Business Schools

MBA Programs Eye Expansion


With applications increasing, some business schools are planning more seats. Others remain wary

There may be some good news for business-school applicants worried about more competition for slots in MBA programs. With the recession driving more students to business schools, many programs are considering increasing the number of seats in their classes, according to a recent survey conducted by Kaplan Inc. WPO.

Kaplan surveyed 245 B-school admissions officers in August and found that more than half were considering increasing program size, some by up to 25%. The types of schools considering expansion ranged from top tier to less selective programs, according to Jennifer Kedrowski, Kaplan's director of graduate programs.

"We do feel that it is a potential silver lining in terms of the competitive admissions cycle right now," Kedrowski said. The class size survey was conducted after Kaplan found 75% of schools report a more competitive admissions process than three years ago.

"A lot of the top schools are reporting increases in applications," Kedrowski said. "It's a tough environment, but it might be a good time to apply since some schools are considering the strong demand for MBAs and thinking it might be worth increasing class size," she said.

Taking a Cautious Approach

Adding seats in times of high demand (BusinessWeek.com, 8/27/08) and increasing revenues from paying bodies sounds simple, but the decision to grow requires consideration of a range of issues—including diminished school resources due to shrinking endowments, financial aid requirements in a weakened economy, and the effects on program quality.

Which means that some schools that are considering growing are doing it cautiously. For instance, Syracuse University's Whitman School of Management will expand as much as 15% next year, the maximum it can to stay within faculty and building constraints and maintain its quality from past years. The school currently admits 87 students to its full-time MBA program.

"Responding too aggressively might strain the system," said Maurice Harris, the associate dean of graduate programs. "This expanded application pool is occurring at a time when our endowments are weakened since most of our endowment is invested in assets that have lost their value. While we have more prospective students, our ability to provide generous financial aid packages becomes more challenged."

Bringing Talent to Rochester

At the same time, Whitman will focus on expanding its Master of Science program of 27 students more intensely this year by around 30%. In this one-year program, MS students are required to enter with specialized bachelor's degrees in business subjects like finance and accounting and go directly to second year electives with MBA students.

Another program that is growing is the University of Rochester's Simon School of Business, which has been adding seats at a rate of 10% for the last three years. Greg MacDonald, the executive director of admissions and administration said he hopes to cap off the 180-student program at 250 in two years. While Simon's administrators did not anticipate a recession when they wrote their strategic plan in 2005-2006, MacDonald said the weakened economy and uptick in applicants is only helping the school "acquire some really good talent."

On the other side of the equation, Paul Danos, dean of Dartmouth's Tuck School of Business advocates keeping class sizes constant and driving up the quality of the student body in competitive years for admissions. Danos said that many of the top-tier schools will not consider expansion, despite the temptation that increased qualified applicants may bring.

"If you are all of a sudden going to double your size or add students, you're bound to reduce quality," Danos said.

Wait and See at Fordham

Danos also said he thinks programs that expand too much will not be able to sustain their growth. "Eventually if the recession is deep, fewer people will be applying," he said.

And in this landscape, where no one knows exactly how the economy will pan out, some schools are putting their decisions to expand on hold until they can fully assess the number and quality of applicants this year. "Our jobs are not to keep the door closed. If there is an increase in qualified candidates applying, we're going to have to do something, whether that means slightly larger classrooms or trying to arrange for more sessions of a particular class," said Stuart Lipper, the associate dean of academic programs at Fordham University's Graduate School of Business, where there is a wait-and-see attitude towards expansion. "We've been doing this for a long time and often have to react to changes in the marketplace," he said.

Teichman is a reporting intern at BusinessWeek.

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