Some good news and some bad news for U.S. Business schools



First the good news: The need for management education is unlikely to go away anytime soon.

Next the not-so-good news for U.S.-based business schools – on several fronts.

As mentioned in a previous post, over the past decade the US is losing its dominance in worldwide MBA rankings. There are simply more high-quality programs available outside the US than ever before.

Also, the number of GMAT takers outside the US has surpassed the number of US test takers – and it appears that the number of US test-takers is in decline.


Other data from the Graduate Management Admission Council shows the percentage of GMAT scores sent to the US by citizens of many regions declined sharply between 2007 and 2011. For example, in 2007, 39% of test scores sent from Western European citizens were directed to US schools; in 2011, the number was 28%.

The one-year master’s degree may not be the panacea hoped for, either. According to a recent WSJ article (note, you must be a subscriber to read the full article online), more business schools are adding specialized one-year master’s degrees, “aimed mainly at college graduates with little or no work experience.” And, although enrollments in these programs are increasing, “without prior work experience, many specialized master’s students land positions comparable in salary and job function to those of undergraduates.” As one dean put it, “’The master’s in management students will look to the marketplace a lot like a good undergrad.’”

And there are quite a number of substitutes for an MBA or other management-related degree, as well as potential new competitors.

All of this has prompted some soul-searching from “the industry,” including a recent report from the European Foundation for Management Development (EFMD), titled “The Unfulfilled Promise of Management Education?”.

The EFMD report includes some of the critique of business schools you may have heard in the past, including that business schools “are too market driven,” they’re “guilty of propagating and teaching amoral theories,” that their “emphasis on analytical methodology and science . . . is misplaced,” and that “management research has fallen short of good scientific traditions.”

Also included are the results of interviews asking faculty, students, business, and the media about key stakeholders in management education – who they are and which have the most influence. In terms of key stakeholders, interviewees say it’s the students, followed by business/organizations, then employers. However, in terms of influence in management education, respondents say it’s the faculty, followed by business/organizations, followed by students. Hmmm.

The report concludes with, “. . . some of their [key stakeholders] key criticisms of management education remain, which leads us to ask what lessons have not been learned.”

Taken together, this could be an important juncture for business schools, one not dissimilar from the crossroads higher education more generally is facing.