Who Needs a Whole MBA?

A specialized master's degree may better fit the bill

When you consider going back to school to hone your business skills, chances are you're thinking about getting an MBA. But an MBA isn't the only game in graduate business education. With a bit of research, you may find that what you really want may be a specialized master's degree in business.

Specialized master's business programs have been around for decades. But they proliferated in the 1990s, as business schools discovered that a curriculum showcasing their academic specialty allows them to better compete for students. The mainstays of the alternative business programs used to focus on accounting and finance, but now you can pursue a master's degree in international business, health-care administration, marketing, nonprofit management, or human resources. In the late 1990s, the hot new programs were in information technology and e-commerce. At least 60 of 403 B-schools surveyed by BusinessWeek in 2001 offered master's degrees in these new specialties. Even now, schools say, interest in the programs has remained steady.

The master's programs, which range from 10 months to 2 years for full-time students, are best suited to those who already have a business background but want to specialize in a particular field. For instance, students who have an undergrad business degree may see no point in going over similar courses in an MBA program. That was the thinking of Patricia Wycoco, 28, who will graduate in July with a master's in finance from London Business School. Wycoco, who has a bachelor's degree in business economics, was most recently an investment manager for Deutsche Bank in Manila. "I thought that developing a competence in finance was more important than getting a general business education," she says. This summer, Wycoco will join the Manila office of McKinsey's Southeast Asia Practice.

Applications to alternative programs, as with those to MBA programs, have risen in the past 12 months as students seek refuge in academia from the turbulent job market. Often, the specialized programs are slightly less expensive than their MBA counterpart at the same business school. At the University of Minnesota's Carlson School of Management, tuition for out-of-state students in its two-year program in health-care administration is $18,604, vs. $19,199 a year for its two-year MBA program. Most alternative programs are also easier to get into because the applicant pool is smaller. For example, Texas A&M University's Mays College of Business accepted 22% of its full-time MBA applicants in 2001, vs. a 28% acceptance rate at its master's program in management information systems.

A downside is that many of these programs are new, so they don't have a track record with recruiters and employers. "It takes some time for people to figure out what a new degree of this type is all about," says Tridas Mukhopadhyay, director of the three-year-old Master of Science in Electronic Commerce program at Carnegie Mellon's Graduate School of Industrial Administration. And the degrees don't guarantee starting salaries on par with those of MBA grads. A lot depends on the specialty, the student's work experience, and the school's reputation.

Be aware, too, that selection standards vary sharply from one school to the next, particularly when it comes to students' field experience. Enrolling in a program specializing, say, in human resources doesn't ensure that your classmates will all have worked in human resources. The Rotterdam School of Management's Master in HR Leadership program requires applicants to have at least seven years of experience in the field, but students at Ohio State University's Master's in Labor and Human Resources program at Fisher College of Business range from recent college grads to managers with 26 years of experience. It will be up to you to find out the score before applying.

If you find the right program, you'll be able to delve deeper into the specialty than most MBA curriculums do. Students are committed to their chosen fields, so the depth of learning is greater, says Tasha Sims, 25, a second-year student at Ohio State's HR program. Sims, who had worked for three years in benefits and compensation before enrolling in grad school, will join ExxonMobil in August as a recruiting adviser.

Companies are showing signs of appreciating the value of these special degrees. When Peter Stephaich, CEO of Campbell Transportation in Charleroi, Penn., decided to overhaul his company's information system, he commissioned six e-commerce graduate students and two professors from Carnegie Mellon. The team, along with six Campbell executives, will create, among other things, a state-of-the-art tracking system for the company's barges, which ply the Ohio River and its tributaries. The system will use a range of technologies from handheld devices to global positioning systems. "A typical MBA doesn't have the e-commerce skills to build one of these things," says Stephaich, himself a 1989 MBA from New York University.

Ford Motor, meanwhile, currently pays for 19 of its employees to attend Massachusetts Institute of Technology's System Design and Management program, which combines engineering and business courses. The five-year-old program enrolls some 50 students each January, about 80% of whom are company-sponsored. "Because of the complexity of the products being developed these days, there's a real need for people who understand both the technical and the business side of things," says Dennis Mahoney, the director of SDM.

If a specialized business degree might suit you, explore BusinessWeek Online's profiles of B-schools (businessweek.com/bschools). The profiles focus on MBA programs but also list alternative degrees. From there, you can follow links to each school's Web site to determine whether the program offered will help improve your career. Once you select the schools you would like to apply to, you may find that admissions procedures vary slightly from those at MBA programs. For starters, not all programs require the Graduate Management Admissions Test, opting instead for the Graduate Record Examination. For some specialized business courses of study, you'll need a particular undergrad degree such as engineering; for others, you must have company sponsorship.

If it's a toss-up between an MBA and a specialized degree, consider that some B-schools, such as the University of Wisconsin at Madison and Thunderbird, The American Graduate School of International Management, let their master's students switch into an MBA program. So do your homework. With these master's programs, you probably have more options than you think.

By Mica Schneider

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