US business schools reinvent the MBA

Since the master's degree in business administration first appeared decades ago, critics have rapped the MBA as an ivory tower creation with little relevance to real life. Indeed, many MBA graduates barely set foot in a workplace before they land a six-figure salary.

But now, business schools are finding themselves facing an influx of students who have something unique on their résumés: a job.

While the number of applications for openings in traditional, full-time MBA programs in the United States has plateaued, part-time programs are flourishing, and classes for middle managers are booming.

This isn't necessarily good news for family members who may lose their parents and partners to an overwhelming daily grind of full-time work and part-time education. But some longtime observers say the trend will benefit both employers and employees.

When students are fully employed while in an MBA program, their workplaces can act as extensions of the classroom, says Marshall Goldsmith, an executive coach based in Rancho Santa Fe, Calif. "They can follow up on what they've learned and get feedback."

This coincides with changes in the focus of many US business schools, Mr. Goldsmith adds. "There's just starting to be a much bigger push toward training about interpersonal relationships and leadership skills - the people dimension."

Some things haven't changed, of course. MBAs are still designed to train businesspeople to use more than simple intuition. After World War II, "we felt that the field of management was much more of a science. It wasn't just the art of having entrepreneurial blood in your veins," says Al Vicere, professor of strategic leadership at Penn State University.

Over time, top-notch schools gained reputations as they churned out CEOs-to-be and even a future president (George W. Bush, 1975 MBA graduate from Harvard Business School).

The MBA is "very much seen as a degree that, regardless of what your background is, certifies you as somebody who understands running a corporation, running a business, running an organization, and doing it effectively," Mr. Vicere says.

As the economy boomed in the 1990s, MBAs grew, too. From 1996 to 2001, the number of MBA degrees ballooned from 94,000 to 116,000 annually, according to the US Department of Education, while two other kinds of master's degrees - law and medicine - remained steady.

The problem?

"The MBA programs are so standardized and designed for people without experience that they have nothing to do with management," says Henry Mintzberg, professor of management studies at McGill University. "They're about business, but they don't turn anyone into a leader or manager."

Even when some students have worked as managers, no one talks about what they've seen on the job, says Mr. Mintzberg, author of "Managers Not MBAs: A Hard Look at the Soft Practice of Managing and Management Development."

"MBA programs ... don't use the experience of people in the classroom," Mintzberg says. "They teach people marketing, finance, and accounting, and they give them a lot of cases [to analyze]. But they teach management as something removed and distant."

Part-time programs, however, typically attract students who already have jobs. So-called "executive MBA" programs, meanwhile, specifically target people who are already managers.

Overall, applications at MBA schools are fairly flat, according to a 2003-2004 survey of 143 schools by the Graduate Management Admissions Council. Seventy-eight percent of traditional two-year, full-time programs reported declines in applications compared with 2002-2003.

But fewer than half of part-time programs saw their applications go down, and applications went up at more than half of executive MBA programs.

The economy accounts for part of the change because people can't afford to take two years off work for a full-time program, says Toby Gouker, who manages engineering and technical MBA programs at Walden University. But there's another factor, he says: Employees worry about missing out on changes in technology - from cellphones to Blackberries - if they spend all their time in the classroom. [Editor's note: In the original version, Gouker's name was misspelled. Also, the original version incorrectly referred to the school as Walden College.]

"They find that they're behind when they go back into the workplace," Mr. Gouker says.

Also, part-time programs allow students to compare notes on their own experiences back at the workplace. At Valparaiso University's MBA program, 70 percent of students already have work experience, says director Dean Schroeder.

"We merge those students with the handful of students without work experience so they bring different things to the classroom," he says. "In many programs, that would be heresy."

On the other hand, part-time MBA programs are hardly a walk in the park, especially at competitive schools with reputations to uphold. Evening and weekend classes can sap energy and zap leisure time.

"You end up giving up a lot in your personal and social life," says Mary Eckenrod, vice president of worldwide talent management for the computer company Cisco.

"You can't give up at work, and you can't give up at school. You put your other relationships on hold."

So, will traditional, full-time MBAs give way entirely to part-time programs? Umesh Ramakrishnan, vice chairman of the executive recruitment firm Christian & Timbers, doesn't think so.

"There will always be a place for both of them," he says.

"Companies will hire graduates without work experience because they're betting on the future, betting on potential," he says.

But companies also need people who know what they're doing, he says. "When you're looking for the experienced person, you're looking for someone who can come in and have a major impact immediately."

Ultimately, "one [approach] is focused on the future, and the other is focused on the present."