Where is the M.B.A. headed? And what should you consider as a potential M.B.A. program applicant? Editor for The Economist Bill Ridgers shares his insights and top 10 tips for finding the M.B.A. program that's right for you.
There is a touch of doom and gloom surrounding the M.B.A. at the moment. Last year just 116,000 Americans took the GMAT, the de facto entrance exam for business schools. Ten years ago 160,000 did. The days when an M.B.A. guaranteed a fast-track career with an eye-watering salary to match have faded. Even though fewer M.B.A.s are hitting the job market, a recent GMAC report suggested that M.B.A.s wages aren't keeping up with inflation.
I recently wrote a lengthy piece for The Economist suggesting that mid-tier American schools are in trouble: "In 2010 the average tuition fee charged by American institutions ranked within our top 100, but outside of the top 15, was $81,911 for the full two years. The average basic salary of those schools’ freshly minted M.B.A.s was $81,178 a year. Five years ago tuition at the same cohort of schools was nearly $22,000 cheaper—$60,247—while the average salary, $78,442, was barely less than today’s."
Clearly the value proposition has changed. So does this mean that prospective students should give up on the idea of a business education? I think not. The MBA has proved a resilient beast over the last hundred years. It is not the first time that it has faced a crisis of confidence. In the 1950s, business schools were sneered at by other university departments for being non-academic—mere vocational qualifications. Then, just a few decades later they were criticised for being too academic and lacking practical relevance for managers. After the Enron scandal in 2001, the corporate world was being derided as unethical and much of the blame was laid at business schools’ doors, as it was a decade later when the credit crunch hit. Yet, at each hint of trouble, the M.B.A. has reinvented itself.
It will have to do so again. The two-year full-time experienced, so cherished by U.S. universities, will come under pressure. Northwestern University’s Kellogg school has begun to rethink the model. Asian students, on whom the future growth of the M.B.A. depends, are less likely to give up two years out of the workplace, particularly when compared with the opportunity cost of heading to Europe, where programs can be half the length yet a fraction of the cost, and students often earn higher salaries once they graduate.
The one piece of advice I have always given prospective students is to aim as high as you dare when applying to business school. In a world in which an M.B.A. is seen by some as a commodity, the way to differentiate yourself from the market is by having the most prestigious degree possible. This doesn’t have to be from a full-time program. Part-time and distance learning M.B.A.s are no longer considered the poor relations. But for those considering applying to business school, there are some standard considerations. I can offer 10 areas in particular that will need careful evaluation.
- Program The core of an M.B.A. program is now considered by some a commodity. So what we are mainly talking about here is access to specializations and electives. In which areas does a school have a particular capability? Are electives often oversubscribed, meaning you may miss out? Do they change from year to year? The key is to be sure of what you want out of your M.B.A. and make sure the program will furnish you with the skills you need.
- Faculty It is easy to be seduced by the thought of star professors. But what schools often fail to mention is that with the book tours, consultancy projects, media engagements, and time spent on that Nobel-winning research project, you may never see them in the lecture theater. What is important is that faculty are not only well regarded but are also approachable and good teachers. As with much of the advice on this list, you only find this out by talking to students at the school.
- Culture The importance of culture is often overlooked. Some students like their studies to be cutthroat, finding that the thrill of competition inspires them to better grades. Others prefer a collegiate atmosphere, in which students work together. Some like a university where they can party. Some prefer a more a cloistered environment. Choose a school with the right culture for you--otherwise, achieving your M.B.A. can be a miserable experience
- Size Some schools are huge. INSEAD, for example, admits over a thousand people to its full-time M.B.A. program. Others are much smaller. Henley Business School at the University of Reading in the United Kingdom admits just 33. The pay off is often between the intimacy of small program can offer versus the greater resources of a large university.
- Facilities Business schools have spent millions on their facilities in recent years. It is rare to find a school that doesn’t come up to scratch. But remember that you are likely to be paying an awful lot of money for that M.B.A. So have high expectations about your physical surroundings.
- Careers services This is an area that has become more important as the job market has become tougher. If you are pursuing an M.B.A. because you want to switch jobs, you should expect a dedicated business school careers department (as opposed to a university-wide one) that will work tirelessly to bring in recruiters. You can also expect help with writing résumés and interview techniques.
- Internationalism This can cut two ways. It is clearly important in today’s world to have a global business perspective. This means having foreign students in the cohort, foreign professors in the faculty, and global content in the program. Ideally you should expect a study trip abroad. But, having a cohort that has trouble with the language or second-rate teachers is going to make earning your degree a frustrating experience.
- Location If you are taking a part-time program, it is likely that you will be restricted to choosing between schools in your area. For modular programs, you may be able to cast your net wider. A student who is expected on campus just one weekend a month may not find a two-hour plane journey impossible. Full-timers should think about location even more carefully. This means not just where you may wish to live and work after your degree, but also in terms of the industry you wish to go into. You may find it easier to access finance jobs in New York or tech jobs in California, for example.
- Cohort A simple rule is that, ideally, you want classmates who are just a little smarter than you are. You will be learning as much from them as from your professors, so they should also have decent and varied work experience.
- Accreditation and rankings. It is important that a school carries cache in the wider world. At the very least it should be accredited by one of the three main international bodies: AACSB, EQUIS, or AMBA. Although rankings should be handled with care, they are important to the perception of schools in the wider world. So you might also look at the more influential of these, such as Business Week, the Financial Times, or, my own publication, The Economist.
For more tips, application advice, and business school news, or to network with Economist editors and other current and prospective students from around the world, please visit www.economist.com/whichmba.