Does Region Need Full-Time MBA?

January 23, 2006
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With the rise of online, executive and accelerated programs, individuals now have unprecedented access to an MBA education, with virtually no opportunity costs. As such, prestigious, full-time programs are rapidly losing ground, according to observations in The Wall Street Journal Guide to the Top Business Schools 2006.

About 133,000 candidates took the Graduate Management Admission Test in the first eight months of 2005, an increase of 1.7 percent from the same time period the previous year. But when the Graduate Management Admissions Council, the test administrator, surveyed schools about their full-time programs in 2005, it found that only 20 percent reported an increase in applications. A full 72 percent reported a decline.

Meanwhile, only 43 percent of part-time MBA programs reported a decline, while 46 percent reported an increase.

“With the nature of things happening right now, the economic conditions we’re facing in the state, it’s much more problematic to leave the job market for a year or two,” said Peter Raphael, interim dean of graduate studies at Davenport University. “People don’t want to give up their employment because the future is unknown for a lot of folks in a lot of industries.”

In West Michigan, it is quite common, even expected, for an MBA student to be employed while taking classes. In fact, every program in the region is designed that way. Grand Valley State University had but 37 full-time students last year, just 13 percent of its MBA enrollment.

But this could put the region at a disadvantage. Among recruiters, there is still a negative perception of a “night school” graduate. The Wall Street Journal survey found that 34 percent of recruiters believe part-time programs to be much less effective at building skills. There was overwhelming agreement against online programs — 80 percent felt these were less effective and 40 percent rated them as “not at all effective.”

Todd Mairn, West Michigan vice president for Kforce Professional Staffing, knows West Michigan education is at a loss, but isn’t sure if it’s because of the part-time status.

“If you come out of a local school with an MBA, and then expect a higher salary or a better job because you got it, it won’t happen,” he said. “Will you be promoted faster? Probably. Will you go farther long-term? Maybe. But there isn’t a complete return-on-the-money mentality.”

The problem with local schools like Grand Valley or Davenport, Mairn explained, is that nationally, they are “off the charts.” The type of company that is looking for an MBA graduate — generally large companies hiring on growth potential — prefer candidates from marquee schools.

“Don’t get me wrong, the employer will say, ‘Hey, nice notch in your belt, you completed an MBA,’” he said. “But it won’t lend any major weight or consideration.”

In the local labor pool, it can be a distinguishing factor, Mairn believes, when all else is equal. But most local employers place a much higher value on experience. Those hiring on growth potential do appreciate the value of a local education, but will still opt for the candidate from the marquee school.

“Companies like Steelcase and Herman Miller are recruiting out of our local pool, but against someone coming in from a top school, (the locals will) get trumped all day,” Mairn said. “That’s why you go to a big school. The bigger talent pool companies will look for you and hire you just on raw potential. You pay for the springboard.”

John Delaney, associate dean for MBA programs at Michigan State University, partially agrees with Mairn’s assessment.

“If you believe that you may be moving someplace out of the region, where people aren’t familiar with the local school, you should look to the higher-ranked program,” he said. “If you’re not, then the value of the skill set is what’s important.”

Delaney does feel there are differences in quality between full-time and part-time programs. In addition to its top-ranked full-time program, MSU offers a weekend “road warrior” option and an accelerated “executive” program. Last year, 220 of the school’s 424 MBA students were part time.

Delaney contends the education is comparable between the programs, but the end result can be much different. All things considered, the part-time programs are more convenient and less expensive. They do not, however, offer the transformational quality of the full-time education.

“They’re not set up for students to get the detailed knowledge they would need to switch careers,” he said. “Full-time programs give that opportunity.”

Claudia Bajema, director of graduate studies at Grand Valley, believes most students at the school aren’t looking for a “springboard.” The MBA still differentiates employees from colleagues in the workplace, she said, and is a valuable source of personal improvement and job security.

“Getting an MBA is a plus for any student,” Delaney said. “It’s critical today for each of us to upgrade our skill sets.”

Mairn was skeptical, adding, “It’s not like a green light that goes on and then you get promoted. You need to decide if you need an MBA or not. If I did it, it would be just for my own personal growth.”

Either way, for students that do opt for a full-time program, the cost may be much less than expected. Delaney said that across the nation, including the top schools, the drop in full-time attendance has freed up a substantial degree of financial aid.    

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