Management education has been one of the fastest growing segments in the higher education market over the past 30 years. Although the current economic crisis and ethical lapses of some major business leaders have tarnished the reputation of the MBA degree, B schools have done extraordinary well in the past few decades, increasing in number, stature and influence within the business community. And, within B schools, the Executive MBA (EMBA) has been one of the fastest growing and most dynamic programs. What is it about the EMBA that has led to its rapid growth around the world, and how have these programs changed over the years? Can that growth continue or will the current worldwide economic crisis dramatically affect their future as well?
When the University of Chicago began the first EMBA program back in 1943, the concept was simple provide focused rigorous and analytical management training to working managers, who had never had any formal business training. Many of these managers had been engineers of other functional specialists, and needed additional training in management to lead their companies and make them more effective. In many cases, these managers were selected by their companies and tapped for future positions of leadership within their firms. The EMBA was a means of preparing them for more senior levels of responsibility within the organizations.
However, much has changed since those early days in 1943. An increasing number of students are now entrepreneurs, or are looking to make a major career shift. They are still looking fro a rigorous, general management education, but often, their goals are no longer to move ahead within their current company. Instead, they focus on being more effective in running their own businesses or in changing careers altogether. Many of our students now pay for the program form their own pockets a far cry from just a few years ago, when a majority of students were sponsored by their firms.
This shift in the needs of the marketplace has also fuelled much of the EMBA’s recent growth Managers (and companies) all around the world are seeking ways to be more effective, to understand their markets better, and to lead their organizations. Many of tem have never had formal business training, and are no longer comfortable managing by the seat of their pants. The EMBA is a perfect way for these managers to develop the skills they need, earn a valued credential and build relationships and networks with other business leaders. Furthermore, they can typically do all this without giving up their careers and their incomes. Schools have responded tot his demand by creating new programs in practically every corner of the globe.
One major structural change that schools will have to face is how to provide career support for its EMBA students. Since many students now pay for the degree themselves and intend to make a career shift upon graduation, they expect many of the same career services that most schools currently offer only to full time MBA students. This often poses a difficult dilemma. How do we maintain our relationships with companies that support our programs, while offering our students training, contacts and advice on how to change employers and careers. His is a difficult issue to solve but on that cannot be ignored. Career options not just the education will drive the reputation ad demand for programs in the future.
EMBA programs must also wrestle with ways to provide exposure to the international business community. As we have clearly seen during the current economic crisis, the economies of the world are linked in ways that we couldn’t have imagined just a few years ago. EMBA graduates need to understand how the global economy may affect them and their companies. So, schools must develop ways to provide their exposure in a cost effective, yet productive way.
Perhaps even more critical, is what the demand for EMBA programs will look in the next few years. Overall the need for management education will remain high. However, what is not so clear is whether students will be willing to continue to pay the increasing costs of EMBA tuition. Expanded career programming, enhanced student services and an increased international presence, all add to the costs of operating a program. Attracting top faculty adds to instructional costs, while expansion of facilities adds to infrastructure costs. The result for most schools has been a nearly continual increase in annual; EMBA tuition.
As tuition and more companies reduce or eliminate their educational reimbursement programs, prospective students will focus even more strongly on the return on their investment (ROI) Schools that can’t demonstrated the ultimate benefit of their program and don’t provide the requisite program quality, career support and school reputation will no longer be able to attract top students and maintain their tuition revenue.