Application trends : MBA

For business schools with full-time MBA programmes, the global application statistics for 2006 made considerably better reading than the figures for the previous two years. Deans will be hoping the more positive trend continues this year and next.

According to the US-based Graduate Management Admission Council, which collects business school application statistics, 65 per cent of full-time programmes reported that application volume was up last year, compared with just 19 per cent in 2004 and 21 per cent in 2005. In those years, the number of full-time programmes reporting a decline in admissions was 76 and 71 per cent respectively.

“The good news is that the market is very strong, the bloom is back on the MBA rose,” says Dave Wilson, GMAC’s president. There is no single reason for this rebound, and schools point to internal as well as broader, external factors. Dawna Clarke, director of admissions for the Tuck School of Business at Dartmouth College, New Hampshire, says applications have been increasing for the past two years, and cites a variety of factors.

“There is so much positive momentum at Tuck and Dartmouth right now,” says Ms Clarke. “There are new initiatives aimed at attracting a more diverse class, some fantastic results with regard to our rankings across many publications, a physical expansion of Tuck, improved economic conditions, and an uptick in the general MBA industry.”

Demographics are also playing a part. Ms Clarke says census data shows an increase in the world population of 25- to 34-year-olds, and the majority of students seeking an MBA are within that age range. She predicts that the majority of schools will report an increase in applications this year.

Improved economic conditions traditionally lead to more MBA applications, partly because potential employers step up their campus recruiting and offer new MBAs more money. These “output measures” are one of the most important decision factors for potential MBA candidates, says Mr Wilson.

“Think about what the change in the economy means for full-time programmes,” he says. “If more recruiters show up, offer more jobs and more pay, it is equivalent to someone changing the number of pay-outs on a roulette wheel.”

This effect is particularly important for full-time programmes, where candidates are investing much more of their time and money than their counterparts in part-time or executive programmes, and thus need more confidence in the outcomes. The softening of the market in 2004 and 2005 was particularly felt in full-time programmes, says Mr Wilson: “Those were years that followed reports that recruiters were visiting fewer campuses and hiring fewer people.”

In addition, Mr Wilson believes candidates have ignored the academic and media questioning of the validity of traditional two-year programmes, and notes that individual business schools have been “as aggressive as can be” in seeking to maximise application numbers. “More and more young people are finding great value in an MBA and in pursuing one,” he says.

This view gains credence from the fact that the increase in overall applications is not simply the result of hordes of unsuitable or unqualified candidates inflating the numbers. The percentage of full-time programmes reporting that the quality of the applicants in 2006 exceeded that of the previous year was 56 per cent, compared with just 21 per cent for the same question in 2005.

Digging deeper into the council’s statistics reveals a much more internationally-minded approach by applicants. Both US and non-US schools reported sharp increases last year in applications from foreign students. “Prospective MBAs in the past two or three years have been far more receptive to looking beyond their borders when deciding where to study,” says Mr Wilson. “We are seeing a significant shift as the trend towards global education becomes more and more distinct.”

The rise in foreign applicants to full-time MBA programmes at US schools was particularly marked last year, and is described by Mr Wilson as a dramatic turnround from the situation following the September 11 attacks. That led to a sharp fall in foreign applications because of visa difficulties.

This year, for example, the ratio of international students at Tuck has reached 34 per cent, the highest in the school’s history, says Ms Clarke. In the other direction, there has been a significant rise for the first time in the number of Americans applying to schools outside the US, says Mr Wilson – although the overall numbers are still relatively low.

The emergence of a more internationally-minded MBA applicant bodes well for overall applications in the years to come. Demographic factors will help maintain application levels in countries such as the US, Canada and France, where the size of the MBA-targeted population is expected to grow, says the council. It suggests, too, that countries with declining populations for the targeted age group, such as the UK, can maintain increasing applications and enrolment by expanding their foreign applications.

This can bring real benefits to a school, so long as it does not put all of its eggs in one or two baskets. Judge Business School at Cambridge University experienced a 21 per cent increase in applications last year, and has seen a particularly strong rise in applications from India, says Simon Learmount, director of MBA admissions. “Many of these applications are extremely good, so the temptation to admit a large proportion of Indian students is strong,” says Prof Learmount. “However our aim is to provide a truly international experience for all our MBA students – having 25-50 per cent coming from just one or two countries would compromise the international nature of our programme.

“So, rather than limit the proportion of Indian candidates being admitted to the programme, we have worked hard to complement this ‘unsolicited’ increase by spending additional marketing resource in other countries.”

Another positive demographic factor is the broadening range of applicants, suggesting the MBA is becoming attractive beyond its traditional market – those looking to lift their earning power to stratospheric levels on Wall Street, in the City of London or elsewhere in the private sector.

“Over the last 10 years we have seen a shift in the profile of MBA students – it used to be almost primarily for those in business. Now it is increasingly perceived as a general management degree,” says Chris Jeffery, director of the executive MBA programme at Cass Business School in London. “This shift means we are seeing increasing numbers of students from non-traditional backgrounds entering our programmes.”

In particular, he says, Cass is seeing greater numbers of students join the school from government and the health service, where employers want their senior talent to compete with their private sector counterparts on all fronts.


Meanwhile, the strength of the global economy will have a big influence on the sustainability of the recent rebound in MBA applications. The latest monthly registration figures for the council’s Graduate Management Admission Test (GMAT), used by 1,700 business schools worldwide in the admission process, suggest the trend is continuing. Worldwide registrations were 241,662 in December last year, up from 238,706 a year earlier and 227,490 in December 2004.

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