MBA applications fall, boom in global economy ahead?

MUMBAI: There is a rather peculiar correlation between the global economy and applications to B-schools. When the economy does well, the applications drop. During a downturn, more students apply for an MBA.

Sixty-seven per cent two-year full-time MBA programmes around the world have seen a drop in applications this year. But during the global economic downturn in 2009, 64% B-schools reported an increase in applications. That management institutions in Asia and the Pacific have seen the largest decline in applicants could well be an indication of a more robust economy.

Explaining the link between the two, V Chandrasekar, professor of entrepreneurship at the Indian School of Business, Hyderabad, says whenever hiring levels in industry are perceived to be good, people would rather opt for a job than study further.

“This is possibly why B-schools in the Asia-Pacific region have seen a decline in applications,” he added, pointing out that an MBA programme is not one that has to be done immediately after graduation and can easily be postponed.

The Applications Trend Survey 2011, released by the Graduate Management Admission Council (GMAC), shows that the two-year MBA isn’t the only programme witnessing a decline in applications. Over half of all full-time MBA programmes (including one-year programmes and the executive MBA) have seen a decline in application volumes.

Some feel that economic instability may have kept candidates from applying to B-schools. “In the beginning of an economic recession, people tend to go back to school to retool and be ready for when the economy turns around. But in this prolonged downturn, people are much more hesitant to leave their jobs and go back to school because they are unsure if they will be able to re-enter the workforce at the right level when they graduate. The improvement on the economic front has been patchy and in the absence of a clear trend towards recovery, candidates are hesitant about the time and cost commitment of a two-year full-time MBA,” said Ashish Bhardwaj, regional director, GMAC South Asia.

Professor Atul Tandon, management consultant and former director of the Mudra Institute of Communications Ahmedabad, feels that a growing number of people are opting for careers such as advertising, design and media that do not need an MBA. In addition, he points to a growth in short-term courses in fields such as public relations and event management.

Paradoxically, while two-year full-time MBA programmes have seen a drop in application volumes in India, the country contributes the most foreign applicants to these programmes in foreign universities; 61% say they have received the maximum number of overseas applications from India. Meanwhile, an increasing number of Chinese applicants are also looking to study abroad.

Though the maximum number of B-school applicants are from Asia and the Pacific, management institutions in this region have seen the greatest decline in application volumes. According to Bhardwaj, this has much to do with the fact that while the growth in the economies in the Asia-Pacific region have resulted in the demand for quality management talent and a growing interest in the MBA programme, the US remains the preferred destination for a management education.

According to the survey, a majority of part-time programmes received either the same or an increased number of applicants as the previous year. One of the institutions surveyed felt that candidates with a good job wanted to keep their jobs and not incur as much debt as they would had they opted for a full-time MBA.

Meanwhile, a greater number of small programmes showed an increase in application volumes when compared with larger ones. This, says Bhardwaj, is because smaller programmes usually attract more local students, and in an uncertain economic environment, it makes sense for candidates to opt for such programmes over larger, national and international ones.

Source : TOI

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