How many MBA programs are there in the Twin Cities market?
More per capita than in the much larger Chicago metro, estimates Christopher Puto, dean of the Opus College of Business at the University of St. Thomas—“Give or take, at least 20.”
That’s a lot, but if it seems like there are even more, it’s for good reason. Options in business-related higher education are multiplying quickly.
At least six master of business administration programs are new to the Twin Cities in the past 10 years. What’s harder to count are the other ways schools are layering together new options for business students. There are more specialty concentrations within MBA programs, and more ways these programs are delivered, with variations on flexible scheduling and classroom-online hybridization.
The biggest change in the market, however, is a significant rise in specialty MS programs, says Philip Miller, assistant dean of the MBA program at the University of Minnesota’s Carlson School of Management in Minneapolis. Niche master of science degrees—in finance, information technology (IT) and human resources—fold in elements of an MBA without requiring the same time, cost or broad understanding of business. The Carlson School is starting a new one this year.
“We’re launching an MS in business analytics this summer,” Miller says. Students are enrolling this spring for a 12-month curriculum that starts in June. St. Thomas is also looking at developing a degree of this type, Puto says.
Does the growth in alternative master’s programs mean that the mainline MBA is losing its luster?
“I don’t think that the proliferation of options implies that the MBA is less valuable,” says Tiffany Cork, director of admissions for MBA programs at the University of St. Thomas. “I think part of it is just trying to capture the market,” she says, to “provide a new option for people who maybe aren’t going to go the MBA route.”
Do new MS offerings put schools in the position of cannibalizing their own MBA programs? The Graduate Management Admission Council, which administers the widely used GMAT admission test for business schools, suggests that’s happening. “Diversification of program types has contributed to the dramatic growth in business schools, but it also may have contributed to increased competition between programs,” GMAC says in a 2013 report.
“It’s an open question in the industry,” Miller acknowledges. But his own answer is that the growing menu of business degree programs at schools like his won’t be stealing students from each other.
“People get an MS degree for different reasons than they get an MBA degree, so I don’t think one necessarily means you wouldn’t get the other,” he says. “A lot of programs that I’ve talked to explicitly design their MS program such that you would be admitted into the MBA program at a later date.”
Three MBA Trends
St. Catherine University in St. Paul has the Twin Cities’ newest MBA program and welcomed its first-ever cohort of students in January this year. The 24-month part-time curriculum offers a concentration that’s novel, at least locally, in integrated marketing communications (ICM), along with tracks in management and health care.
“We’ve tried to marry some of the best of what you see in communication strategy with the MBA, but have a really current social flair to it,” says Sara Kerr, an assistant professor and former corporate marketer, who helped develop the ICM concentration.
“There’s a lot of interesting research in business journals being published about how business schools don’t teach social [media],” Kerr explains. “Almost all social classes are taught in the journalism and communication schools . . . yet almost all our graduates and our students in internships are finding that they’re expected to know some degree of social media when they get into a job.”
Carlson’s MBA program is the oldest one locally, dating to the 1920s, but Miller sees something new there among millennial students. More of them are what he calls “off-roaders.” They want an MBA, but not for a traditional career.
“A lot of them want to start their own company, they want to explore social entrepreneurship, they want to look at NGOs [non-governmental organizations] as a career path,” he says. “That’s a different animal for a career center to deal with.”
Providing career services for off-roaders requires “developing more complex and rich networks of alumni and support,” Miller explains. Students need to connect not so much with Fortune 500s or public accounting firms, but with start-up entrepreneurs and nonprofits. “A big part of that search isn’t, ‘Hey, I’m looking for a job,’ it’s, ‘Hey, here are my interests. What advice would you have for me?’ ”
Cork sees some of the same at St. Thomas. “Social entrepreneurship and entrepreneurship in general, those kinds of innovation courses are really popular right now.” Even students who don’t choose it as their degree focus “want to at least have some exposure to that, because they see that within the business community that’s an important growth area.”
Cork adds one more trend: “We’ve seen an increase in the number of [students with] STEM [science, technology, engineering, math] backgrounds coming into the MBA program, and they generally want and need to build some of their softer skills.” Other business students want to develop their soft skills, too—writing, speaking, leading, negotiating—and seek out courses that emphasize those things. Cork says that includes a “great books” course where they discuss how works of literature and philosophy apply to the purpose, dynamics and ethics of business.
What students want from an MBA hasn’t changed in essence, Puto says. They still want to advance their professional status and their careers. “A business education is truly an investment, not an expense, and it should have a long-run return that’s positive.”
That said, enrollment patterns have changed in recent years. The average age of full-time MBA students at St. Thomas is down just slightly from what it was before the recession, from about 27 to 25, Puto says. In the recession, “people might have gotten laid off, and there’s a slight uptick in enrollments in full-time programs when that happens. Now, the length of this recession has depressed that [effect],” he adds. “It just had to get flat.”
An opposite change happened in the St. Thomas part-time MBA program. People who had jobs worried about them and were reluctant to enroll during the recession, Puto says, because “employers might have perceived that they were thinking of leaving.” Now part-time applications and enrollments are trending up. It’s a sign that there’s more confidence in the economy, he says.
Setting aside economic factors, people make degree choices based on where they are in their careers and education. That’s why there’s a place for so many MBA and alternative graduate-level business programs, Miller says.
“For us [at the Carlson School], the full-time, the part-time and the executive [MBA] program are targeted at different competitors, attract a different student base and really don’t have a ton of overlap.”
Carlson’s executive MBA, for example, targets senior executives in the Twin Cities and Chicago markets. “Think director level, entrepreneurs who own their small company, leaders of a functional area at a Fortune 500 company who are looking to become general managers,” he says. They have an average of about 15 years of work experience vs. five in the other programs. By contrast, the full-time MBA program recruits internationally and, historically, more than half the class is not from the Twin Cities or Minnesota. The part-time program, on the other hand, “is a local market, really within 50 miles of the building.”
Every school has a defined market for its various MBA offerings. At Metropolitan State University in Minneapolis, it’s students who want a program that’s flexible time-wise and “manageable” cost-wise, says Anongsri Wengronowitz, director of graduate recruitment and admissions for Metro State’s College of Management. That same territory has also been staked out by for-profit schools including Capella University, which offers seven of the Twin Cities’ 18 MBA programs.
It’s harder to say for sure whom the master’s-level alternative degree programs will end up serving best. Cork and Miller say enrollees are young, with just a year or two of work experience. Cork says schools anticipate they’ll pick up needed skills now and come back again later on. “They’ll do an MS in finance and then maybe five years down the road they’ll realize, ‘I want this broad perspective and I’ll go back and get my MBA.’ ”
Joann Bangs, interim dean of St. Catherine’s School of Business and Professional Studies, sees students’ decision making differently. St. Kate’s new MBA is for students who are “newer in their career path” and need a broad business foundation, she says. The school’s longstanding master of arts in organizational leadership is for students who’ve “spent some time in their career. They’ve risen through the ranks and are finding that they have some gaps in their leadership abilities.”
Ultimately, Bangs believes, there are two distinct populations of students looking for graduate-level business education.
“There’s a core of people who want an MBA because that’s the recognized credential,” she says. “And I think there’s a core of students there who look at it and say, ‘Well, I want some of that, but that’s not really the package I want.’ I think we really do have two different groups of people.”