Master in Business Administration, its acronym is MBA, is the world’s most popular management degree for undergraduates. But according to the recent survey like the Graduate Management Admission Council (GMAC) survey in 2019, many business schools are shutting their MBA programs and shown an affiliation towards a Master’s degree.

Even the most renowned King’s College in London established its King’s Business School without any MBA programs in 2017. The U.K. University initiated surplus MBA programs without including entrepreneurship, finance, and digital marketing. 

In fact, many other popular business schools, the Wake Forest University School of Business, Arizona State University’s Thunderbird School of Global Management, etc. have closed their MBA programs in the United States. 

So, the main question arises over here is that why some of the business schools across the world are shelving their MBA programs and focusing more on business master’s programs? The following are the critical reasons behind the same-

• Applications

The primary factors determining the passion of a candidate to pursue business education are cost and time. Even the same elements are quoted by the GMAC survey as well. Candidates look for shorter programs having flexibility and quick returns.

Due to this, many business schools reported a massive reduction in the number of MBA applications. In fact, the data from 2017-2018 Business School Questionnaires presented a decline of 60% in MBA applications in U.S. Business schools. Long-term view from 2013–14 to 2017–18 also proved the steady decline in the number of MBA applications.

On the other hand, students have shown interest in shorter and affordable business master’s programs. As a result, business master’s programs boomed with more and more business schools offering these courses.

• Employers

Every year thousands of candidates got placed in big companies through campus placement. Consequently, the employers of these companies have good relations with business schools. So, the employer feedback affected some markets to shelve MBA programs.

In fact, both the incidents first of King’s college focusing on Master’s over MBA programs and the second one of MBA suspension by Henley happened due to employers. The employers wanted to hire young talent having new ideas and are full of energy.

Thus, change in the hiring demand of U.K. employers brought a downfall for MBA programs. According to employers, MBA students lack soft skills and big data analytics, making them unfit for the job. Financial Times Skills Gap Survey presented the same data in 2018.

So, the rise in demand for Master’s in data analytics made the business schools focus on Master’s programs.

• Cost

The cost is not a big concern for the students, but the same factor became very crucial for employers as MBA students are expensive. The employers are forced to pay a high starting salary to MBA students to attract them as they need to pay back their MBA loans or look for a return to their investment.

On the other hand, the employer needs to pay less to Master’s students and thus, showed more interest in early hires from pre-experienced Master’s programs.

• Reputation

A business school can’t be regarded as the same without an MBA program. In fact, shutting the MBA programs can damage the reputation of business schools in the market. And the same happened with Wisconsin School of Business when they closed MBA programs in 2017. The school faced a lot of criticism and backlash that they have to reverse their decision and subsidized the MBA programs with executive education programs.

Therefore, the business schools can rebuild their lost reputation by offering Master’s programs and shifted their focus in this direction.

So, due to the above factors, business schools are shelving their MBA programs and concentrating more on Master’s programs.

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Source: AACSB Edu Blog.