Enrolment for MBA could never have been easier. With dropping admission numbers, institutions are counting their applicant numbers and there seem seats for everyone.
According to new data from the Graduate Management Admission Council, which administers the Graduate Management Admission Test, applications for two-year, full-time MBA programs that start this fall dropped on an average 9.9% compared to last year. This is the third year in a row that applications have fallen.
One-third of full-time MBA programs reported drops of more than 10%, according to the survey, which included 649 MBA and other business programs at 331 schools worldwide.
Historically, interest in graduate school has increased when the job market soured, but the prolonged uncertainty about future growth has discouraged some prospective MBA applicants. The fact that some companies that have traditionally helped students pay their way through business school haven't altered their policies. Spokespersons at Goldman Sachs Group Inc., Credit Suisse Group AG and Morgan Stanley said they are not changing the amount they contribute to business-school tuition.
"They'll stay in their jobs until they see that there'll be a return on this investment," said Wendy Huber, associate director of admissions at the University of Virginia's Darden School of Business. "They want to know that recruiters will be waiting in line." Part-time programs are struggling to attract students, too, with 46% reporting declines in application volume this year.
One bright spot for business education is specialized master's programs. Courses for management, accounting and finance all reported increased volume. Applications for these programs have risen in recent years as undergraduates have sought to beef up their credentials before hitting the job market.
Additional interest in the short, specialized programs comes as professional certification boards toughen entry requirements. For example, students wishing to become certified public accountants in certain states must now have 150 hours of college credit to qualify for the CPA exam, more than most get in an undergraduate program.
But even though MBA application volume has slumped, most schools report the quality of candidates, based on their GMAT scores, undergraduate transcripts and work experience, is getting stronger. The number of people taking the GMAT this year increased through the end of July, and historically test taking has been a leading indicator of higher application volume soon after.
Applicants from the Asia-Pacific region constituted 57% of international volumes at two-year full-time MBA programs in the USA. GMAC attributes this to the fact that b-schools conduct the maximum international marketing and outreach activities in the Asia-Pacific region. Although the allure of full-time MBA is decreasing, applications to specialized management programs such as Master in Management, Master of Accounting and Master of Finance have been on the rise. Internationally, Master of Finance programs led the trend with 83% programs reporting an increase in applications, followed by Master in Management programs at 69% and Master of Accounting programs at 51%.
MIDDLE EAST FACTOR
Over the last five years, several European and US schools have opened campuses in the Middle East including London Business School, Edinburgh Business School, Hult International Business School, and University of Strathclyde Business School. Cass Business School in London launched its Executive MBA program in a modular format in partnership with the Dubai International Financial Centre (DIFC) in 2007.
Until recently, an MBA gained in the Middle East was barely worth the paper it was written on. However, a proliferation of courses taught on-the-ground by top business schools over the last five years has helped salvage the qualification's reputation in the region.
Recent research suggests that generally local companies are still relatively underwhelmed by executive education. Manchester Business School and the Dubai International Academic City tried to assess the quality of these training courses this year (the first research of this kind) but out of a possible 26,000 respondents, only 537 training managers replied. Of those, 33.9% said the standard of executive education was good or very good and 21.8% still described it as poor or very poor.
When it comes to qualifications favoured by financial services employers in the Middle East, the CFA has long been top of the list. The executive MBA still has some catching up to do, but more companies in the region are slowly waking up to its value, argues Ehsan Razavizadeh, regional director MENA at Cass Business School.
"We're tailoring the course to cover subjects that local financial services organisations want to see, such as Islamic finance and private equity," he says. "For more senior roles local employers don't just want to see technical capabilities, they want softer skills like negotiation, leadership and an understanding of how business is done in the region. You get this with an MBA, whereas the CFA is purely technical."
Nonetheless, executive search firms in Dubai remain slightly sceptical about the benefits of an MBA to your career prospects. Peter Greaves, director, head of financial markets at McArthur Murray in Dubai, says it's still very much a "luxury, rather than a requirement".
"For senior banking roles it's usually on the wish list, but seldom a requirement," he says. "In some cases, it can be a disadvantage as employers assume an MBA means they'll have to pay a candidate more."
MBA ISLAMIC BANKING
Islamic banking is one of the world's fastest-growing financial sectors. A report released by the IMF last year found that Islamic banks tended to be more versatile during the crisis because Sharia principles precluded them from financing or investing in the kind of instruments that affected conventional banks. Islamic banks also have smaller portfolios and lower leverage.
"In the post-financial crisis world, people are looking for more resilient and ethical alternatives to conventional interest-based financing," said Atif Khan, the managing director of the Ethica Institute in Dubai, which offers an online Islamic finance training certificate.
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