Everything revolves around the return on investment. Ultimately, schools either can or cannot keep up with the trends. MBA programs have been evolving continuously for the past many years, but for some reason a specific crowd of applicants no longer sees 2 year MBA programs as viable.
To know more about how MBA programs are at crossroads, you can read this book: Rethinking the MBA
The crowd that is moving away from the MBA programs is aged 21 to 25, has little work experience and big dreams. Granted young professionals and recent graduates may not be thinking about ROI, but they definitely know that competition is fierce when it comes to full time MBA programs and the odds are stacked against them.
I mean how does one compete with VPs of important divisions at Fortune 500 companies with just a college degree? And how does one compete with a Serial Entrepreneur with 8 different successes with just one year of "so so" work experience? Yes, apples are compared to apples, and ultimately Admissions committees do compare Consultants with Consultants, but who do you think wins - the consultant with 5 years of stellar work ex or the young associate consultant who just started out at a small company?
On top of that, being 2 years out of the work force really doesn't sit well with students who already realize how hard it is to pay the bills with a humanities degree.
Luckily, European and Asian schools gave such students a solution to their problems. The Masters in Management program.
Its generally a one year program that really prepares you for the business world. You spend less money, time and effort than you would in a 2 year MBA program and you start working at a respectable annual salary of $90k at a major corporation. Sounds like a lucrative proposition if you ask me.
Plus, you compete with people just like you. The number of applicants is less. And getting financial aid is just as easy, if not more.
Here are the FT rankings for MiM programs for 2015: Link
If you sort the numbers, you realize that ROI is high for all programs. Let us set aside Indian and German programs since the cost of living is relatively low in these countries. To make it fair, we will use salary data from Swiss Business school, University of St. Gallen to calculate ROI:
ROI for USG= 89000/55000 = 1.6 (in the very first year!)
ROI for HBS=120000/200000 = 0.6 (again first year)
Let us also not forget that other than Switzerland most of the other countries on the list have much lower living costs. Many schools charge nominal fees. And almost all of the European schools allow you to work for upto 20 hours per week slashing the costs even more.
If we decided to look at a German school such as WHU Germany the ROI comes out to be ~2.5 and that is just one year.
Now you may say, but wait a minute, maybe students don't get placements. And you would be wrong. Placements are 100% for many schools! While about 20 schools on the list have promising placement stats of 95% or more, most of the schools have figures in the 90-100% range.
Let us also not forget that it takes up to 10 years to pay off a US full time MBA loan. Here are some more though provoking payback figures published on Top MBA: Link
So, if you are young, inexperienced, do not wish to be burdened by heavy loans or simply cannot afford a 2 year MBA, perhaps you should look at MiM programs. Besides, a euro-trip never hurt anyone!
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