The MBA is changing

Since its introduction by Harvard in 1908 the MBA’s rise seemed unstoppable, marvels the British Economist: “Today, it is the second most popular postgraduate degree in America”. But students expectations, schools and programmes are changing fast.

The programmes become more focussed. Most business schools now encourage students to concentrate on one area, such as finance or marketing. An increasing number of MBA programmes are tailored to deliver to particular sectors, such as healthcare, real estate, business analytics or fashion. Business schools are expanding into areas other than business. Schools have been hiring teachers from university's economics departments. Now they are also on the lookout for psychologists and sociologists to lecture on subjects such as ethics, leadership and organisational behaviour. York University in Canada, for example, recently launched a Master’s in Business Analytics. It recruits students with solid quantitative backgrounds, such as mathematicians and engineers. “Firms want people who can also understand the business implications of their analysis”, concludes the Economist.

Changing technology has an impact. Many courses are now available free of charge as “massive online open courses”, or MOOCs. Better distance-learning technology caters to the demand of a mass-market. So far, prestigious, traditional universities hesitated to offer distance-learning MBAs. Now, even top-ranked schools are investing to equip themselves for online classes. And students are signing up because they prefer not to give up their job. Programme directors say that some online classrooms are now least as good as a real classroom, if classes are limited to 15 students who can interact and are spread across the globe.

There is new pressure on the fees.  As students get more choice, business schools will be forced to compete on price, says Clayton Christensen, the Harvard professor who coined the idea of disruptive innovation. “Students might celebrate; business schools may prefer to keep the champagne on ice,” comments the Economist.

Students have different expectations. The underlying reasons for these changes are not only technical, though. MBA candidates today are questioning the return on investment of expensive programmes. Data shows that the average basic salary of graduating students is now 94,000 dollars, about 1,500 dollars less than five years ago. At the same time, fees have risen. Harvard’s prices have risen by nearly $25,000 since 2008. Also, schools report that students are less keen than in the past about earning huge salaries. “Instead of trumpeting the number of students who get high-paying jobs in finance, they now reel off examples of those who join non-profits or launch social enterprises”, writes the Economist. “This fits the socially-aware image they wish to portray after the financial crisis.”

http://www.economist.com/news/briefing/21587780-mba-being-transformed-better-and-worse-change-management