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Specialty Options Within MBA Programs Are Booming

Specialty Options Within MBA Programs Are Booming

At the University of Minnesota’s Carlson School, many MBA graduates have a goal of starting their own companies.

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.

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“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.

Who enrolls?

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.”

What employers want

Miller suggests that ultimately employers are behind the growing number of master’s-level alternatives to the MBA.

“You can no longer rely on getting a good job just by having a decent GPA at a decent school” as an undergraduate, he says. “A lot of the MS degrees appeal to people who didn’t get an undergraduate business degree. . . . These programs are ways to engage a business or commercial curriculum more explicitly early on and make you more employable.”

All along a spectrum, from the shop floor in manufacturing to HQ offices, employers have voiced concerns in recent years about “skills gaps” in the work force. They want people who have specific knowledge and skill sets and are prepared to do specific jobs.

“I do think that the shift in [schools] developing those kind of specialized programs is in part due to the shift in what organizations are looking for,” says Tiffany Kuehl, president of the Twin Cities Human Resource Association, an affiliate of the global Society for Human Resource Management.

She says companies are saying, “I need someone who’s got an advanced degree. A business degree is great; however, I need them to be a little bit more technical, or I need them to have a little bit more medical acumen and experience.”

In the HR field generally and in her own HR experience as a hiring leader, Kuehl sees employers welcoming a range of graduate-level business credentials.

“What I find is in the requirements for different roles, we aren’t as specific about what type of advanced degree,” she says. Increasingly, diversity in hiring means not just gender or ethnic diversity, but “becoming more and more open to diverse backgrounds and experience.” That includes online universities and other avenues for higher education while accommodating a job and a busy schedule.

The MBA still stands apart, Kuehl adds. “For me, it says that someone is committed to their work and their industry” and to knowing the newest best-practices of their particular function in the company.

The breadth of an MBA program, compared with a more focused degree, can answer corporate recruiters’ needs when what they’re asking for is critical and analytical thinking, Miller says. “Can you actually structure and solve ambiguous problems? Because life doesn’t come with clearly defined problems. You’ve got to figure out what the problem actually is.”

Three Big Changes in Higher Ed

1. Reimbursement For Tuition is Dropping

“Among the biggest changes in the market post 2008 is the continued decline of employer reimbursement for any kind of graduate work, not just MBAs,” says Philip Miller, assistant dean for the MBA program at the University of Minnesota’s Carlson School of Management. Miller says schools are stepping up their career services in programs where students, and no longer their employers, are the primary customer.

Tiffany Kuehl, president of the Twin Cities Human Resource Association, says, “Tuition reimbursement programs are alive and well” but are often tied to the grades a student gets, their level in the company or goals in a performance review. “A lot of what I’ve seen is a tiered approach based on a certain set of criteria.”

2. Move To Maximize Face Time in Class

St. Catherine University looks toward the needs of its students and they want flexibility, says Joann Bangs, dean of the School of Business and Professional Studies. In St. Kate’s new MBA program, and in many other graduate courses, the concept of a “flipped classroom” is at work: Class time is used for the elements of learning where in-person interaction really counts, not just for lectures.

Listening, reading and other activities that can be done independently are done outside the classroom. Bangs says, “It’s about getting the most you can out of the time that you’re meeting face to face, and then being able to supplement that with good online instruction.”

3. More International Students Seek MBAS

The Graduate Management Admission Council, which administers the GMAT, the most widely used admission test for business schools, says the number of students seeking business degrees in countries other than their own nearly doubled over the past decade or so, from 2.1 million students in 2000 to 4.1 million in 2012.