Over the past 30 years, management education has been one of the fastest growing segments of the higher education market. Although the current economic crisis and ethical lapses of some major business leaders have tarnished the MBA, B-schools have done extraordinarily well in the past few decades, increasing in number, stature and influence within the business community. And, within B-schools, the Executive MBA (EMBA) has been one of the fastest growing and most dynamic programmes.
What is it about the EMBA that has led to its rapid growth around the world and how have these programmes changed over the years? Can that growth continue or will the current worldwide economic crisis dramatically affect their future?
When the University of Chicago began the first EMBA programme back in 1943, the concept was simple - provide focused, rigorous and analytical management training to working managers who had never had any formal business training. Many of these managers had been engineers or other functional specialists and needed additional training in management to lead their companies and make them more effective. In many cases, these managers were selected by their companies and tapped for future positions of leadership within their firms. The EMBA was a means of preparing them for more senior levels of responsibility within the organisation.
However, much has changed since those early days in 1943. More and more of our students are now entrepreneurs or those looking to make a major career shift. They are still looking for a rigorous, general management education, but often their goals are no longer to move ahead within their current company, but to be more effective in running their own businesses or in changing careers altogether. Many of our students now pay for the programme from their own pockets — a far cry from just a few years ago when the majority were sponsored by their firms.
This shift in the needs of the marketplace has also fueled much of the EMBA’s recent growth. Managers (and companies) all around the world are seeking ways to be more effective, to understand their markets better, to lead their organisations. Many of them have never had formal business training and are no longer comfortable managing ‘by the seat of their pants.’ The EMBA is a perfect way for these managers to develop the skills they need, earn a valued credential and build relationships and networks with other business leaders. Furthermore, they can typically do all this without giving up their careers and their incomes. Schools have responded to this demand by creating new programmes in practically every corner of the globe.
What does the future hold for the EMBA?
One major structural change that schools will have to face is how to provide career support for its EMBA students. Since many students now pay for the degree themselves and intend to make a career shift upon graduation, they expect many of the same career services that most schools currently offer only to full-time MBA students. This often poses a difficult dilemma. How do we maintain our relationships with companies that support our programmes while offering our students training, contacts and advice on how to change employers and careers? This is a difficult issue to solve, but one that cannot be ignored. Career options, not just the education, will drive the reputation and demand for programmes in the future.
EMBA programmes must also wrestle with ways to provide exposure to the international business community. As we have clearly seen during the current economic crisis, the economies of the world are linked in ways that we couldn’t have imagined just a few years ago. EMBA graduates need understand how the global economy may affect them and their companies. So, schools must develop ways to provide this exposure in a cost effective, yet productive way.
Perhaps even more critical, however, is what will demand for EMBA programmes look like in the next few years. Overall, I believe that the need for management education will remain high. However, what is not so clear is whether students will be willing to continue to pay the increasing costs of EMBA tuition. Expanded career programming, enhanced student services, and an increased international presence all add to the costs of operating a programme. Attracting top faculty adds to instructional costs; expansion of facilities adds to infrastructure costs. The result, for most schools, has been a nearly continual increase in annual EMBA tuition.
As tuition rises and more companies reduce or eliminate their educational reimbursement programmes, prospective students will focus even more strongly on the return on their investment (ROI). Schools that can’t demonstrate the ultimate benefit of their programme and don’t provide the requisite programme quality, career support and school reputation will no longer be able to attract top students and maintain their tuition revenues.
Success in a new environment
What will be required for EMBA programmes to be successful in this new environment? First of all, B-schools and EMBA programmes must focus on maintaining the quality and integrity of their academic missions. Chasing fads and creating new classes simply to meet the latest newspaper headlines will ultimately backfire and do a disservice to both the school and its students.
Second, some schools will need to employ greater focus. Not every school will be able to attract an international audience and develop a global reputation. Not every school should aspire to. Focussed or niche programmes, whether by region, function or industry can help a school develop influence in a market, allow it to develop a particular expertise and help it maintain quality without burdening it with the expenses of ‘going international.’
Finally, successful schools need to understand the changing nature of their students and the companies they work for. There will be increasing interest in entrepreneurship and alternative careers. More and more of our students will be interested in making major career changes. So, as schools, we need to recognise these shifts and provide the services and support necessary to assist our students and graduates in their career strategies.
It’s only by addressing these needs that EMBA programmes can maintain a reputation for quality, service and support and will be able to demonstrate a solid ROI for their graduates. Those schools that cannot adapt to this changing marketplace may not survive.
William Kooser is Associate Dean, Executive MBA (EMBA) programme, University of Chicago Booth School of Business.
The article was first published in Education Times, India, and is published on MBA Channel with permission of Chicago Booth School of Business, University of Chicago.