qual­i­fi­ca­tions will be more widely recog­nised, which is good for us,” she adds. “MIMs and MIFs pro­vide you with a ca­reer boost at 22, but if you need to re­fresh your skills [when you are older] you can come back for an MBA.”

Lynette Ryals, di­rec­tor of Cran­field School of Man­age­ment, whose MIF ranks sixth,

The busi­ness school mar­ket was once dom­i­nated by the MBA, but MIFs and MIMs are now here to stay. Schools that were tra­di­tion­ally MBA-fo­cused are now mov­ing into spe­cialised mas­ter’s

points out that more and more stu­dents across the world are pur­su­ing mas­ter’s-level study after their un­der­grad­u­ate de­grees. And, like Guerra, she em­pha­sises that her busi­ness school’s close links to its host in­sti­tu­tion ex­poses its stu­dents to the most up-to-date re­search in tech­nol­ogy and en­gi­neer­ing, which makes them highly em­ploy­able in those sec­tors and ful­fils the in­creas­ing de­sire of peo­ple in their twen­ties to “build a spe­cial­ism” early in their ca­reers.

One un­cer­tainty for UK busi­ness schools is the im­pact of Brexit, and the gov­ern­ment’s gen­eral de­ter­mi­na­tion to drive down im­mi­gra­tion. HEC Paris’ Masini says that the “Trump and Brexit ef­fect” has al­ready man­i­fested it­self in an in­crease in ap­pli­ca­tions to his school, while the China Europe In­ter­na­tional Busi­ness School’s Ding says that “more and more” tal­ented In­di­ans, Ja­panese and South Kore­ans have been ap­ply­ing to his in­sti­tu­tion.

“Tra­di­tion­ally they go to the US and UK, but now, along­side the grow­ing in­ter­est in the Chi­nese mar­ket, there is the per­ceived risk to ca­reer devel­op­ment in these coun­tries, so they

come to our school,” he says. “This is a very new trend.”

Guerra says Im­pe­rial has yet to feel this ef­fect, but the lat­est sur­vey from the UK’s Char­tered As­so­ci­a­tion of Busi­ness Schools found that the ma­jor­ity of UK busi­ness schools are ex­tremely wor­ried about Brexit’s ef­fect on their abil­ity to re­cruit in­ter­na­tional stu­dents (as well as their abil­ity to ac­cess Euro­pean fund­ing for re­search). And Van­der­bilt’s Wilk­er­son pre­dicts that US schools that have his­tor­i­cally re­lied on in­ter­na­tional re­cruit­ment will find them­selves un­der in­creas­ing fi­nan­cial pres­sure in the com­ing years.

Bill Bould­ing, dean and J. B. Fuqua pro­fes­sor of busi­ness ad­min­is­tra­tion at Duke Univer­sity’s Fuqua School of Busi­ness, cites fur­ther threats to US in­sti­tu­tions, in the form of in­creased in­ter­na­tional com­pe­ti­tion, a strong US labour mar­ket that de­creases work­ers’ mo­ti­va­tion to seek higher qual­i­fi­ca­tions, and ques­tions about value for money as tu­ition fees for MBAs in par­tic­u­lar grow ever higher. De­spite this, he “would also con­sider this to be the golden age of in­no­va­tion for busi­ness ed­u­ca­tion”, as they “adapt to re­main rel­e­vant for the world we live in to­day and they meet the chal­lenges that busi­ness lead­ers are fac­ing now – which are very dif­fer­ent than in the past”.

“I ex­pect in com­ing years we’ll con­tinue to see a flight to qual­ity,” he adds. “The schools that are most pop­u­lar will con­tinue to be the schools that are tak­ing in­no­va­tion se­ri­ously and adapt­ing to the chal­lenges of busi­ness to­day.”

For his part, Stan­ford’s Fein­berg blames the de­cline in ap­pli­ca­tions to US schools on the global geopo­lit­i­cal forces that shape the busi­ness school mar­ket, and that have seen some over­seas coun­tries – es­pe­cially China – rise to promi­nence. “We will con­tinue to see a rise in the qual­ity of man­age­ment ed­u­ca­tion in de­vel­op­ing economies,” he pre­dicts – and, there­fore, in­creased com­pe­ti­tion for US in­sti­tu­tions.

“How­ever, the world of busi­ness is be­com­ing more com­plex, volatile and dy­namic and re­quires more in­no­va­tive, re­silient and com­pas­sion­ate lead­ers,” he adds. “As long as eco­nomic and so­ci­etal prob­lems per­sist, busi­ness schools that gen­er­ate such fu­ture lead­ers will not only sur­vive but thrive.”

I ex­pect in com­ing years we’ll con­tinue to see a flight to qual­ity. The schools that are most pop­u­lar will con­tinue to be the schools that are tak­ing in­no­va­tion se­ri­ously

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.