Most companies would feel threatened when their rivals launched a product in competition with their own. But business schools have never really behaved like any other business.
Recent years have seen a proliferation of Executive MBA degrees – MBA degrees for working managers. Rather than decrying the fact, many business schools think it is something to be welcomed.
Lyn Hoffman, associate dean for EMBA programmes at London Business School, thinks the moves are positive. “In a sense the proliferation is very good news. We need to educate the market on the values of an EMBA and the more leading business schools that are offering an EMBA the better.”
She cites the examples of Insead in France and Singapore, and the Said school at Oxford University, which have both launched EMBA programmes in recent years.
But the proliferation is not just in Europe. Seven new schools have entered the Financial Times ranking of the top global EMBA programmes this year, four from Europe, two from the US and one from Asia. Most notable are the National University of Singapore and Cornell University, in Ithaca, New York.
Executive MBAs have traditionally been viewed as the Cinderella of the MBA world, a second-rate alternative to the gold standard full-time programme. Schools such as Harvard, Stanford and MIT in the US remain aloof from these part-time offerings. However, EMBAs are proving increasingly popular with both students and employers and increasingly lucrative for business schools.
As the market for the full-time MBA drops across the world – most estimates put the decline at 30 per cent – EMBA programmes are experiencing a marked increase in applications. At the University of Chicago, for example, dean Ted Snyder says the number of inquiries the school received this year was 50 per cent higher than last year and there was an increase in both applications and enrolments as well.
This year the school has enrolled 267 EMBA students on its three campuses, in Chicago, Singapore and London. Last year the figure was 244. At Columbia Business School in New York it is a similar story, says Ethan Hanabury, recently appointed director of Columbia’s three EMBA programmes. Applications have risen 7 per cent this year he says. In particular Columbia has seen a rise in the number of women that have applied to the New York-based programme – up to 34 per cent from 25 per cent last year. Columbia is not alone in offering more than one EMBA programme. One of the biggest issues for managers or companies selecting an EMBA programme is not only which business school to choose, but which of their programmes to study on, and, as a result, how much to pay. The challenge for business schools is to differentiate clearly their products. Schools that have been in the market for a decade or more such as the Fuqua school at Duke University – it launched its weekend EMBA in Durham, North Carolina, 20 years ago and its Global Executive MBA 10 years ago – have clearly defined marketing strategies. Its Gemba is for senior managers with 15 or more years of work experience and international responsibilities. Its Cross Continent MBA is for those in their late 20s, the traditional market for the full-time programme. At LBS the entry requirements for its local weekend EMBA and the EMBA Global, which it runs with Columbia, are less clearly defined, with participants on both programmes being in their early 30s. “When we speak to people we spot the Globals and the EMBAs,” says Ms Hoffman. The EMBA Global, she says, is for those who already have global responsibilities; the EMBA for those who “want to get into the global mindset”.
As a general rule of thumb, the more travel involved in the programme,the more it will cost. And those studying in the US face higher fees.
Students who enrol on the Chicago programme in the windy city, for example, pay $107,000, those who enrol in London pay $103,000 or £53,800 and those in Singapore pay $94,000, including local taxes.
European students in particular have proved resistant to high course fees, says Ms Hoffman. As a result the EMBA Global, at $115,000, has a majority of participants enrolling in New York, not London.
At Duke the resistance of European students to pay high fees resulted in the school closing down its German campus in Frankfurt. Now it offers a joint degree there with a local university, a model that the school is hoping to follow when it moves into Asia, says Dan Nagy, associate dean for the EMBA.
“The joint degree programme is a lower cost model.”
It is a model which has paid off handsomely at the Kellogg school at Northwestern University, which runs joint degree programmes with Hong Kong University of Science and Technology, Tel Aviv University, WHU in Germany and the Schulich school at York University in Canada.
Kellogg also runs two programmes in the US, on its home campus and in Miami.
In spite of the obvious diversity in the student body, the profile of the students is much the same, says Julie Cisek Jones, assistant dean and director of Kellogg’s programmes.
“The needs and wants of the students we attract are remarkably similar,” she says. “Those from Hong Kong are the highest motivated students in the programme.”
While Kellogg and Duke opt for the partnership route, Prof Snyder believes in what he calls “pure Chicago”.
All the Chicago EMBA classes, on all three campuses, are taught by Chicago faculty. “I feel very good that we’re on our own,” he says. “We’re very comfortable with what we’re doing.”
The Wharton school at the University of Pennsylvania, ranked number one in the Financial Times ranking again this year, also takes the purist route, with all its courses in Philadelphia and San Francisco taught by Wharton folk. Like Prof Snyder, Howard Kaufold, director of Wharton’s MBA for Executives, believes it is a question of quality, and believes there is confusion in the marketplace about the content on many EMBA programmes. “There’s a general relaxation of standards. It’s a battle we are constantly fighting.”
Chicago and Kellogg believe part of the value of running programmes on several campuses is that the students can all study together for part of the year, exploiting the international experience of the students. The 267 students who enrolled on the Chicago EMBA this year, for example, came from 38 different countries.
A school such as Duke, on the other hand, believes the value is in taking its students around the globe, visiting international companies and gaining first hand experience of the international environment.
Mr Kaufold disagrees. He argues that intensity of the EMBA programme combined with a full time job leaves little room for other activities.
“We have not bought into this idea of international travel,” he says. Even the meetings between students from the two campuses – there are 400 on the programme these days – are strictly limited.
What is clear, is that these philosophical differences will ensure a highly competitive market for years to come.