I realize that the MBA was not alive in Nietzsche’s time, however I am taking a literary leap of faith in connecting the dots of the death of God to the death of the MBA, philosophically speaking. The German existentialist would say that there is no point obtaining an MBA because it is meaningless.
Nihilism is harsh and pessimistic, and certainly not a part of modern-day business, however skepticism is now creeping into academia in the way of the decline of the MBA degree. “The MBA market is in dire straits right now,” concedes Andrew Ainslie, dean of the University of Rochester’s Simon School of Business. “The joke among deans is that ‘flat is the new up.’ If we can just hold our numbers that is an incredible achievement.” His words, not Nietzsche’s.
If you are interested in attending a top-tier business school there has never been a better time. Current graduates are not only receiving multiple job offers, but starting salaries have reached record levels. While there is still demand for the talents of an MBA, the supply of such is dwindling.
For the second consecutive year, even the highest-ranked business schools in the U.S. are beginning to report significant declines in MBA applications and the worse is yet to come, with many MBA programs experiencing double-digit declines. The University of Michigan Ross School of Business experienced the worst drop, an 8.5% decline from 3,485 to 3,188 apps. Harvard fell 4.5%, UC-Berkeley Haas 7.5%, Wharton 6.7%, Stanford 4.6%, and Booth 8.2%.
If you are an undergraduate from one of the top tier or two colleges an MBA is really not necessary. What Wall Street and other financial professionals are looking for is the CFA or Chartered Financial Analyst moniker. With few exceptions, all money managers will hold this certificate. The trade-off with the MBA is huge in both financial terms, and in job opportunities.
If you look at tuition at a top-tier business school, you are looking at spending $250,000 when all is said and done, with the vast majority of that as student debt. Most full-time MBA programs are two years as well. Contrast this with the CFA, which is a self-paced program that has 3 tiers or exams that must be passed to receive the certification. One exam a year is typically taken, thus a CFA can be had in 3 years for about $3,000!
By the way, the exam is extremely difficult, and would best be pursued while you are an undergraduate especially in the finance sector.
Ainslie predicts that 10% to 20% of the top 100 MBA programs in the U.S. will likely close in the next few years, with even greater fallout among second and third-tier schools. Deans attribute the decline to a number of issues. International students, which make up a significant percentage of applicants, have diminished due to the visa threat and the possibility of not being able to stay in the U.S. Cost, as mentioned, is a huge consideration.
The overall economy has a lot to do with the application process as well. When times are good people are less susceptible to changing jobs, however in recessionary times when unemployment rises, an additional degree can open more doors for you. According to Ainslie, “We are seeing the demise of the MBA, but we are still getting a lot of students in different degree programs.”