Three years after graduating from Duke University’s Fuqua School of Business Dana Lee is back for more. The 28-year-old American earned her masters in management (MiM) at Fuqua in 2017. Then, this summer, she enrolled in a new MBA at the business school in Durham, North Carolina.
Launched in 2020, the one-year Accelerated Daytime MBA is exclusively for MiM alumni from Fuqua and elsewhere. They skip the business fundamentals in the school’s two-year Daytime MBA that overlap with the MiM, and tailor the curriculum to their career through electives. Lee, for instance, is taking advanced marketing courses.
Students hoping to switch careers may prefer the two-year MBA for the summer internship, to try out something new. Despite the hefty cost (an estimated total $186,000 for the two degrees), Lee relishes the chance to network with and learn from an MBA cohort that has far more work experience than her MiM class. “I don’t regret any part of this journey that led me to go back for my MBA,” she says.
Fuqua’s course is one of several fresh routes for MiM graduates to enrol on MBAs in the US. Schools see the two degrees as complementary rather than in competition: a 33 per cent rise in applications to Fuqua’s MiM this year on 2019 is explained by the new MBA. Students have to apply to the MBA separately, but a MiM is attractive to admissions committees.
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In New York, Cornell University’s SC Johnson College of Business is offering a new $40,000 incentive to a handful of its MiM students. They are awarded if they enrol in Cornell’s one-year MBA after a few years at work. “We see the MiM as a potential runway to the MBA,” says Mark Nelson, dean. “MiM alumni are extremely attractive as they have proven they can handle the rigours of graduate study.”
Yet currently there are no MiM graduates on the school’s MBA courses, which reflects the degree’s infancy in the US, with limited options for students. These European-born qualifications have struggled to gain a foothold in the American market since emerging about a decade ago.
The source of the problem is awareness, though schools are working hard to convince US business of the value of a little-known qualification. On graduation in 2017, Lee encountered low awareness of the MiM among employers. Once she explained, she was hired by a tech company in New York. Her experience is reflected in a survey by the Graduate Management Admission Council, which found 33 per cent of US companies planned to hire MiM graduates last year, a low proportion relative to Europe and Asia Pacific.
However, the large majority of students from top MiM courses are employed quickly: last year at the University of Michigan Ross School of Business, 93 per cent of the MiM class received a job offer within three months of graduation. The median base salary was $62,000.
Scott DeRue, dean at Michigan, says the diversity of thought MiM alumni bring to organisations can be an asset. Students, drawn from a wide range of mostly liberal arts majors, can harness different perspectives to solve problems and innovate.
In a jobs market battered by coronavirus, a MiM can provide an edge over undergraduates. “A [MiM] is an advantage in a tough economic climate,” says Cornell’s Prof Nelson. “Employers are likely to have fewer opportunities than a year ago. You want every leg-up you can get.”
That explains why it has been a vintage year for MiM courses in the US, with many undergraduates staying in full-time education to shelter from the economic storm (applications to Michigan’s course have risen 19 per cent year on year). Prof DeRue senses an inflection point, with peer schools eyeing his MiM’s success. “A number have reached out to learn from our experience and are exploring the option of adding a MiM degree to their portfolio,” he says.
Several US schools have pulled out of the campus MBA market amid waning demand. Yet Prof DeRue says there will always be a need for these degrees. MBAs serve a different market to MiMs: older high-fliers seeking to move into more senior leadership roles or switch careers. “By these measures, the MBA continues to perform well,” he says.
At Fuqua, dean Bill Boulding thinks MiMs can bolster MBA demand, especially if he can attract alumni in Europe, where the MiM is well established. However, because of travel restrictions and the US immigration crackdown, the first Accelerated Daytime MBA cohort is mostly American.
Other US schools have started admitting undergraduates straight into their MBAs to shore up application numbers, but the trend risks dampening demand for novel MiMs.
An example is the Cox MBA Direct at SMU Cox School of Business in Texas. Created this summer, the three-year course is for recent college graduates, who take classes online alongside full-time work. Shane Goodwin, associate dean of graduate programmes, created the MBA in less than three weeks amid strong student interest to stay in school during the downturn. But he wanted to ensure they had work experience — crucial to maintaining the quality of classroom discussion and for landing senior executive jobs.
Prof Goodwin admits the new MBA “could cannibalise demand” for his MiM, but overall graduate enrolments this year are up nearly 40 per cent on 2019. “Coronavirus has been a rising tide that lifts all boats,” he says. However, he says time will tell whether the US market can continue “growing the whole pie” if the economy strengthens and the opportunity cost of not working jumps. The MiM’s future in America is not yet assured.