The Chart That Is Scaring B-School Deans
As thousands of business school deans gather in Baltimore for the annual conference of the Graduate Management Admission Council, the big topic of conversation has everyone a bit worried and concerned: It's the declining interest among GMAT test takers in full-time, two-year MBA programs.
The chart above is setting off alarm bells among admission officers all over the world, but especially in the U.S. where the two-year, on-campus, full-time MBA program reigns supreme. Last year, only 69,465 people who took the GMAT said they intend to send their scores to two-year programs. That's down from 88,700 in 2012 and 97,674 in 2009.
In other words, it's the kind of big and scary drop that makes people deeply anxious--and for good reason. It's occurring at a time when the value of the MBA degree is indisputable. Job offers to this year's crop of MBAs is at near record highs. Surveys of graduates show them extremely satisfied with their investment. The versatility of the degree--as a valuable tool for social enterprise managers, startup entrepreneurs, public sector executives--has never been greater. For the past two years, the MBA has become the most popular masters degree in the U.S., surpassing even the master's in education.
If anything, you would think that the turmoil in the law school market--which has seen an even greater fall in interest due to all the horror stories of unemployed attorneys--would have thousands of people switching to business from law. But there's no evidence of that yet happening.
The fallout is not affecting the top-tier brands in graduate education. For many of them, full-time applications are up and the quality of their applicant pools is among the best they have ever seen. It's the second- and third-tier schools that face the hardest struggle.
So why the dramatic plunge in interest in two-year MBA degrees? For many, it comes down to the cost of education and the concern over ever rising debt burdens. For others, a range of alternatives are now available to those who would otherwise be in this applicant pool: online MBA degrees, one-year specialized master's, even free MOOCs that could be cobbled together on a resume to impress a would-be employer.
And here's where GMAC comes in. We're reached the point where it is necessary for GMAC to help orchestrate a major initiative to promote the value of the degree. GMAC definitely has the research to make the case for the MBA--and it also has the money. What the organization must now do on behalf of business schools is to launch a smart marketing campaign to let more people know why the degree that has been the bread-and-butter of graduate business education is a worthwhile investment.
For more insights and news on MBAs and business schools, check out , including:
The Furor Over BusinessWeek's New MBA Ranking
Photo: alphaspirit / shutterstock
Product & Technology Leadership | Advisor | E-commerce [B2B & B2C] | Developer Productivity Apps
10ySchool is a playground which offers us an opportunity for life's experimentation without penalties of failure that may exist in real life. I had the good fortune to go to one of the finest and realized early that the key difference in many of the top tier schools is a) the quality of faculty who know how to tell a story, b) your peers who set the bar, c) your alumni and the school who help you to land job opportunities d) most importantly your own willingness to learn and try new things. Having said that many schools offering higher degrees are no different than mortgage companies offering a product to an unsuspecting customer that probably will never deliver only landing the them in debt for life. As they say buyer beware!
Interpreter/Translator/Post-editor/Reviewer
10yThe MBA Programs themselves are the most lucrative 'businesses' in academia. The student is stuck in deep debt and won't be able to raise enough capital to initiate what the business schools make them aspire to. Let me stop here...
EDITOR | PUBLISHER Inner Sanctum Vector N360™
10yThis has become a national crisis. Universities are not preparing students to join the workforce as productive members. It then becomes the responsibility of Corporations to train their employees which is a leadership function. Leaders are obligated to cultivate advancement of educational, personal and vocational skills required among different segments of the markets which they serve. The key leadership problem is weak academic achievement in which an entire generation of people are not learning enough or acquiring the right practical skills to find success in the global corporate environment.
Program Director: Computer Information Sciences at ECPI University
10yPurely from an academic perspective, the BS in Business has more courses and better depth than most MBAs. MBAs tend to focus on high level management and strategy but the market is too stratified for that to be of specific value. On the other hand, a Master's in Hospitality/Restaurant Managment, or Real Estate, or Pharmacy Management could have some bite.
Professional Do-gooder | Ex-BCG | Ex-McKinsey
10yThis doesn't take into account that around the time of the drop the GRE was revised and is now acceptable for MBA programs. It's just people getting a better bang for the buck. Sad for GMAC, not for B-school deans.