Business schools are bracing for another bruising year. An applications crisis shows no sign of abating, and it poses a risk to the longevity of the flagship management degree, the MBA.
Worldwide, applications fell by 6.9 percent last year, according to MBA entrance test administrator, the Graduate Management Admission Council. The US is facing its sixth successive year of declining demand in 2020.
But those leading the world’s best business schools are optimistic on their institutions’ prospects. Amid turbulent times, they see the MBA market as being ripe for innovation, which may make business schools more relevant to students, business and society.
Deans are forecasting big changes in how and what they teach future leaders in 2020 and beyond, ranging from shareholder capitalism to technology and its ethical implications.
They also foresee more partnerships with other disciplines, from medicine to art, and greater use of technology to deliver education.
“The business of business education is rapidly changing, mostly in response to the fast pace of change in the world,” says Paul Almeida, dean at Georgetown University’s McDonough School of Business in Washington, DC.
A pressing need to revamp the MBA
In some ways, an MBA looks more relevant than ever before. It prepares people for career switches and leadership in an age of upheaval, when technology is rapidly reshaping the way we work and potentially the workforce; displacement is a concern.
But deans are under no illusions about the need to revamp the MBA. Perhaps the biggest threat to the degree’s future is the backlash against capitalism and globalization amid the resurgence of nationalism and a global climate emergency.
Ilian Mihov, dean of Insead Business School, was at the World Economic Forum in Davos recently, where world leaders, corporate titans and academics discussed the issues defining our time. Chief among them was climate change and questions over the future of capitalism.
Like other deans, Mihov says business education will shift towards creating leaders with a strong sense of social purpose, reflecting demand from employers. “There’s no doubt that more companies in the future are going to take into account the impact they have on society and the environment, in addition to the impact on the bottom line,” he says.
For many schools, this premonition is already a reality, with the teaching of responsible business alongside more traditional skills and profit maximization now widespread.
Mihov notes Insead revitalized its MBA, introducing courses on business and society, ethics, political analysis and public policy, focused on inequality, environmental sustainability, regulation and tax avoidance.
“We have the opportunity to have this discussion and debate, and to change students’ perspectives,” he says.
A cross-disciplinary approach
Business schools will need to take a cross-disciplinary approach, if they are to help solve big-ticket world challenges. Accordingly, Vincenzo Esposito Vinzi, dean of Essec Business School in France, expects programs that combine multiple academic disciplines to proliferate.
“As companies are looking to recruit professionals possessing both sector-specific experience and business knowledge, 2020 could be the year we see an increase in the number of partnerships developed between business schools and schools of other disciplines — law, medicine, art,” he says.
With LinkedIn claiming more than 151,000 data science jobs are vacant in the US, a surge in the number of specialist programs in data analytics could be on the horizon, according to Bill Boulding, dean of Duke University’s Fuqua School of Business in the US.
“When I visit places like Silicon Valley, I’m often told that the limiting factor on innovation is leadership, not technology,” he says.
“The role of human judgment is essential to the good of society,” he adds. “We need people who can not only innovate, but who also care about the human implications and possible unintended consequences.”
The rise of the Online MBA
Business schools themselves face a digital revolution: they are launching Online MBAs as students working salaried jobs demand greater flexibility in when, where and how they learn.
“As technology continues to reshape the way we work, it will do the same for business education,” says Scott DeRue, dean of the Ross School of Business at the University of Michigan.
“More business schools will embrace the possibilities enabled by advances in technology, including enhancing existing courses and creating entirely new programs.”
Several schools have shut their campus MBAs and have shifted resources into online programs, such as the University of Illinois at Urbana-Champaign’s Gies College of Business. It plans to phase out its campus MBAs and launched an iMBA course to much fanfare.
And yet, Conrad Chua, executive director of the MBA at the UK’s Cambridge Judge Business School, says concerns over the demise of the degree are overblown: “There will still be a lot of students wanting a full-time education in a top business school, because they realize the benefits to their career and the value of the lifelong networks they gain.”
Chua adds: “Although there is no shortage of businesses with technology solutions to help people learn remotely, it is difficult in 2020 to see a breakthrough business model that sees remote learning displace face-to-face.”
But for business schools, success moving forward does not mean repeating the same old formula. Georgetown’s Almeida expects to see more attempts at differentiation, as schools compete to attract students in a declining market.
Citing examples at his own institution, he says: “We recently launched a STEM-certified Master’s in Management degree, with plans for other specialized degrees in the future.”
He says the business school will seek to leverage its strengths, such as its connection to a university with other renowned schools for interdisciplinary study and research, and its Jesuit tradition that teaches students to consider their wider impact in the world.
Amid fast and frequent changes, it may be a good opportunity for business schools to reflect on their offering. Forward-thinking institutions are revamping their courses and pedagogy – and this will probably be a good thing for the sector and students.
“Our industry is changing for the better,” argues Almeida. “Business schools are on a continuous journey, where we follow the path that best prepares our graduates to excel in the world we see evolving around us.”
The question is whether these reforms have arrived quickly enough for the traditional MBA degree. Whether they can staunch the application decline remains to be seen.