The FT has written an editorial painting a pessimistic picture of MBA institutions and the value of the degree. They claim that the modern workforce prefers a high caliber master’s, (such as: MiM, MSc. in Finance, or CEMS participation.) The FT also advises students that they are better off “going early, paying less, and being specialised.” They go on to state that this “is simply a better economic proposition.”
This trend is nothing new to us. About half of our GMAT classes are Master’s candidates, and that has been stable over the last 3-4 years. The real reason behind this is that interesting corporate positions now tend to recruit directly from the master’s. Job applicants are told to come back with a higher degree.
The next point the FT makes is on the inflation of tuition versus job salary.
“Over the past 10 years, tuition fees for two-year MBA programmes have risen by an average of over 5 per cent a year, more than twice the rate of US inflation. The bill including neither room and board nor the opportunity costs of giving up work is now $112,000 (…) Meanwhile, the salaries of MBA degree holders, three years after graduation, have grown at less than 2 per cent a year.”
This points to the next huge trend of MBAs- the shorter program. The one-year program has been by far the most in-demand course. INSEAD- a 12 month course- has risen to the top of the FT rankings, and ever since the financial crisis students are much more reluctant to go into debt.
What the FT does not say explicitly is that the MBA landscape is a winner-takes-all market. The top programs attract the top talent– students, companies, faculty, ect. These top programs are not “luxury goods” as the FT describes them- they are simply the gateways to grand opportunities. And for this exact reason, getting admitted to a top school is more competitive than ever. It is also more rewarding than ever, especially considering the massive disruption occurring in most industries.
Here is a link to the entire article: