Business education is at a crossroads. In today’s corporate sector, self-made entrepreneurs and tech innovators without college degrees stand shoulder to shoulder with CEOs boasting elite academic credentials and the educational pedigree of traditional business leaders.
In other words, whereas the MBA was once seen as a critical and basic threshold for reaching a position of business leadership, the last several decades have illuminated other pathways to success. And in doing so, the passage of time has also cast into doubt the value of an MBA. While this value was once taken for granted, today the rising price of this most expansive advanced degree butts up against the impression that it might be possible to succeed without making this pricey investment.
Of course, as we explored in our article on the value of a business school education, those who do earn an MBA enjoy considerably higher earning potential than their counterparts with a bachelor’s degree or a master’s degree in a different discipline. In other words, the odds still tilt in favor of those who pursue the MBA.
But, does that mean that today’s business students learn everything they’ll need to succeed in a rapidly changing business world? There is considerable evidence that many business school programs are struggling to keep up with the pace of change and innovation in the real world. As technological advances, global realities, and forces like social justice and climate change impose new realities on businesses, MBA students are entering graduate school with changing expectations from their education.
With that in mind, we’ll examine some of the strategies that business schools are using to prepare students to take on emergent business challenges and ultimately become tomorrow’s business leaders. But first, we’ll take a closer look at some of the factors that are changing the world of business today, and consequently, forcing business schools to rethink their core curriculum.
Why are business schools changing?
In the aftermath of the COVID-19 crisis, the educational sector at large has been forced to reexamine its orientation toward students, learning, and the real world outside of the academy. Some institutions have been forced to ask hard questions about their value proposition to prospective students, and to reconsider longstanding practices and approaches. Business schools have not been spared this internal reflection.
According to an article from the Harvard Business Review, “MBA programs face intense criticism for failing to impart useful skills, failing to prepare leaders, failing to instill norms of ethical behavior—and even failing to lead graduates to good corporate jobs. These criticisms come not just from students, employers, and the media but also from deans of some of America’s most prestigious business schools.”
The primary assertion is that business schools must evolve in their curriculum, their instruction, and the ways that they bridge the gap between business education and real world career opportunities. But, warns the article, many school of business programs have been slow to adapt, especially relative to the speed at which businesses are transforming.
Bloomberg points out that the winds around actual businesses are changing far faster than the winds of business education. This leaves many business school institutions–especially those in the middle and lower tiers–struggling to keep up. Bloomberg notes that “Beyond the challenge posed by the pandemic, schools and MBA programs have grappled with putting forth a persuasive value proposition that solidifies their purpose. A confluence of factors at this moment — climate change, rising inequality, political and economic instability — are raising the stakes for these programs.”
Of course, this value proposition places MBAs–which are notoriously expensive among advanced degrees–under intense scrutiny. More than ever before, applicants have been forced to ask whether or not the education itself will actually deliver a meaningful return on investment.
This, in turn, is forcing business school programs to ask some pretty tough questions about how they do things. In particular, competitive MBA programs are working to demonstrate that their business education offerings are aligned with the expectations of today’s MBA students. And as we’ll examine throughout our discussion, today’s MBA students do look quite a bit different than the aspiring business students of the previous generations.
The Millennial and Generation Z applicants that populate business schools today have lived through a financial crisis, a global pandemic, and a rising tide of concern over racial injustice, socioeconomic inequality, and global climate change. These experiences have had a major impact on the perspective that today’s business school students bring into their advanced education.
For these applicants, issues like corporate governance, ethical leadership, and social responsibility are increasingly taking center stage alongside traditional areas of focus such as organizational leadership, corporate finance, and marketing. But this only scratches the surface when it comes to the changes that are reshaping the MBA landscape. Read on for a closer look at some of the changes that we’re already beginning to see in how MBA programs are delivered, in the content of these programs, and in the skills and knowledge highlighted by these programs.
6 Ways MBA Programs Are Changing Today
Business schools are changing the way they teach, the subjects that drive this education, and the areas that receive the greatest emphasis. Below, we examine some of these changes.
1. Rising Awareness of Social Impact
As noted above, one of the greatest forces for change is the current generation of business students itself. According to Time, changing generational priorities are forcing business schools to adjust their priorities as well. The current crop of MBA candidates comes from a generation which is increasingly vocal about social justice issues. Whereas previous generations of business school students tended to compartmentalize business education and social justice issues in favor of maximum profitability, the current generation views these as inseparable.
Indeed, a growing number of companies have been forced to stake out their own position on issues that, historically, most business leaders wouldn’t have touched with a ten foot pole. As Time notes, “To attract and retain the best and brightest Millennial and Gen Z employees, companies are facing pressure to express their opinions and take action on critical matters, including racial injustice, climate change and income inequality. A majority of college students (68%) say companies should take public stances on social issues. Another 16% said they wouldn’t work for a company that did not, according to a recent Axios/Generation Lab poll.”
