Trying to Keep the MBA Relevant

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The golden era for U.S. business schools is over. Gone are the days when a master of business administration degree was essential for a career at Goldman Sachs or McKinsey & Co. Young professionals now balk at the $100,000 price tag and two-year commitment needed for an M.B.A. The rise of Asian business schools poses another challenge. Although applications from the region are still strong at top U.S. schools, many Asian students and successful entrepreneurs have opted to stay closer to home to hone their skills. Business schools have mushroomed in India and China, offering courses and networking opportunities that are more relevant to their home markets. Top U.S. business schools have responded by introducing shorter and more specific business programs, and adding international business cases for study. Indian-born Nitin Nohria, the first Asian dean of Harvard Business School, talked to The Wall Street Journal in Hong Kong about the new environment of business education. Edited excerpts: .... WSJ: What’s your biggest challenge? Mr. Nohria: The biggest challenge is a lot of people are asking the question whether they need to go to business school at all. The golden era of business education ... is 1950 to 2000, where it was almost considered, if you want to accelerate your career, you’d better have an M.B.A. That sense of necessity of an M.B.A. has shifted. Even McKinsey has people from Ph.D.s and other backgrounds, they train them themselves. You go to an investment bank, they will tell people that you can just stay and become a managing director, you don’t have to get an M.B.A. WSJ: Is there pressure to do short courses? Mr. Nohria: The rise of [executive M.B.A.] has been the answer to this pressure, and the rise of one-year M.B.A. programs as supposed to two-year. The U.S. demand for two-year M.B.A.s has declined 20% from year 2000, so that space is shrinking. Demand for specialized master’s program is growing faster than two-year M.B.A.

Trying to Keep the MBA Relevant