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Some Business Schools Are Shutting Down Their MBA Programs (forbes.com) 165

Posted by msmash from the how-about-that dept.
The University of Illinois' Gies College of Business has become the latest school to announce that it is getting out of the full-time, on-campus MBA market. From a report: Instead, Gies will focus more aggressively on its online MBA option, the $22,000 iMBA, which has seen big growth since being launched in 2015. Why is Gies giving up on its full-time MBA? For one thing, the school admits it is losing money on the program. While it may surprise many observers given how high tuition rates are for MBA programs, many of these programs are actually loss leaders or "show" programs to get a U.S. News ranking. Secondly, applications to most MBA programs have been declining for years, evidence that there is less interest in the degree.

Just look at the numbers at the University of Illinois' full-time MBA, ranked in the top 50 by U.S. News. Applications to Gies' full-time program fell to 290 this year from 386 in 2016. The school actually enrolled fewer than 50 full-time students in each of the past three years. Even when apps were nearly 100 higher in 2016, Gies was only able to enroll a class of 47 students. There are a surprising number of schools in this same predicament. They have sub-optimally sized programs that cannot support the expenses required to deliver a quality program. And that is why we have seen a number of schools drop out of the full-time MBA market. The list includes the University of Iowa, Wake Forest University, Thunderbird School of Global Management, Virginia Tech, and Simmons College.
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Some Business Schools Are Shutting Down Their MBA Programs More

Some Business Schools Are Shutting Down Their MBA Programs

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  • Online classes are OK... (Score:5, Insightful)

    by b0s0z0ku ( 752509 ) on Monday May 27, 2019 @07:40PM (#58664442)
    OK because of time constraints, yet fucking awful in some other ways -- it's much harder to split up into groups with people whom you like and trust if you've never met them in person, plus slacking and making more work for partners you've never met is much easier psychologically. Plus meeting interesting people (students and professors) in person, working with them, networking, being able to review things in a physical group are part of the advantages of an on-campus program.

  • The last quarter was great, but challenges remain (Score:5, Funny)

    by Waffle Iron ( 339739 ) on Monday May 27, 2019 @07:49PM (#58664474)

    Clearly, these MBA programs need to identify synergies so that they can be more impactful about incentivizing more student stakeholders thereby leveraging scaleout to maximize university revenue.

    • Best response ever! Nice use of Wall Streeter management consultant jargon 101.

    • Re: (Score:2, Funny)

      by Anonymous Coward

      Universities need to be on the critical path to dramatically harmonise client-focused alignments fostering mission-critical frictionless relationships within current bandwidth constraints using Just-in-time methodologies and industry best practice. Bravo.

    • Re:The last quarter was great, but challenges rema (Score:5, Insightful)

      by Aighearach ( 97333 ) on Monday May 27, 2019 @08:08PM (#58664502)

      Clearly, these MBA programs need to identify synergies so that they can be more impactful about incentivizing more student stakeholders thereby leveraging scaleout to maximize university revenue.

      According to the summary, that's exactly what they did, but then it turned out they had a bunch of "rules" and stuff that limited it to qualified stakeholders. And so there was no increase in revenue. But they did increase the identification of synergies; applications increased.

    • Re: (Score:1)

      by Anonymous Coward

      Clearly, these MBA programs need to identify synergies so that they can be more impactful about incentivizing more student stakeholders thereby leveraging scaleout to maximize university revenue.

      What they need is to find efficiencies, and opportunities to achieve economies of scale allowing them to use emergent technologies to simultaneously train vast numbers of like-thinking drones to apply the same systemically flawed theories to business ventures in which none of them has any practical knowledge, and fo

    • Yeah, it seems to me that the problem here is, the MBA programs don't make enough money. They should just get some people involved in the program who know how to put together a business plan and budget things properly.

    • Re: (Score:2)

      by lgw ( 121541 )

      If you haven't seen Weird Al's Mission Statement [youtube.com], it's awesome. Once you watch it, you won't forget again to monetize your assets globally through industry best practice.

  • Could be that people have finally realised that having a "Master of Bugger All" qualification didn't translate into being able to actually do things.
    There's definitely advantage in teaching business to people, but the MBA was so often used by people who didn't have a clue to try and cash in and get a cushy job where they didn't actually need to know things, just dictate.

    • How naieve (Score:1)

      by Anonymous Coward

      Buggering all is, after all, a tried and true survival strategy.

    • I always thought it was odd that people might do a B* in whatever then do an MBA without doing any, you know, actual work in between.

