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Saturday, May 28, 2022

Economy Up, MBAs Down

Enrollment in some MBA programs in the greater Valley continues a decline of several years – as often happens when the economy picks up. Why go to school when you can get a job and get paid? Take Woodbury University in Burbank, the smallest of the five programs on the Business Journal’s list of MBA programs ranked by 2014 graduates. Woodbury reported just 48 graduates, while the incoming class fell to just 20 students this year. But there’s more to it than the economy. The school spent the better part of the last decade working to earn accreditation from the Association to Advance Collegiate Schools of Business, which required it to raise its admission standards. “We chose to take the path of quality as opposed to quantity. You can see a steady decline in our numbers, but we expected that,” said Satinder Dhiman, director of the program. Accreditation from the Tampa, Fla. body is the top level a school can attain, awarded to only about 4 percent of schools in the world, and about 30 percent in the United States. The accreditation is available for any school that offers a business degree at any level, not just a master’s. It requires a multi-year process of internal review, evaluation and improvement. And schools must complete a peer-review process every five years to retain the status. For Woodbury, it required a complete overhaul, including changing curriculum and admission standards, such as requiring applicants to take the Graduate Management Admission Test, better known as the GMAT. Dhiman called the accreditation a “game changer” and the single focus of his staff for the seven years the school was seeking it. “My colleagues and I spoke about nothing else. Every day it was all I thought about it,” he said. “This accreditation means a lot.” Woodbury isn’t the only school on the list with AACSB accreditation. Cal State Northridge and Malibu’s Pepperdine University, which has a campus in Encino and is ranked No. 1 with 755 total graduates, both have the accreditation. William Tierney is co-director of the Pullias Center for Higher Education at USC. He said earning AACSB accreditation is important, but that schools shouldn’t think of it as a fix-all. “In terms of marketing, it shows the place is not a fly-by-night institution,” he said, adding that the accreditation is more relevant for lesser-known programs. “It probably matters more for those people who want to get a doctorate. But most of those students don’t. So then it becomes about if it matters to an employer. It’s a plus, but it’s a single, not a home-run.” Educational convenience Tierney said MBA programs have long been counter-cyclical businesses, and recent times have reinforced that. During the recession, numbers were up, as a weak job market forced people back to school. As the economy has recovered, many undergraduates are getting jobs while older workers are remaining in the workforce. But MBA programs also have fundamentally changed. According to the Graduate Management Admission Council in Reston, Va., which owns the GMAT exam, 60 percent of full-time one-year MBA programs reported decreased application volume this year. Meanwhile, 61 percent of full-time two-year programs reported increased applicant volume. The longer programs offer the same material, but the coursework is spread out and allows students to continue working as they pursue a degree. “The name of the game has changed and it’s changing as we speak,” said Dhiman from Woodbury, adding his school is fully geared toward working professionals, with all classes offered in the evening or on weekends. In Thousand Oaks, California Lutheran University takes convenience a step further. The school ranks No. 3 on the list with 386 graduates. The school offers its program entirely online if a student wants to go what way. “It’s all about customization – first with the delivery methods, choosing online or on campus, and also different campuses,” said Vlad Vaiman, interim director of the program, which has satellite campuses in Oxnard, Woodland Hills and Westlake Village. Cal Lutheran is the only local campus that has not seen a decrease in enrollment in recent years. It has grown by 20 students since 2010 to 471 this academic year. But that has been the result of the school’s growth in international students from just 45 in 2005 to 200 this year. By contrast, domestic enrollment declined from 335 in 2010 to 182 this year. “The MBA landscape in the past five years has been experiencing stagnation at best,” Vaiman said. “We attract a lot of international students. We used to target a lot of mainland Chinese, but now a lot more from Europe and other countries.” Cal Lutheran doesn’t have AACSB accreditation, but Vaiman said it’s a “must-have” and that the school is discussing seeking the certification. Competitive market CSUN has been AACSB accredited for five years and is currently undergoing a review to maintain the status. At CSUN, the largest development this year is the naming of its MBA program after a donor who gave $10 million. In March, the school announced it had received the gift from L.A. investor David Nazarian, who graduated from CSUN with a bachelor’s in business administration in 1982. The school is now the David Nazarian College of Business and Economics. The donation is meant to kick off a $25 million fundraising campaign. “With the Nazarian gift and his commitment, it is game changing for the college and the campus,” said Deborah Cours, director of the program. “Things have been soft for a few years, but we think the Nazarian brand will really help us stand out.” The school has seen a sharp enrollment decline, with 193 students in 2012 and 116 this year. The school expects the donation will help boost enrollment by expanding offerings in the coming years, including programs in real estate, wealth management and information systems, though those ideas are still being tossed about. In addition, the funds will help the program offer more international opportunities, such as study-abroad programs and overseas internships. CSUN also has its program geared toward the working adult, offering classes at night. Cours acknowledged that some students may find online education convenient, but she is not in favor of it. “A big thing in MBA programs is feedback and networking. You can really build connections in the classroom that are very hard to replicate online,” she said. There are other challenges in the market, such as internationally known institutions Cornell University and the University of Michigan opening executive MBA programs in the L.A. area geared toward people with significant work experience. Cours said those programs add yet more competition to a very tight market. In response, Cal Lutheran is considering splitting its classes by experience level. Vaiman said MBA students are mainly differentiated by workplace experience. “We found that students with a lot of work experience prefer to be in a classroom with their peers rather than being in a classroom with a 21- or 22-year-old who doesn’t have that experience,” he said. Dhiman from Woodbury isn’t as concerned about competition from elite universities. “Our immediate competition is the Cal State system. Woodbury has a niche with its small and intimate classrooms,” he said. Tierney from the Pullias Center said that programs are trying to stand out any way they can from their peers. While enrollment is down now, master’s programs have a strong future. “Students want to be a step ahead of others and one of the best things they think they can do is get a master’s degree,” he said. “We’ve got people who are coming out with a bachelor’s and realizing that it doesn’t take you as far as other degrees. For some people, the master’s is becoming like the bachelor’s.”

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