Is an MBA Degree Losing Some of Its Appeal?

You might be tempted to think so given the rash of stories in the WSJ and higher education publications describing dwindling applications and the closing of full-time MBA programs. What gives?

To be sure, higher education institutions are wrestling with competitive, cyclical and secular issues that are coalescing to form the perfect storm. HBS Professor and best-selling author Clay Christensen predicts that 50 percent of colleges and universities will close or merge within the next decade. A quick Google search yields a parade of private and public closure and merger announcements over the last three years. In December, Albright College, Reading, Pa., announced a 45 percent tuition cut, ending a decade of 4 percent annual tuition hikes. In February, Concordia University, a small historically black private college in Selma, Ala., announced its closing two years shy of its centennial celebration. You don’t need a business degree to see that declining demographics, excess capacity and rising prices spell trouble for higher ed.

Full-time MBA programs are not immune to the changing landscape. While applications to MBA programs have always been countercyclical, about a dozen full-time programs have announced closures in the last three years, and more are likely to follow. All but the elite full-time programs are feeling the sting of too much student debt, rising demand for cheaper online programs and the unwillingness of workers to commit to a two-year absence from a rapidly changing marketplace. International applicants, once a stable source of demand, no longer flood admissions offices as they once did, due in large part to the uncertainty over the Trump Administration’s immigration policy. Many experts believe that it may be some time before these full-tuition-paying students return to the U.S. in large numbers.

Today’s MBA is not your mother or father’s degree. Businesses are increasingly being challenged by marketplace disruption and innovation, global competition and artificial intelligence’s potential to displace millions of jobs. To manage these challenges, employers are looking for individuals with creativity, empathy, agility and soft skills that were until very recently, not part of an MBA curriculum. Corporate social and environmental responsibility is no longer an aspirational goal and is instead driving everyday decisions.

New delivery platforms have emerged to offer business professionals greater flexibility and better work-life balance.  Stackable micro credentialing and online programs provide applicants with a cheaper and faster alternative to acquiring needed skills. Business schools are redesigning their programs to align with a world of big data, block-chain technology, real-time analysis and matrix organizational structures. MBA curricula are embracing these marketplace advances, just like any business must do to remain competitive.

While all of this makes for dramatic headlines, the value of an MBA remains the gold standard for business professionals; its standing as the quintessential continuous learning degree for business professionals is unbowed. MBA graduates are thought to be more resilient and self-motivated, and they possess what all companies desire in their employees – critical thinking skills and a growth mindset. So important are these markers for success that they often trump prior experience when it comes to the hiring process. Moreover, in a world where nonlinear career paths are the new norm, an MBA degree is the gateway to opportunity and advancement. That aspect of an MBA remains the same, no matter what the future holds.

Categories: MBA