The market speaks
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There has been one bright spot in the MBA job market over the past year and that was the number of graduates snapped up by the management consultancies. Top of the pile is McKinsey, which was the largest recruiter at several schools in 2012, including Kellogg School of Management and neighbour the University of Chicago Booth School of Business in the US, and London Business School in the UK. The consulting firm recruited 55, 28 and 36 students respectively at the three schools.
McKinsey is also traditionally the biggest recruiter at Insead. Between the two graduating classes of June and December 2011, for example – the latest available figures – McKinsey recruited 107 graduates there, probably the biggest haul at any single business school.
Why is this significant? While students can get an MBA in under a year at Insead, the school can still place large numbers of graduates in coveted jobs. Which begs this question: who decides how long an MBA should take – the schools or the market?
The reason I ask this is that when you talk to professors at the top US programmes they say you cannot teach an MBA student what he or she needs to know in 12 months. McKinsey, it seems, disagrees.
Of course, Insead is the first to point out that nearly half (50) of the McKinsey recruits from Insead in 2011 had worked with the consultancy before going to business school. But somehow that strengthens the argument: McKinsey consultants know their quickest (and cheapest) way to the top is with an Insead MBA.
The debate about the one-year versus two-year model came to a head last year when the Association to Advance Collegiate Schools of Business was lobbied by top US schools, most notably Stanford, to try and protect the two-year MBA model in the ongoing review of the AACSB accreditation standards.
Some see this as a concern on behalf of the top schools that the term MBA is being used to describe inadequate programmes. Other deans describe it as protectionism.
Of course, many US deans are already converts to the one-year format, which has been commonplace in Europe for more than 50 years. In the UK, Peter Tufano, dean of Saïd Business School at Oxford, for example, told me recently that when he was at Harvard he could not countenance the idea of a one-year programme, but now in the UK he is convinced students get the same content.
The one-year degree is arguably the least of the problems. Part-time and online degrees are competing with traditional campus programmes, and increasingly come from well-respected schools, often working together.
One of the most exciting developments last year was when a host of US universities decided to develop online undergraduate courses across a range of disciplines that could be taken for credit at any of the partner schools.
I like to think of it as a bit like cloud computing – cloud education – in which participants can select the best courses from each institution. How long will it be before a group of postgraduate business schools do the same?
Then there are the Moocs – the massive open online courses – in which, ironically, top universities such as Stanford and MIT are leading the way. If you are interested in learning rather than qualifications, why pay for campus study at all? Given the cost of MBA education in the US – Stanford calculates the total cost of an MBA to be more than $180,000 even before the opportunity cost is taken into account – there are clearly some prospective students who will opt out of paid-for education altogether.
Even the top schools acknowledge that much of the more formulaic learning can be done online, often before the campus programme begins. But surely this is an argument for cutting the length of the on-campus programme? Even if universities still have their heads in the sand, prospective students do not. According to a national opinion poll conducted in 2012 for Northeastern University by FTI Consulting, nine out of 10 respondents aged between 18 and 30 said the US education system had to innovate to be internationally competitive.
Of course, schools offering two-year degrees say there are advantages in longer programmes, notably that students can try out a new profession during the summer internship and that this is the best way of securing a full-time job on graduation.
If you are one of the top US schools, it is easy to understand why there is little appetite for change. Stanford gets 17 applicants for every place on its MBA and Harvard gets 10. Then there are the rankings. A quick glance at the FT’s MBA ranking this year reveals all five of the top schools teach a two-year programme. Indeed, there is only one school in the top 10 – Insead – where all the MBA students graduate within a year.