  • Where exactly, does the money go? (Score:5, Interesting)

    by bogaboga ( 793279 ) on Monday May 27, 2019 @08:20PM (#58664532)

    For one thing, the school admits it is losing money on the program. While it may surprise many observers given how high tuition rates are for MBA programs, many of these programs are actually loss leaders or "show" programs to get a U.S. News ranking.

    In my kinda "old timer" experience, delivering an MBA program could be done from professors' heads. No much in supplies was needed. the research done was mostly at students' expense. The industry visits done were kinda subsidized but not that costly I suppose.

    So the question then remains: Where does the money go?

    • Re:Where exactly, does the money go? (Score:5, Informative)

      by 93 Escort Wagon ( 326346 ) on Monday May 27, 2019 @08:32PM (#58664552)

      So the question then remains: Where does the money go?

      Posting anonymously for what will be obvious reasons.

      Money-making Master’s programs (e.g. MBAs for business, PMP for tech) are generally started as a way to bring in additional money for a department or school... and, for a short while, it works well. But, from what I’ve seen personally, faculty gradually figure out ways to siphon more and more of that money towards things which benefit themselves directly rather than the department. Then the department is left worse off than before, since they’re still on the hook for meeting the needs of all those additional students.

      • Re:Where exactly, does the money go? (Score:5, Funny)

        by 93 Escort Wagon ( 326346 ) on Monday May 27, 2019 @08:33PM (#58664554)

        Hahaha well that was a fail.

        • Re: (Score:1)

          by Anonymous Coward

          You're a Nonymous Hero

        • and so the new martyr to the anonymous cause (Score:2, Informative)

          by Anonymous Coward

          was born. Long live the memory of '93 Escort Wagon', his courage and resolve will be remembered for ever. He had the guts to sacrifice everything in the name of spreading the truth.

      • Re: (Score:3)

        by ceoyoyo ( 59147 )

        faculty gradually figure out ways to siphon more and more of that money towards things which benefit themselves directly rather than the department.

        They ARE MBA instructors, after all.

      • Since MBA's are essentially the "Dark Arts Department" where you learn to cheat the tax man and the employee -- it only stands to reason that these tools would be used to siphon off money from the University. "We can't really put our finger on it, but for some reason, the MBA program leaves us with less money than we started with."

        Maybe the frog and the scorpion parable might come into play as well. Overall, MBA's are bad and the people that teach them can't help but seeing how being bad will profit them.

    • Re:Where exactly, does the money go? (Score:5, Interesting)

      by aaarrrgggh ( 9205 ) on Monday May 27, 2019 @09:54PM (#58664746)

      Most schools seem to have enrollments of under $150, and tuition around $1,000 per credit. Adjunct professors seem to usually get at least $65k per 3-credit course, so they need >23 students per class to just break even on salary. Add another 5 students to cover facilities and minimal administration. If you get a “top” industry person, the salary is likely to jump closer to $100-120k, doubling all numbers pretty much everything. (When you get into business law then it is even worse.)

      When you add tenured professors into the mix, the viability gets even worse, and then there are all of the “other” expenses in the mix like recruiting and outreach...

      That said, I have no idea why someone would think an online MBA is worth over $20k! All it gives you is the degree and none of the real connections. The topics they cover are pretty damned basic, so the education value is minimal— it all comes down to the network you build.

      • Add another 5 students to cover facilities and minimal administration.

        The department is not really going to make substantial money until it brings in triple or quadruple the salaries of those involved, given the various administrative, benefits, facilities/space costs.

        A good friend of my SO had her entire small department shut down at a major university, in spite of the fact that salaries of profs and grad students were easily covered by grants they had won, and so whatever teaching should have been "profit". But there was no meaningful profit from the university's POV until

    • Greasing palms [youtube.com], mostly.

  • thank (insert higher power) (Score:3)

    by schklerg ( 1130369 ) on Monday May 27, 2019 @08:25PM (#58664544)
    If there were no more MBA's we'd probably have world peace, no global warming, and advertising would be replaced by memes. I applaud this change.

  • How meta... (Score:5, Insightful)

    by Firedog ( 230345 ) on Monday May 27, 2019 @08:35PM (#58664566)

    So the MBA-types canâ(TM)t figure out how to keep their on-campus MBA program profitable? The irony...

    • Re: (Score:1)

      by Anonymous Coward

      So the MBA-types can't figure out how to keep their on-campus MBA program profitable? The irony...