MBA programs are taking heed. A growing number of business schools are recognizing the need to provide more comprehensive education around social justice issues in business and to root more traditional discussions in an awareness of these issues. Such issues include business ethics, corporate citizenship, and the social impact of business activities.
For today’s students, these concerns are rising in importance, and converging with growing areas of study like critical race theory, intersectionality, and environmental justice. The result is an expanding area of study around the overlapping space between business principles and social impact issues.
And the business leaders of the immediate future do not view these issues as being on the periphery of good business practice. To the current MBA student, good business practice is inseparable from questions of ethics and corporate social responsibility. We are already witnessing a substantially greater emphasis on these subjects in today’s business education and we can anticipate that this focus will only grow in importance as business schools take steps to evolve around student expectations.
2. Greater Emphasis On Teaching Versus Research
It isn’t just the subject matter that is evolving. The role of the business school professor is actually shifting a bit as well. Some critics of business schoosl argue that a move toward more student-centered education has been a long time coming.
The Harvard Business Review explains that many business schools have struggled to connect with their students because they have placed too great an emphasis on the “scientific approach” to business. This orientation treats advanced business education much as one might treat a chemistry or engineering program. Considerable attention is given to the technical aspects of business education, which places greater pressure on professors to conduct research and publish while also depriving students of insight into some of the softer sciences that are so essential to business leadership.
The Review notes that the institutions which are evolving away from this approach are doing so by placing a greater emphasis on teaching, as opposed to research. The Review notes that “At Harvard Business School, for instance, continued emphasis on case studies makes practitioners an integral part of the educational process. And Harvard helps ensure that its curriculum will keep evolving by making course development a consideration in tenure and promotion decisions.”
It is unsurprising that a topflight school like Harvard is taking steps to shift its approach. But for many business schools both in the elite and middle tiers, this adjustment may come at a far slower pace. This is something that aspiring MBA candidates will likely wish to consider when shopping for programs. There is an argument that for some candidates, a program with a greater emphasis on teaching will offer a more desirable experience as well as one that is more closely aligned with the needs of today’s young and aspiring business professionals.
3. Preparing Students for the Age of Rising Automation
Speaking of today’s young and aspiring business professionals, no generation of business school graduates has ever faced greater professional uncertainty than this one. The nature of work and labor are changing so quickly and so dramatically right now that it’s almost impossible to use recent history as a frame of reference.
The reality is that for many workers, artificial intelligence is a threat to job security. As if to underscore the point that this threat extends well beyond blue collar workers to business leaders, Inc. published a story about a couple of Wharton School students that decided–as an experiment–to answer an exam question using emergent language learning model, ChatGPT. The resulting paper, though demonstrating a somewhat shaky mastery of basic arithmetic, does answer complex questions with clearly stated and analytical responses. The program scored an A+ for its work.
And this points to something that business schools are currently grappling with. Many of the practical skills conventionally taught at business schools will soon be done just as effectively by machines, if that isn’t already the case. As Inc. notes, “ChatGPT demonstrated an aptitude for preparing legal documents, writing code, and completing some functions typical of managers, analysts, and consultants. Repetitive tasks (such as the administrative duties of an entry-level team member) or time-consuming analyses (such as performance appraisals from managers) could be made cheaper and easier with this technology.”
But, says Inc., this doesn’t mean that intelligent business leaders with meaningful human agency will no longer be of value. To the contrary, it is incumbent upon the coming generation to develop business leadership skills that effectively marshal new technology. Automation and machine learning absolutely have the capacity to improve the speed, efficiency and accuracy of human work. But this technology does not effectively replace the depth, intuition, and distinction of human engagement. Those who succeed best will excel at applying this distinct humanity while leveraging emergent technology.
In other words, we aren’t being replaced by this technology. We are being forced to change how we do what we do. How can we use tools like ChatGPT to do our work more efficiently? And what ingenuity can we bring to tools like ChatGPT in order to make them that much more effective and powerful?
These are questions that business schools are working to answer right now and leadership training is transforming around this inquiry. At the root of this endeavor is a key imperative–making automation into a force multiplier while continuing to mold a distinctly human type of business leader and end user.
4. A Focus On Soft Skills
So how are business schools working to prepare future business leaders for the considerable and unprecedented challenges ahead? For one thing, many MBA programs are ratcheting up their focus on the things that make humans…well…human.
The surge in automation, artificial intelligence and machine learning is transforming the nature of work, labor and business as we speak. It is incumbent upon business schools to adapt to this transformation. One way that some of the best business schools are doing so is by placing a greater emphasis on what have historically been called “soft skills” but which today might be more accurately termed 21st Century Workplace Skills.
As companies come increasingly to seek automated solutions for both production and service, businesses will prioritize hiring employees with skills that can’t easily be replaced by machines. The pressure is therefore also growing for business schools to infuse management education with more intensive skill development in areas like leadership, collaboration, communication, creative thinking, decision making, and more.
