The Rise of the Specialized Business Master’s Degree: What This Means for You

Admissions 101Many business schools around the world are suffering right now – the unprecedented hyper-growth of students obtaining MBA degrees has stalled. What was once the most popular graduate degree in the United States is slipping out of the spotlight, and many schools are doing what they can to try to cover their losses.

In recent years, many business schools have been introducing new specialized master’s degree programs to fill their deficits and cater to an ever-expanding market. While these programs are typically more rigorous than traditional MBA degrees, they also provide a host of benefits.

Times have been tough for many business schools lately. For example, Rochester University’s Simon School of Business recently slashed the cost of their two-year MBA program by 14%. Conversely, over half of the top 25 business schools have added specialized master’s programs within the last three years. This shift toward non-traditional graduate degrees is forecasted to gain even more momentum within the next few years.

Specialized master’s degrees are popping up in a variety of niches: finance, marketing, business analytics, big data, and supply chain management are examples of the most popular subjects of study. Approximately one fifth of business students worldwide will pursue these new types of degrees, according to the Graduate Management Admission Council.

When compared to the traditional MBA, most of these programs appeal to recent undergrads as a way to “jumpstart” their career and stand out from the crowd, especially if they majored in a non-business degree program such as Liberal Arts or Engineering. Specialized master’s degrees typically cost much less than a traditional MBA and only take a year or less to complete. The GMAT or GRE is still required in most of these programs, but many do not require previous significant work experience.

This is an opportunistic path for students faced with circumstances that force them to begin their careers prematurely. Businesses favor those with specialized master’s degrees, as the student will typically be able to begin work quickly and with little training. The door to obtaining a formal MBA later in a student’s career remains open.

Mid-tier universities have suffered the most from the decline of MBA applicants, and have also seen the greatest increase in new master’s degree programs. Unfortunately, some of these programs have been poorly designed due to financial and external pressures. Even though specialized programs cost less than MBAs, they are still a significant investment that require a bit of research beforehand.

The business schools with the most successful specialized master’s degree programs have taken adequate time to prepare and develop their courses before offering them to the public. Look for schools that have demonstrated consideration for the long-term success of their students. Schools that offer career placement will typically be the best ones to choose, as they have formed a plan to ensure that your overall educational goals are met.

While this trend is predicted to continue to grow, specialized master’s degrees are not anticipated to eliminate the need for MBA graduates. As long as business students steer clear of poorly-designed courses, specialized degrees offer many benefits for some.

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Specialized MBA Programs Keep Growing

A recent BusinessWeek article explored the growth of specialized MBA programs, especially at schools outside of the top ten MBA programs. These programs are one way for lesser-known schools to stand out from the pack, but are they always a good choice for business school students?

“Not necessarily,” writes Fancesca Levy for BusinessWeek. “While established programs have placement records on par with those of their general MBAs, many newer programs have not yet established the kind of recruiting relationships that guarantee students high-paying jobs at graduation. And graduates always run the risk of getting hamstrung by their specialties later in their careers, when an industry downturn forces them to look outside their specialties for opportunities.”

While specialized programs are often very valuable, their recent growth reminds us of the wave of e-commerce programs that appeared in business schools eight to ten years ago. Vanderbilt’s Owen Graduate School of Management, for example, made a big push with its e-commerce MBA, only to scale back its offering after the dot-com party was over. (A recent search for “e-commerce” on Owen’s site turns up just one Internet Marketing Strategy class.)

We’re not knocking Vanderbilt or any of these schools for rolling out these programs. The market for management education always changes, and it’s often these smaller schools that create real curriculum innovation. Just be careful that you don’t chase any fads or trends that may not suit your goals five years from now, once the next fad comes along (real estate fit that description a couple of years ago, and “green” MBA programs just might be next).

Also, consider what you really expect to get out of your business school education. For many, an MBA is a chance to learn how to think like a CEO, regardless of the industry or function. Other applicants, meanwhile, enroll in business school to learn specific skills that can help them flourish as soon as they graduate. If you’re in the former camp, you may want to skip these specialized programs in favor of a more general management-focused curriculum. If you’re in the latter camp, however, then a specialized program may be a good fit for you.

For more help in choosing a business school, try the Veritas Prep Business School Selector and take a look at our books on MBA admissions strategy, Your MBA Game Plan.