      Oh, I don't know, someone has a successful outcome and franchises it, the franchisees see dollar signs but are otherwise inept at running actual business due to lack of knowing fuck all about anything ... business collapses, life goes on.

      The death of MBA programs is pretty much the end of the life cycle of MBA programs, really ... any degree people treated as magic, and then handed over their business to cluele

  • Oh hell, just throw unlimited tax dollars at it. That's how we solve problems in the USA.
  • We have too many idiots running around with MBAs as it is. Making more of them won't help us. While a certain politician comes to mind (who does not currently reside at 1600 Pennsylvania), I will instead be non-partisan and point to this character [phdcomics.com]

  • So, they ran out of suckers? (Score:4, Interesting)

    by SEE ( 7681 ) on Monday May 27, 2019 @09:16PM (#58664648) Homepage

    It's long been an open secret that once you get past the schools plausibly able to claim "top ten" status (which about the top 15 programs all did), the ROI on full-time MBA programs starts dropping precipitously.

    By the time you were down to a school that can only call itself "top 50" (like Illinois), you were just throwing money away. It's not like anybody was going through a full-time MBA program for pleasure or cultural enrichment.

    • That's absolutely true of full-time, on-campus programs where you lose out of 2+ years of salary while digging a deep debt hole for yourself. If you are in your early 20s and not earning much off your undergrad, this isn't as much of a problem, but by the time you reach late 20s and definitely into your 30s, you should be earning enough that losing that for 2 years will have significant impact on your lifetime earnings, while taking on $60K+ in debt. The best options are ones that let you go in the evenin
      • The company I used to work for had a lot of people go for their MBA at Harvard, MIT, Stanford, etc.
        Every one I knew of did so at the company's expense,
        with the student receiving full salary while completing their degree.
        In return, they had to agree to work at the company's headquarters
        for a minimum of 5 years after completing their degree.

        In fact, I have never known of any MBA's who paid for it themselves.
  • Perhaps a strong undergraduate business degree along with very strong summer internships would suffice be sufficient to replace an MBA.
  • So business leaders are now going to have online degrees because teaching them properly doesn't make good business sense? Riiiiiight.
  • Hmmm, it looks like MBA programs are getting less and less popular. People start realizing that that MBA actually means nothing in term of professional skills.

  • Over in Europe, they can't build university extensions fast enough for US students.

  • Not much in an MBA program teaches you to think. It just teaches you what other people thought. And those folks were largely incorrect..

  • MBA enrollment generally trends with the unemployment rate. When unemployment is low, MBA enrollments drop. When unemployment is high, a lot of folks register MBA programs.

  • MBA Has Been A 3 Step Process (Score:3)

    by X!0mbarg ( 470366 ) on Tuesday May 28, 2019 @09:19AM (#58666244)

    1. Bleed them of a Humanity
    2. Teach them Accounting
    3. Fill their Vocabulary with Buzz-words

    Evidence of this has been widespread for decades, and shows no signs of stopping.

    Gone are the days of Employee Satisfaction and any real efforts toward employee retention. Christmas bonuses and decent work-to-life ratios are gone, with vacations and decent benefits being nearly unheard of among the rank and file.

    There are to many stories of Good Employers retiring and leaving CPAs in charge only to have the company suffer horribly in the aftermath.

    If anything, the MBA courses need a serious overhaul, with Humanity and employee care being made a substantial part of the equation.

    The "Bottom Line" business model has been killing the economy for too long

  • I'll admit I did not read the article, but I have a few thoughts based on the summary.

    I wonder if there is less demand because the market is flooded with them? As someone else mentioned, it use to be a ticket to print your own paycheck. My guess is that people figured this out and rushed into the programs. The market flooded and drove down demand. When everyone has an MBA, you need something else to set you apart.

    I have known people that have gotten various degrees for the piece of paper. They want the pa

  • For years, people in the legal profession and graduates of law schools who can't use their degrees have been sounding dire warnings about enrolling in law school. There are dozens of blogs dedicated to nothing more than begging students to stop giving law schools money.

    I live near NYC -- NYC, Chicago and LA are pretty much the legal epicenters of the country. There are _plenty_ of people who graduate from a top 14 law school and coast directly into a partner-track job with big law firms in these cities. The

  • Years ago I dated a young MBA , she worked for Microsoft in Belgium then at the Redmond campus.
    She told me that MBA stood for 'Mediocre But Arrogant'.
    I laughed too hard, in her professional opinion.

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