Business Schools are Struggling: Will Some Go Broke?

Being a business school used to be a cushy business, but no more:

…applications to BusinessWeek’s Top 30 MBA programs have dropped almost 30% overall since 1998, with some schools seeing declines of 50% or more. And with the job market improving, more prospective applicants may find themselves with opportunities that will, if history is any indicator, pull them away from B-school.
What’s more, to cope with sliding interest, some schools have gone so far as to quietly reduce the number of students they enroll each year…Carnegie Mellon University’s Tepper School of Business has cut its class size from 240 students to a target of 160. Vanderbilt University’s Owen School of Management dropped from 220 to 180 students per class. Other schools have done the same. “We’re seeing more of our peer schools competing with us for the same students,” says James W. Bradford, dean at Vanderbilt. “Schools are setting new expectations based on what the market is.” Even as they’re downsizing their expectations, some schools that were historically highly selective, admitting fewer than 20% to 25% of applicants, gave a thumbs-up to 35% or more applicants for the class entering last fall. Vanderbilt, for one, admitted some 68% of its applicants in 2004 — up 30 points in just four year.

Related posts:

  1. Pfeffer: “The End of Business Schools”
  2. Obstructonist Tactics from Business Schools
  3. The Soft Market for Business Schools
  4. Business School Rankings
  5. Tenure & Parasitism at Harvard Business School

Comments

  1. Murli says:

    Hi Paul,
    Interesting blog.. just came across it today. I wrote about Bweek’s MBA story a couple of days ago. http://www.murli.net/greekcomplexity/2005/04/mba_schools_in_.html
    BTW, I used to work at INSEAD, the int’l business school with campuses in Europe and Asia.
    Cheers,
    Murli

  2. bill says:

    Some B-School $ & recruiting ideas:
    1) Corporate sponsored classrooms.
    2) Lectures ‘Brought to you by…’ plugs with PP slide logo inserts.
    3) Corporate sponsorship students sporting 24/7 forehead branded advertising.
    4) No Lectures Monday.
    5) Paintball Tuesday.
    6) Undergrad hot-body competition Wednesday.
    7) BS Bingo drinking game Thursday.
    8) Hooded associate prof creep-o-week in grad lounge stocks Friday.

  3. Bill, FYI:
    1) Corporate sponsored classrooms
    Already exist.
    2) Lectures ‘Brought to you by…’ plugs with PP slide logo inserts.
    Not quite, but many profs at the better schools have lucrative “research” deals with big companies, and as such tend to feature their sponsors’ logos and content all over the place…
    4) No Lectures Monday.
    Usually it’s Friday, but once you’re in your second year it’s easy enough to get down to a three day class schedule (of course, by then you’re usually spending a lot of time on your field study, outside the classroom). Tu-Th or M-W schedules are common.
    7) BS Bingo drinking game Thursday.
    No lectures on Friday tends to mean that Thursday is drinking night…
    Seriously, the trend has peaked. In the late ’90s having an MBA and at least part of a brain was a guarantee of some incredibly lucrative dotcom or Wall Street job. No more. It’s gone back to the way it was when I went to B-School. It’s a place to learn tools and techniques that may be useful as you advance in your career, or to further a career change, but with no guarantees or immediate payoff.
    This change will have a big impact on second and third tier schools most directly, but will also impact the top schools.
    - BTC, MBA