2009 will not be remembered as a banner year for M.B.A. programs. Applications from prospective students hit record levels early in the year but then flagged as the months went on. Potential students questioned the likelihood of finding a job after graduation that would pay for the investment, or they struggled to raise the necessary funds as banks stopped lending to all but the most rock-solid prospects.
The key result of all this has been a flight to quality. Students have begun playing it safe by opting for major brand names. In the U.S. that’s been good news for leaders like the Wharton School and Stanford Graduate School of Business, and especially for Harvard Business School and Chicago Booth, both of which recruited their largest classes ever. The same thing has happened internationally. London Business School and INSEAD have both expanded their M.B.A. student bodies, at the latter from 900 to 980. But how are schools outside the global elite coping in the face of this student conservatism?
If there is one thing the less well-known schools where M.B.A. applications are holding up have in common, it is an ability to offer something different. But different can cover a lot of ground. For example at Notre Dame’s Mendoza College of Business, in Indiana, the faculty have created a curriculum that works ethical, social and environmental issues into traditional business courses, and it is proving highly popular with potential students. Of course many schools now play up their ethics-related offerings in hopes of attracting applicants. What sets Mendoza apart, particularly for a school in the U.S., is its unashamed acknowledgment that its approach is based firmly on principles of Catholicism. As one Mendoza professor, Lee Tavis, puts it, “Catholic social thought provides a base of principles to be applied, and the Catholic university environment provides the freedom, for people of any faith, to start shaping a principles-based business career.”
In Europe the Vlerick Leuven Gent Management School has come from seemingly nowhere to leap up in business-school rankings in recent years. Last year it doubled its M.B.A. class size, and applications for the next start date look likely to be up again, according to Peter Rafferty, the school’s international business director. He cites two main reasons for this–loans for students and jobs when they graduate. “As early as 2008 we could see that student funding could become a problem, so we put together a loan scheme that focuses on an individual’s future potential rather than his or her credit history. With so many other sources of finance drying up, it has been a definite draw. Just as important is our record of getting graduates into the workplace. We’ve never been just a conveyor belt into investment banking and consultancy. We’ve always reached out to a much wider constituency of employers across commerce, industry and finance. That has meant that our people have been a lot less affected by the financial crisis, and they’re still finding the jobs they want. And that gives potential students the reassurance they badly need.”
The same two draws–financing and employability–seem to be helping the M.B.A. program grow at another European school, ESMT, in Germany, where the class size increased by 50% this year. That relatively new school was founded in 2002 by 25 of the country’s top companies, including household names such as Deutsche Bank, Lufthansa and Siemens. Those founders, far from being silent partners, have remained highly involved with the school, providing both funding and job opportunities. “These companies act as partners in the M.B.A. program and guarantee high relevance to business practice,” says Zoltán Antal-Mokos, an associate dean. “They actively engage in real-life learning, and they also participate in the recruitment process. About half of our M.B.A. participants choose to join one of ESMT’s founding companies on graduation. Such strong corporate support shows that a business school founded by business is a successful model in management education.”
Melbourne Business School, one of the leading institutions in the Asia-Pacific region, has also seen its latest M.B.A. class grow. Dean Jenny George seems to share Antal-Mokos’ view that the secret may not be location, ranking or history but a unique underlying structural model. “We have the luxury of being what I’d term ‘quasi-independent,'” she says. “We have a strong link to our local university, but at the same time as a corporate body we have free rein to do what we think is best. That means we have the credibility to attract really good faculty but can hire people who don’t always fit the traditional, conventional picture of an academic. And that in turn means we can put together a learning experience that pulls in the very best students.”
Although 2010 is likely to be a better year for business education than its predecessor, it still won’t be easy. The competition among M.B.A. programs for committed, financially independent candidates will intensify, and many more schools will be tempted to look for some elusive way to stand out from the crowd. Jenny George, of Melbourne Business School, warns that that temptation could prove fraught with danger. “You have to be certain that what you have already isn’t doing the job,” she says. “If it is, then don’t innovate just for innovation’s sake. As the old adage goes, if it ain’t broke, don’t fix it.”