Is MBA Degree Losing Its Value?

The experience gained by Mark Davis, a company director and MBA degree holder, shows that there are reasons to question the usefulness of this, once much sought-after, qualification.

When Mark worked for British Telecom, he was offered an opportunity to obtain this business degree at Manhattan.

Later, when Mark changed his job, he began wondering whether it was really necessary to sacrifice no less than two years of his time – during which he could be moving his career forward – for purely theoretical studies he did at the university.

According to him, the only useful skill he gained during his studies was reading balance sheets. Still, he could learn to do it on his own time without having to complete one more education.

Problems Faced by B-Schools

Anyway, business education is still one of the most popular, as there are more than 11 million candidates striving to enter a business school every year (according to an average calculated by GMAC). MBA programs are run at no less than 16,000 universities in the world.

However, as popular and prestigious as it is, MBA programs are threatened now by other, less time-consuming versions, such as online courses. Additionally, the tuition fees for business programs are growing, which makes it even easier to shift one’s preferences to another master’s degree or to online education. That is why many universities are worried for the future of their business education.

For a long time, MBA programs have been the cash cow of American universities. With the abovementioned problems, however, it is becoming hard to predict where the future entrepreneurs will enhance their knowledge and skills in management and leadership.

Decline in Popularity

This year, there was a significant decline in applicants for full-time MBAs in American business schools. The growth constituted no more than 40%. This steady downfall began as early as 2012, after an even more drastic drop after the 2008 crisis.

The only version of university full-time programs still experiencing a rise is in year-long courses, which are, coincidentally, much more popular in Europe. European business schools are now considering ‘quality over quantity’, as in ‘a 12-month course might be better than a 24-month one’.

Business schools not ready for change are constantly disappearing from the radar. There have been multiple mergers, with the ongoing budget cuts for university education in European countries. By some estimates, no less than half of all existing business schools might close down in the next decade. The most reliable way for universities to avoid this would be to make their education quality higher while shortening the time needed for gaining higher education. The potential MBA students need a reason why they should come to seek degrees at business schools and not elsewhere.

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