The Association to Advance Collegiate Schools of Business (AACSB) warns that “According to McKinsey, one-third of jobs globally could be automated by 2030. In this climate, business schools are taking unique approaches to honing students’ soft skills—like communication and emotional intelligence—to help them handle tech disruption and the pace of change.”
Such is to say that we can’t really hope to compete with the machines. We simply need to focus on improving how we do the things that these machines can’t do. Granted, the category of things that machines can’t do is shrinking rapidly, and in startling ways. This only magnifies the challenge to business school programs, which must continue to identify gaps in leadership and labor, and to fill those gaps with dynamic and well-positioned graduates.
5. More Online Learning Than Ever Before
While many of the changes that we’re seeing to business school programs center on the changing demands of the future workplace, this particular change really comes down to convenience and access. Predictably, the last several years have seen massive growth in both the credibility and popularity of online graduate degree programs.
Unpredictably, the mainstream acceptance of online learning was accelerated suddenly and dramatically by a global pandemic. In the wake of the COVID-19 crisis, the imperative for business schools–as with all other schools–to offer remote learning opportunities became immediate and considerable.
Fortunately, adoption had already been relatively high amongst MBA programs. Indeed, online education is actually uniquely popular amongst business graduates. This makes sense, given just how many candidates will pursue this advanced degree while already working in their field. The online MBA offers the benefits of self-pacing, flexibility and accessibility that can make it easier to balance education and work.
This accounts for the rising availability of fully online MBA programs even before the pandemic. According to the AACSB, “Online learning is changing where and when students learn. Between 2011 and 2016, the percentage of AACSB-accredited business schools that offer 100 percent online degree programs rose from 25 percent to 37 percent. Research from the Executive MBA Council shows that 52 percent of EMBAs now include a distance-learning component.”
It is also not lost on today’s business school deans that more and more white collar workers are telecommuting. Again, in the thick of the COVID-19 crisis, millions of workers moved into home offices. Countless employees and employers began to reap the benefits of telecommuting, including reduced office expenses, reduced transportation costs, more flexible working hours, and higher worker morale.
Today, business schools that offer remote learning opportunities are highly conscious of the way the labor landscape has changed. Earning an online MBA is no longer simply a matter of convenience and flexibility. It may also be a great way to prepare for the remote and hybrid working opportunities that have become increasingly commonplace in our labor economy.
6. More Personalized Learning Opportunities
As the market around business schools shifts, MBA programs face growing pressure to recruit from a shrinking pool of prospective students. This means that business schools face greater challenges than ever when it comes to distinguishing their offerings from others. This is especially true among schools that are outside of the Top 50. While elite institutions enjoy the draw of name recognition and global prestige, second- and third-tier institutions have had to adapt their programs to meet customer demand.
And today, that customer demand calls for an experience that is personally tailored and fashioned around highly individualized goals. According to the AACSB, a growing number of programs are building on “custom course mapping services that enable schools to identify areas where their current courses can be elevated with key supplemental certification courses. For example, soft skill accelerators help schools address important skills throughout the current curriculum. Schools also can add courses that include official Continuing Professional Education credits. When students earn these credits, they are able to demonstrate their aptitude and readiness for real-world careers and advancement.”
For many students, the opportunity to essentially build a program that leads to tangible advancement in specific priority areas is tantamount. Look for more business schools to move toward this model of customized learning and individualized certification in order to meet student demand.
Still a Long Way to Go
‘While business schools are working to adapt to the changing business landscape, many critics argue that today’s MBA program is still out of step with the expectations of prospective students and the real-world needs of hiring companies. This isn’t because business school leaders don’t see the need for change. The push and economic imperative certainly do exist.
Still, even with all of these changes afoot, Time points out that the speed of business is always far greater than the speed of education. While businesses actively seek to innovate, business schools often respond to these innovations at a more bureaucratic pace. According to Time, many of the more aggressively evolving MBA programs are doing so out of necessity and survival instinct. For smaller niche programs, evolving could be a matter of life or death.
By contrast, says Time, “Top-ranked business schools with powerful brands don’t seem eager to upend successful programs that are still attracting thousands of applicants willing to spend as much as $200,000 for their degrees and producing highly employable graduates.”
In other words, the most prestigious institutions–those with the power to effect real and comprehensive change–have little motivation to actually do so. As long as this is the case, some of the long-standing conventions of the MBA program will persist. The changes above hardly foretell the extinction of the still valuable MBA.
But we can see in these trends that programs outside of the Top 50 are under pressure to change, and many are responding to that pressure by offering unique and innovative learning and teaching models. It remains to be seen just how pervasive these changes are over the next several decades, but it is entirely possible that some of these smaller programs will actually light the way for change among the elite institutions.
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With all of that said, there’s still plenty of compelling evidence that MBA students will earn more than their peers with undergraduate degrees or master’s degrees in other fields. But what you study and how you parlay this into a career will both be major determinants in whether or not you really get your money’s worth. With this in mind, you may want to jump to our look at some of the highest paying business concentrations that you can take.