Short on time? Here are the highlights:
- Two-thirds of the respondents to an international survey of prospective graduate students said that they would consider a business master’s degree as an alternative to an MBA
- This marks the first year, since its inception in 2010, that the survey found more students to be interested in one-year business master’s as opposed to the traditional two-year, full-time MBA
For several years, there have been signs that the traditional MBA model is under pressure, with many schools reporting declining application volumes and with students and employers signalling a demand for shorter, more targeted programmes. Some universities have gone so far as to consider eliminating their MBA programmes altogether in favour of more accessible, affordable, and specialised degrees.
A new survey offers more evidence that the MBA – which often takes two years to complete – is increasingly competing with business programmes that take less time and cost less money. The survey, entitled the Tomorrow’s Masters Study, was conducted by the consulting group CarringtonCrisp in partnership with EFMD and it canvassed 1,000 people from more than 100 countries who were deemed likely to pursue graduate-level business programmes in the next few years.
Among the top takeaways is that 67% of respondents were looking at a business master’s programme as an alternative to an MBA – at least as a first step in their business education. The CarringtonCrisp report notes that, “Many [respondents] did say that they saw themselves pursuing an MBA after a master’s programme. But the figure saying they were considering starting with a master’s degree was up significantly from the last time the survey was done, when only 48% had that view.”
Chinese respondents were particularly open to the idea of an alternate master’s in business, with 77% indicating that they would explore the option, versus 66% of Americans, 64% of Britons, and 57% of Canadians.
Among Americans, half said they thought that employers would value candidates with business-related master’s degrees as much as those with MBAs.
Growth slowing for two-year MBAs
According to The Graduate Management Admission Council, which runs the GMAT entrance exam for business schools, more than half (58%) of Master’s in Management programmes in Europe saw increases in the number of applications they received in 2016. Meanwhile, only 43% of full-time, two-year MBA programmes reported growth in application volumes in that same year (down from the 61% that did so in 2012).
Those MBA programmes that more reliably experience growth tend to be offered by top-ranked business schools, and/or are able to be completed on a compressed schedule. For instance, data from the 2018 installment of the CarringtonCrisp/EFMD survey reveals that for the first time in the survey’s eight-year history, “the one-year full-time MBA is more popular globally that the two-year full-time degree.”
Why students are exploring alternate master’s
Business-oriented master’s degrees such as the MiM (Master’s in Management) are competitive because they are less expensive, able to be completed in one year, and deliver expertise in a similar range of subjects as MBAs. Furthermore, such degrees increasingly carry the prestige students and employers are looking for. EFMD notes that “perceived recognition amongst employers” is one of the most compelling advantages of business-focused master’s degrees.
CarringtonCrisp co-founder Andrew Crisp offered a concrete example of why a student might explore an MiM degree, telling the Financial Times that,
“… an MiM degree at London Business School, with fees of £29,900, looks attractive compared with £75,100 for the MBA, which takes from 15 to 21 months. ‘Plus you get the London Business School brand on your CV at the start of your career.’”
Mr Crisp notes elsewhere that demand is growing directly from employers’ preferences: “Employers are seeking pre-experience master’s students, as they have additional learning compared to undergraduates and can be cheaper to recruit than MBAs.”
Popular master’s in business
The CarringtonCrisp/EFMD survey found that the most popular areas of specialty in master’s degrees are finance, management, marketing, accounting, international business, human resources, big data/ business analytics, and economics. Interest in big data/business analytics has grown the most. It was in 13th place in the previous instalment of the survey, and now is #1 in the US, #2 in India, and #4 in India.
More crossover with MBAs?
Master’s business degrees will not necessarily cannibalise the market for MBAs. For example, it does not necessarily follow that because a student chooses a master’s instead of an MBA they will never take an MBA in their lifetime. Instead, a model that could gain traction is master’s degrees such as MiMs feeding into MBAs and reducing the time required for the latter.
Prof Scott DeRue, who teaches at University of Michigan’s Ross School of Business, notes that,
“US schools that offer MiMs, such as Kellogg School of Management in Illinois and Mendoza at the University of Notre Dame, Indiana, are [reflecting] the content of an MBA in their MiM curriculum, so that those who want to go on and take an MBA can do so in one year rather than two.”
Prof DeRue told the Financial Times that, “a more fluid relationship” will develop between MiM and MBA degrees, with some students choosing to complete both at some point in their lives, according to their career trajectories. “I do not envision the Master’s in Management degree replacing the MBA,” he added.
For his part, Mr Crisp points to the changing marketplace as a key determinant of the future interplay of business master’s and MBAs, and of the way in which MBAs will have to evolve to remain relevant: “New ways of working and demand for new skills mean that anyone joining a business can expect to undertake further training and development throughout their career. Skills learnt in an MBA although not redundant will need updating sooner rather than later, raising doubts about the value of studying an MBA. Add in a growing number of MBAs choosing to start a business at the point of graduation or shortly afterwards, and there are growing reasons to think that the MBA needs to evolve.”
He adds that flexibility is crucial to the sustainability of MBAs going forward:
“An MBA that can deliver over an extended time period, allowing students to acquire skills as they need them, that offers options to personalise content, that delivers content beyond traditional business subjects and that meets the needs of changing lifestyles with options to study remotely or in other locations may be part of the future evolution of the MBA.”
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